1 00:00:00,840 --> 00:00:04,000 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 2 00:00:04,040 --> 00:00:05,240 Speaker 1: my co host Matt Miller. 3 00:00:05,640 --> 00:00:09,640 Speaker 2: Every business day we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:13,600 Speaker 2: and Bloomberg experts, along with essential market moven news. 5 00:00:14,160 --> 00:00:17,279 Speaker 1: Find the Bloomberg Markets podcast called Apple Podcasts or wherever 6 00:00:17,360 --> 00:00:20,520 Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast. 7 00:00:21,560 --> 00:00:24,759 Speaker 3: Now, let's turn to one of the other large stories 8 00:00:24,800 --> 00:00:29,120 Speaker 3: today at Bloomberg Exclusive that China planning to broaden a 9 00:00:29,240 --> 00:00:33,159 Speaker 3: ban on the use of iPhones and sensitive departments to 10 00:00:33,280 --> 00:00:38,680 Speaker 3: government backed agencies and state companies in China. Anurag Runna 11 00:00:38,920 --> 00:00:42,519 Speaker 3: is our senior tech analyst with Bloomberg Intelligence and he 12 00:00:42,800 --> 00:00:47,600 Speaker 3: joins us by zoom Now. Anurrag, it sounds like this 13 00:00:47,840 --> 00:00:55,040 Speaker 3: latest story is essentially expanding the scope of these restrictions. 14 00:00:54,280 --> 00:00:55,240 Speaker 4: They were already banned. 15 00:00:55,800 --> 00:00:57,960 Speaker 3: Well, they weren't banned, it sounds like, But it sounds 16 00:00:58,000 --> 00:01:00,520 Speaker 3: like for some reason, the markets believe that at the 17 00:01:00,560 --> 00:01:02,760 Speaker 3: scope is much broader than it was yesterday at the 18 00:01:02,760 --> 00:01:05,839 Speaker 3: Wall Street Journal report coming out that you know, people 19 00:01:05,880 --> 00:01:08,319 Speaker 3: were not being asked not to bring their iPhones in. 20 00:01:08,760 --> 00:01:09,000 Speaker 4: Is that? 21 00:01:09,160 --> 00:01:09,880 Speaker 3: Is that right here? 22 00:01:10,440 --> 00:01:11,399 Speaker 5: So I'll tell you. 23 00:01:11,440 --> 00:01:14,280 Speaker 6: I talked to the analysts in Asia and they basically said, listen, 24 00:01:14,280 --> 00:01:16,440 Speaker 6: if you are a Chinese government official, you were not 25 00:01:17,040 --> 00:01:19,360 Speaker 6: you were it was basically bad manners for you to 26 00:01:19,440 --> 00:01:21,560 Speaker 6: even show your iPhone in the office, So you have 27 00:01:21,880 --> 00:01:24,399 Speaker 6: I mean, this is just a This was not to 28 00:01:24,440 --> 00:01:27,319 Speaker 6: be used at work at all and under any circumstances. 29 00:01:27,560 --> 00:01:30,039 Speaker 6: So this is just an extension of that. But to 30 00:01:30,080 --> 00:01:33,520 Speaker 6: be very frank I mean this, you know, financially, I 31 00:01:33,520 --> 00:01:37,280 Speaker 6: would say, people government official not buying the iPhone is 32 00:01:37,280 --> 00:01:40,119 Speaker 6: not going to be material for Apple. But the question 33 00:01:40,200 --> 00:01:42,520 Speaker 6: really is not so much about that. The question is 34 00:01:42,520 --> 00:01:46,279 Speaker 6: is the close relationship that China has had with Apple 35 00:01:46,400 --> 00:01:48,720 Speaker 6: or the Apple has had with China, are we seeing 36 00:01:48,760 --> 00:01:50,600 Speaker 6: some kind of indent in that. I think that is 37 00:01:50,640 --> 00:01:53,800 Speaker 6: the biggest question here, because as everybody knows, Apple is 38 00:01:53,960 --> 00:01:57,480 Speaker 6: very dependent on China for all its parts, all the assembly, 39 00:01:58,560 --> 00:02:00,840 Speaker 6: and frankly, you know you were to look at all 40 00:02:00,840 --> 00:02:03,960 Speaker 6: the US companies, Apple's done so much better than anybody 41 00:02:04,040 --> 00:02:08,600 Speaker 6: else since even the tartafar begins, Apple was basically insulated 42 00:02:08,639 --> 00:02:09,160 Speaker 6: from all of that. 43 00:02:10,800 --> 00:02:13,600 Speaker 3: Well, and Apple shares I guess, reacting here down three 44 00:02:13,639 --> 00:02:15,600 Speaker 3: point seven percent. But I mean, do we have any 45 00:02:15,600 --> 00:02:20,320 Speaker 3: indication that this would spread not just to the I 46 00:02:20,320 --> 00:02:25,000 Speaker 3: guess twenty percent of sales roughly that China that Apple 47 00:02:25,040 --> 00:02:29,720 Speaker 3: does in China, but also to the manufacturing end or 48 00:02:29,800 --> 00:02:31,720 Speaker 3: is that just kind of the market's thinking ahead. 49 00:02:32,600 --> 00:02:34,920 Speaker 6: Yeah, I mean that's really what the big you know, 50 00:02:35,000 --> 00:02:37,560 Speaker 6: the danger here is you know them nobody, you know, 51 00:02:37,960 --> 00:02:40,200 Speaker 6: few government officials not buying the iPhone is not going 52 00:02:40,240 --> 00:02:42,919 Speaker 6: to move the needle at all for Apple. But the 53 00:02:43,000 --> 00:02:45,600 Speaker 6: question really is, you know, are they going to try 54 00:02:45,639 --> 00:02:48,400 Speaker 6: to restrict other things We're going to have, you know, tariffs, 55 00:02:48,480 --> 00:02:51,120 Speaker 6: it's all those things that are coming into play. But 56 00:02:51,840 --> 00:02:53,520 Speaker 6: you know, we'll find out, I would say, in the 57 00:02:53,520 --> 00:02:55,720 Speaker 6: next six to twelve months, if there is any change 58 00:02:55,720 --> 00:02:59,840 Speaker 6: in relationship. Apple's done a phenomenal job of its relationship, 59 00:02:59,840 --> 00:03:03,640 Speaker 6: but China. It employs millions of people in China, not 60 00:03:03,800 --> 00:03:09,040 Speaker 6: directly through their factories, and you know it, as you said, 61 00:03:09,080 --> 00:03:12,840 Speaker 6: it's nineteen percent of Apple's revenue. So it is very 62 00:03:12,400 --> 00:03:15,680 Speaker 6: overly dependent on China for a lot of things. So 63 00:03:16,120 --> 00:03:18,280 Speaker 6: you know, I'm sure they are hoping that none of 64 00:03:18,320 --> 00:03:22,959 Speaker 6: that changes. Because of recent events between the US and China. 65 00:03:23,040 --> 00:03:26,400 Speaker 2: Apple shares not doing poorly they're up thirty five thirty 66 00:03:26,440 --> 00:03:29,520 Speaker 2: six percent year to date, but they have dipped below 67 00:03:29,520 --> 00:03:31,360 Speaker 2: their one hundred day moving average right now trading at 68 00:03:31,360 --> 00:03:32,680 Speaker 2: one hundred and seventy six dollars. 69 00:03:32,720 --> 00:03:36,320 Speaker 4: Even what do you think about about the stock on rag. 70 00:03:37,200 --> 00:03:38,920 Speaker 6: See when you look at it. I think a lot 71 00:03:39,000 --> 00:03:42,200 Speaker 6: will depend on this overhang now, because next week we're 72 00:03:42,200 --> 00:03:44,960 Speaker 6: going to see the new iPhone coming out, the iPhone fifteen. 73 00:03:45,960 --> 00:03:48,040 Speaker 6: You know, we think it's going to do well. But 74 00:03:48,200 --> 00:03:51,559 Speaker 6: at the same time, now we have another unnecessary cloud 75 00:03:51,280 --> 00:03:53,880 Speaker 6: on top of this stock, so we have to figure 76 00:03:53,880 --> 00:03:57,000 Speaker 6: out what this really means. I do not know whether 77 00:03:57,400 --> 00:03:59,600 Speaker 6: when Apple announces the iPhone of if they're going to 78 00:03:59,680 --> 00:04:03,480 Speaker 6: make any comment on any of these news breaks, because 79 00:04:03,720 --> 00:04:07,240 Speaker 6: I think as long as this overhang is there, you know, 80 00:04:07,280 --> 00:04:09,760 Speaker 6: Apple will have a hard time in the near future. 81 00:04:10,280 --> 00:04:14,440 Speaker 3: How has Apple typically interacted with the Chinese government. 82 00:04:14,680 --> 00:04:16,840 Speaker 6: It's been amazing. I mean, they have done so much 83 00:04:16,839 --> 00:04:20,280 Speaker 6: better than any other company in the Western world. They 84 00:04:20,279 --> 00:04:22,440 Speaker 6: were not affected by any of the bands. They are 85 00:04:22,600 --> 00:04:25,400 Speaker 6: very you know, widely welcome there. In fact, you know, 86 00:04:25,440 --> 00:04:27,880 Speaker 6: one of the things we saw last year there was 87 00:04:27,920 --> 00:04:30,560 Speaker 6: some issue with the with the production of the Pro 88 00:04:30,680 --> 00:04:34,560 Speaker 6: model because of COVID nineteen restrictions in China, and that 89 00:04:34,680 --> 00:04:37,799 Speaker 6: led to some you know, shortfall of shipments. But frankly, 90 00:04:38,920 --> 00:04:40,720 Speaker 6: right about a month month and a half after that, 91 00:04:41,120 --> 00:04:43,720 Speaker 6: China changed their COVID policies. Now I'm not saying they 92 00:04:43,720 --> 00:04:46,400 Speaker 6: did it because of Apple, but they have been very 93 00:04:46,440 --> 00:04:48,800 Speaker 6: friendly to Apple, and Apple's been very nice to them. 94 00:04:48,960 --> 00:04:51,480 Speaker 4: What's the biggest opportunity for Apple? Is it India? 95 00:04:52,800 --> 00:04:55,560 Speaker 6: It is China. Actually, from a mathematical point of view, 96 00:04:55,920 --> 00:04:58,479 Speaker 6: India is going to be very long term because you know, 97 00:04:58,560 --> 00:05:03,040 Speaker 6: the gdpeople are capital for India is only twenty five 98 00:05:03,080 --> 00:05:05,559 Speaker 6: hundred dollars, while in China it's about close to thirteen 99 00:05:05,600 --> 00:05:06,760 Speaker 6: thousand dollars. 100 00:05:07,200 --> 00:05:09,360 Speaker 3: Just quickly here an rag because we only have about 101 00:05:09,360 --> 00:05:12,960 Speaker 3: a minute left. What should we expect next week from 102 00:05:13,200 --> 00:05:16,320 Speaker 3: the announcement of these new products? Is there anything that 103 00:05:16,320 --> 00:05:17,560 Speaker 3: could really be a game changer? 104 00:05:18,760 --> 00:05:21,400 Speaker 6: I think the question really is the highest end model 105 00:05:21,440 --> 00:05:25,320 Speaker 6: that they have, it's the iPhone Promax model. I'm looking for. 106 00:05:25,400 --> 00:05:27,039 Speaker 6: The biggest thing we are looking for is, you know, 107 00:05:27,080 --> 00:05:29,560 Speaker 6: what's the price of that product? Because that price has 108 00:05:29,600 --> 00:05:32,000 Speaker 6: remained constant for the last three years. If there is 109 00:05:32,120 --> 00:05:34,679 Speaker 6: any changes to that price, I mean that really does 110 00:05:35,040 --> 00:05:37,760 Speaker 6: wonders to the iPhone sales for the next twelve months, 111 00:05:38,000 --> 00:05:41,440 Speaker 6: because that model itself is supposed to have a very 112 00:05:41,520 --> 00:05:44,400 Speaker 6: high end camera, much better than anything Apple's done in 113 00:05:44,440 --> 00:05:44,880 Speaker 6: the past. 114 00:05:45,120 --> 00:05:47,920 Speaker 4: Simone's an Android user. No, I'm sorry to say. 115 00:05:48,040 --> 00:05:50,800 Speaker 3: I'm an iPhone user in part because of the because 116 00:05:50,800 --> 00:05:53,080 Speaker 3: of the camera well, and also because I moved abroad 117 00:05:53,080 --> 00:05:54,640 Speaker 3: and had to get an iPhone. I can't remember the 118 00:05:54,680 --> 00:05:55,920 Speaker 3: actually irational, but. 119 00:05:56,400 --> 00:05:59,720 Speaker 2: Android users, I feel like they spoil a fun for 120 00:05:59,880 --> 00:06:00,520 Speaker 2: just family. 121 00:06:00,640 --> 00:06:03,160 Speaker 3: John Tucker group chats who is an andreid. 122 00:06:03,240 --> 00:06:05,480 Speaker 4: He has a green bubble. John Tucker has a green bubble. 123 00:06:06,600 --> 00:06:08,719 Speaker 7: I thought, you know that that sounded like an insult, 124 00:06:08,720 --> 00:06:11,279 Speaker 7: but then Matt went on to explain, you know, mister 125 00:06:11,400 --> 00:06:12,559 Speaker 7: Spock would have anything. 126 00:06:12,600 --> 00:06:14,400 Speaker 4: I think mister Spock would be and Andrew, which. 127 00:06:14,200 --> 00:06:15,640 Speaker 8: I take as an attack on my ears. 128 00:06:16,040 --> 00:06:19,279 Speaker 2: No, it's because you're a very technical, technically savvy man. 129 00:06:19,360 --> 00:06:21,840 Speaker 4: All right, Honor Agrana, thanks very much for joining us. 130 00:06:23,120 --> 00:06:26,520 Speaker 9: You're listening to the Team Ken's Are Live program Bloomberg 131 00:06:26,560 --> 00:06:29,920 Speaker 9: Markets weekdays at ten am Eastern on Bloomberg dot com, 132 00:06:30,040 --> 00:06:33,160 Speaker 9: the iHeartRadio app and the Bloomberg Business app, or listen 133 00:06:33,240 --> 00:06:35,360 Speaker 9: on demand wherever you get your podcasts. 134 00:06:37,640 --> 00:06:40,840 Speaker 2: Let's get over to our legal reporter Ava Benny Morrison 135 00:06:40,920 --> 00:06:43,800 Speaker 2: right now, she's at courthouse here in New York talk 136 00:06:43,880 --> 00:06:49,240 Speaker 2: about breaking news on the FTX case. We have seen 137 00:06:49,440 --> 00:06:54,720 Speaker 2: across the Bloomberg terminal that Ryan Salome, formerly of. 138 00:06:54,839 --> 00:06:56,919 Speaker 3: FTX, he's planning to play guilty. 139 00:06:56,960 --> 00:07:01,200 Speaker 2: It sounds like exactly he was as an executive along 140 00:07:01,600 --> 00:07:04,200 Speaker 2: with SBF with Sam Bankman freed, and it looks like 141 00:07:04,200 --> 00:07:07,400 Speaker 2: he's going to plead guildy criminal charges over the collapse 142 00:07:07,440 --> 00:07:10,679 Speaker 2: of that cryptocurrency exchange EVA. 143 00:07:10,720 --> 00:07:11,240 Speaker 4: What do we know? 144 00:07:12,560 --> 00:07:16,360 Speaker 10: We know that Ryan Salame has been in negotiations with 145 00:07:16,840 --> 00:07:21,160 Speaker 10: prosecutors for a while. Now today he is going to 146 00:07:21,400 --> 00:07:25,880 Speaker 10: front the federal courthouse in downtown Manhattan and enter ala 147 00:07:25,960 --> 00:07:29,880 Speaker 10: of guilty to criminal charges. We don't know yet what 148 00:07:30,080 --> 00:07:33,160 Speaker 10: exactly what those charges are or whether that means he 149 00:07:33,280 --> 00:07:37,000 Speaker 10: will also be a cooperating witness and agree to testify 150 00:07:37,080 --> 00:07:38,600 Speaker 10: against Bankman freed or not. 151 00:07:39,520 --> 00:07:43,480 Speaker 3: Yeah, what does this mean for the potential cases against 152 00:07:43,520 --> 00:07:46,920 Speaker 3: some of the other players in this You know Bankman Freed, 153 00:07:47,040 --> 00:07:50,360 Speaker 3: some of his other former colleagues, Gary Wayang Caro, Allison, 154 00:07:50,800 --> 00:07:55,520 Speaker 3: Shad Singh, you know, what do we understand and what 155 00:07:55,560 --> 00:07:58,680 Speaker 3: does your reporting suggest about his willingness to cooperate with 156 00:07:58,880 --> 00:07:59,880 Speaker 3: prosecutors there? 157 00:08:01,040 --> 00:08:04,800 Speaker 10: Well, from our reporting and talking to different sources, the 158 00:08:04,840 --> 00:08:09,160 Speaker 10: sense we've got is Ryan has been digging his heels 159 00:08:09,160 --> 00:08:13,520 Speaker 10: in about corporating with the prosecutors, So we understand that 160 00:08:14,080 --> 00:08:16,560 Speaker 10: this will more than likely be a plea deal. He 161 00:08:16,600 --> 00:08:20,000 Speaker 10: will agree to plead guilty to certain charges, but he 162 00:08:20,240 --> 00:08:24,160 Speaker 10: doesn't want to testify against Sam bakman Fred and prosecutors 163 00:08:24,160 --> 00:08:28,320 Speaker 10: actually may suggested that in a court filing a few 164 00:08:28,400 --> 00:08:31,240 Speaker 10: weeks ago, saying that Ryan Salomey had said he would 165 00:08:33,080 --> 00:08:37,120 Speaker 10: take the fifth if he was called to testify. Worth 166 00:08:37,120 --> 00:08:41,200 Speaker 10: noting here that prosecutors already have three former executives from 167 00:08:41,360 --> 00:08:45,400 Speaker 10: FTX and alome To Research, Caroline Nelson, Gary Wang, and 168 00:08:45,480 --> 00:08:49,480 Speaker 10: Nashad Singh, who have pleaded guilty to their conduct as 169 00:08:49,520 --> 00:08:52,080 Speaker 10: well and have agreed to cooperate with prosecutors. 170 00:08:52,600 --> 00:08:54,280 Speaker 4: What do we know about how much money these guys 171 00:08:54,360 --> 00:08:57,400 Speaker 4: have or gals? 172 00:08:57,440 --> 00:09:00,360 Speaker 2: In terms of Carolyn Ellison, you know, I think it's 173 00:09:00,400 --> 00:09:04,280 Speaker 2: interesting that they're able to mount these legal defenses and 174 00:09:04,280 --> 00:09:09,040 Speaker 2: they're not using state appointed lawyers, So do they have 175 00:09:09,280 --> 00:09:11,199 Speaker 2: still a ton of cash stashed away. 176 00:09:12,320 --> 00:09:16,920 Speaker 10: That's a really good question. We know that some of 177 00:09:16,960 --> 00:09:20,679 Speaker 10: these executives received huge loans from Alamina Research. We're talking 178 00:09:20,720 --> 00:09:24,079 Speaker 10: tens of millions of dollars here, But some of the 179 00:09:24,400 --> 00:09:27,760 Speaker 10: executives like Nishead Singh, who have previously played guilty, have 180 00:09:27,880 --> 00:09:31,720 Speaker 10: also agreed to forfeit some of their assets, including property. 181 00:09:32,559 --> 00:09:35,240 Speaker 10: So it's unclear, but it's a really good question. They're 182 00:09:35,240 --> 00:09:39,200 Speaker 10: not using public defenders, they're using private attorneys, so it'd 183 00:09:39,200 --> 00:09:41,640 Speaker 10: be interesting to see just how much money they still 184 00:09:41,679 --> 00:09:45,240 Speaker 10: have and whether that could potentially be called back by 185 00:09:45,400 --> 00:09:47,680 Speaker 10: the FTX, bankruptcy estate. 186 00:09:49,080 --> 00:09:49,360 Speaker 6: AVA. 187 00:09:49,480 --> 00:09:51,880 Speaker 3: Really interesting stuff. Thank you for saying across this. This 188 00:09:51,920 --> 00:09:54,680 Speaker 3: is Eva Benny Morrison. She's our legal reporter for Bloomberg 189 00:09:54,720 --> 00:09:56,960 Speaker 3: News at the Courthouse in Manhattan. 190 00:09:57,360 --> 00:10:00,480 Speaker 9: You're listening to the teeth catch our line program Bloomberg 191 00:10:00,559 --> 00:10:04,120 Speaker 9: Markets weekdays at ten am Eastern on Bloomberg Radio, the 192 00:10:04,200 --> 00:10:07,400 Speaker 9: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 193 00:10:07,440 --> 00:10:10,280 Speaker 9: You can also listen live on Amazon Alexa from our 194 00:10:10,280 --> 00:10:15,400 Speaker 9: flagship New York station, Just say Alexa play Bloomberg eleven thirty. 195 00:10:16,400 --> 00:10:19,520 Speaker 3: Now it's our time of the Thursday where we talk 196 00:10:19,679 --> 00:10:24,320 Speaker 3: to Barry rid Holts, our Bloomer opinion colonists, founder of 197 00:10:24,400 --> 00:10:30,040 Speaker 3: Ritsholt Wealth Management and host of Masters in Business. Love 198 00:10:30,160 --> 00:10:33,400 Speaker 3: chatting with you always bear it and you have a 199 00:10:33,400 --> 00:10:38,319 Speaker 3: bit of an interesting take out. You quote William Goldman, 200 00:10:39,120 --> 00:10:41,640 Speaker 3: the scriptwriter for Butch Cassidy and The Sun Dance Kids. 201 00:10:41,679 --> 00:10:45,480 Speaker 3: All the Presidents, Man, marathon Man, etcetera. Nobody knows Princess 202 00:10:46,040 --> 00:10:48,960 Speaker 3: Princess Bride. There's too many, you. 203 00:10:48,920 --> 00:10:49,840 Speaker 4: Can get through all of them. 204 00:10:49,840 --> 00:10:54,200 Speaker 3: There's a laundry list, marathon Man, etcetera. Anyway, point being, 205 00:10:54,360 --> 00:10:58,800 Speaker 3: nobody knows anything. So Wall Street doesn't know anything either. 206 00:10:59,360 --> 00:11:02,760 Speaker 11: Very well, well, let me give you a little context 207 00:11:03,000 --> 00:11:06,480 Speaker 11: about what led Goldman to write that in his book 208 00:11:06,520 --> 00:11:10,120 Speaker 11: Adventures in the Screen Trade. So there was a couple 209 00:11:10,200 --> 00:11:15,320 Speaker 11: of guys named Lucas and Spielberg shopping moving around. 210 00:11:15,600 --> 00:11:17,240 Speaker 8: They couldn't get it made, and it. 211 00:11:17,320 --> 00:11:21,280 Speaker 11: Was called Raiders of the Lost Dark, and everybody turned 212 00:11:21,320 --> 00:11:24,760 Speaker 11: them down on it. And not long after that, Star 213 00:11:25,000 --> 00:11:28,920 Speaker 11: or before that, Star Wars was another film that all 214 00:11:29,000 --> 00:11:34,240 Speaker 11: the major studio execs turned down. And I kind of 215 00:11:34,360 --> 00:11:38,720 Speaker 11: was reminded of this because very quietly in the midst 216 00:11:38,760 --> 00:11:44,120 Speaker 11: of Barbenheimer, John Wick four snuck out and did nearly 217 00:11:44,200 --> 00:11:47,840 Speaker 11: half a billion dollars in box office, which is a 218 00:11:47,960 --> 00:11:51,559 Speaker 11: huge number for a fourth sequel of Just to Shoot 219 00:11:51,600 --> 00:11:54,920 Speaker 11: Him Up. And I did a little research and discovered 220 00:11:55,720 --> 00:11:59,480 Speaker 11: nobody in Hollywood wanted to make the first Jock John 221 00:11:59,520 --> 00:12:00,240 Speaker 11: Wick film. 222 00:12:00,559 --> 00:12:02,120 Speaker 8: And it's a reminder. 223 00:12:01,720 --> 00:12:07,800 Speaker 11: That experts who are thinking about the future really have 224 00:12:08,120 --> 00:12:12,320 Speaker 11: very little expertise as to what's gonna happen next quarter, 225 00:12:12,520 --> 00:12:14,000 Speaker 11: next year, next decade. 226 00:12:14,559 --> 00:12:16,079 Speaker 8: Nobody knows anything. 227 00:12:16,080 --> 00:12:18,720 Speaker 2: That I mean, this reminds me of the R Star 228 00:12:18,880 --> 00:12:22,800 Speaker 2: debate that we're having. It seems beyond ridiculous. I mean, 229 00:12:22,800 --> 00:12:25,000 Speaker 2: it's fine if you want to talk about whether or 230 00:12:25,000 --> 00:12:27,480 Speaker 2: not the Fed's going to raise rates or cut but 231 00:12:27,559 --> 00:12:31,640 Speaker 2: when you get into that kind of unknowable, it just 232 00:12:32,040 --> 00:12:35,839 Speaker 2: is an exercise in futility. 233 00:12:35,880 --> 00:12:37,000 Speaker 3: Purely theoretical. 234 00:12:37,280 --> 00:12:39,760 Speaker 2: And we will be having that discussion this afternoon with 235 00:12:39,840 --> 00:12:42,440 Speaker 2: John Williams at three thirty pm on Bloomberg Television. 236 00:12:42,440 --> 00:12:44,199 Speaker 3: But can I take you to the Wall Street Angleberry, 237 00:12:44,200 --> 00:12:46,959 Speaker 3: because we had this great story out earlier this week, 238 00:12:47,000 --> 00:12:50,680 Speaker 3: I think yesterday, I think Wall Street stock Market calls 239 00:12:50,800 --> 00:12:56,040 Speaker 3: very by firm, end by floor, and I'm just illustrating, 240 00:12:56,120 --> 00:12:59,800 Speaker 3: perhaps your point the cell side research teams are farm 241 00:13:00,080 --> 00:13:03,880 Speaker 3: are negative on you as equities than the investment managed teams. 242 00:13:03,960 --> 00:13:07,520 Speaker 3: You can see this even playing out within Morgan Stanley. 243 00:13:07,600 --> 00:13:10,199 Speaker 3: So how do you how do you live in this 244 00:13:10,320 --> 00:13:13,240 Speaker 3: in this sort of world if you are if you're 245 00:13:13,240 --> 00:13:15,959 Speaker 3: a trader, So first. 246 00:13:16,160 --> 00:13:20,280 Speaker 11: It's really important to separate the signal from the noise. 247 00:13:20,600 --> 00:13:23,920 Speaker 11: When I was on a trading desk, my habit was 248 00:13:24,040 --> 00:13:28,000 Speaker 11: to create a reading list but not read anything until 249 00:13:28,080 --> 00:13:31,320 Speaker 11: after four o'clock because if you read something early in 250 00:13:31,320 --> 00:13:35,839 Speaker 11: the morning, it very often would influence how you trade it. 251 00:13:35,960 --> 00:13:38,880 Speaker 11: And in fact, there have been academic studies that have 252 00:13:38,920 --> 00:13:42,679 Speaker 11: looked as to how sunny or rainy it is in 253 00:13:42,679 --> 00:13:46,120 Speaker 11: New York City, and the actual weather has an impact 254 00:13:46,200 --> 00:13:48,679 Speaker 11: on whether or not markets trade up a little bit 255 00:13:48,760 --> 00:13:52,120 Speaker 11: or trade down a little bit. Your psyche is so 256 00:13:52,360 --> 00:13:55,800 Speaker 11: malleable in ways that you're just wholly unaware of that. 257 00:13:55,920 --> 00:13:58,760 Speaker 11: A nice day means you're more optimistic, and hey, it's 258 00:13:58,800 --> 00:14:01,640 Speaker 11: beautiful out, and you tend to be more of a buyer. 259 00:14:02,200 --> 00:14:05,720 Speaker 11: So you really have to know yourself. You really have 260 00:14:05,840 --> 00:14:11,160 Speaker 11: to understand what's driving your decision making, and that's really 261 00:14:11,200 --> 00:14:14,679 Speaker 11: really difficult for people to do. We are just very 262 00:14:14,800 --> 00:14:18,720 Speaker 11: much unaware of our internal thought process. We think we're 263 00:14:18,760 --> 00:14:24,040 Speaker 11: making independent decisions, but lots of little influences affect how 264 00:14:24,080 --> 00:14:26,520 Speaker 11: we invest, how we trade, how we make decisions. 265 00:14:27,400 --> 00:14:29,960 Speaker 4: Was John Wick four, any good? Did you watch four? 266 00:14:30,760 --> 00:14:32,240 Speaker 8: I haven't seen four yet. 267 00:14:32,560 --> 00:14:35,920 Speaker 11: I loved the first one, and I found the second 268 00:14:35,920 --> 00:14:37,239 Speaker 11: one very amusing. 269 00:14:38,480 --> 00:14:39,920 Speaker 8: I haven't seen three yet. 270 00:14:39,960 --> 00:14:42,520 Speaker 11: What I kind of do is like what I did 271 00:14:42,520 --> 00:14:45,160 Speaker 11: with Guardians of the Galaxy when the third one came out. 272 00:14:45,560 --> 00:14:47,520 Speaker 11: I watched the first one, I watched the second one, 273 00:14:47,960 --> 00:14:49,840 Speaker 11: and then we went to the movies to see the 274 00:14:49,920 --> 00:14:53,080 Speaker 11: third one in three consecutive days. By the way, John 275 00:14:53,120 --> 00:14:57,080 Speaker 11: Wick five already approved it's going to be out in 276 00:14:57,120 --> 00:14:59,680 Speaker 11: twenty twenty six. Let me just put a little flesh 277 00:14:59,680 --> 00:15:02,480 Speaker 11: on the b owns as to how much money this 278 00:15:02,640 --> 00:15:03,200 Speaker 11: film made. 279 00:15:03,280 --> 00:15:05,760 Speaker 8: So it was made independently. The guys who were. 280 00:15:05,600 --> 00:15:11,200 Speaker 11: The choreographers and stuntmen for the Matrix movies were the 281 00:15:11,240 --> 00:15:15,960 Speaker 11: co directors. They had Keanu Reeves attached to this. No 282 00:15:15,960 --> 00:15:18,200 Speaker 11: one would make it, so they made it as an 283 00:15:18,200 --> 00:15:23,480 Speaker 11: independent film. They self funded it. It costs twenty million dollars. Today, 284 00:15:23,600 --> 00:15:28,880 Speaker 11: the John Wick franchise has generated two billion dollars between 285 00:15:28,880 --> 00:15:30,680 Speaker 11: the box office, the streaming rights. 286 00:15:30,960 --> 00:15:32,600 Speaker 8: There was a spinoff film. 287 00:15:32,360 --> 00:15:36,640 Speaker 11: There was a television series, comic books, video games, two 288 00:15:36,720 --> 00:15:41,400 Speaker 11: billion dollars. They couldn't get anybody to greenlight a twenty 289 00:15:41,440 --> 00:15:44,760 Speaker 11: million dollar movie it And now turn around and let's 290 00:15:44,800 --> 00:15:49,440 Speaker 11: apply this to investors. Which ETF, which mutual fund? What's 291 00:15:49,480 --> 00:15:52,000 Speaker 11: the FED gonna do? Where're the mark? Where's the market 292 00:15:52,000 --> 00:15:56,040 Speaker 11: gonna be? Instead of focusing on next month or next quarter. 293 00:15:56,400 --> 00:15:58,960 Speaker 11: The one thing we know is that over ten and 294 00:15:59,040 --> 00:16:01,960 Speaker 11: twenty year period we have a pretty good idea of 295 00:16:02,000 --> 00:16:04,520 Speaker 11: what assa class returns are going to be. Here's what 296 00:16:04,680 --> 00:16:08,320 Speaker 11: stocks return, Here's what bonds return. And people have to 297 00:16:08,320 --> 00:16:11,640 Speaker 11: stop thinking about tomorrow and start thinking about, hey, what 298 00:16:11,720 --> 00:16:15,080 Speaker 11: about my kids, what about my retirement, what about my grandkids. 299 00:16:15,720 --> 00:16:18,800 Speaker 11: That's a way to defeat the nobody knows anything sort 300 00:16:18,840 --> 00:16:19,960 Speaker 11: of philosophy. 301 00:16:20,520 --> 00:16:21,400 Speaker 4: You know what I've noticed. 302 00:16:22,120 --> 00:16:25,520 Speaker 2: I've noticed here at work that a lot of people 303 00:16:25,960 --> 00:16:32,320 Speaker 2: underestimate the allure of cars when it comes to selling clicks, 304 00:16:32,320 --> 00:16:34,720 Speaker 2: for example, And the same is true in movies, right 305 00:16:34,800 --> 00:16:38,920 Speaker 2: because that's the part of the part of the equation 306 00:16:39,000 --> 00:16:40,880 Speaker 2: that made John Wick such a big teller. He has 307 00:16:40,920 --> 00:16:43,000 Speaker 2: a boss for twenty nine in the first one. I 308 00:16:43,000 --> 00:16:45,960 Speaker 2: think he has a Chevelle SS in the second one. 309 00:16:46,320 --> 00:16:50,320 Speaker 2: And I guess people who don't care about cars really 310 00:16:50,360 --> 00:16:52,880 Speaker 2: don't see the draw, but people who do are going 311 00:16:52,960 --> 00:16:54,080 Speaker 2: to tune in for this kind of thing. 312 00:16:54,200 --> 00:16:55,880 Speaker 3: Yeah, Matt's looking at me, and I'm kind of rolling 313 00:16:55,920 --> 00:17:00,160 Speaker 3: my eyes because I have to say, I don't know cars. 314 00:16:59,720 --> 00:17:01,240 Speaker 3: I have a hybrid. 315 00:17:01,880 --> 00:17:05,719 Speaker 8: But but in the John Wick movie, the mcguindy that 316 00:17:05,880 --> 00:17:10,560 Speaker 8: drives the plot is a bunch of hoodlums see his 317 00:17:10,960 --> 00:17:14,520 Speaker 8: mustang and come to his house to steal it, not 318 00:17:14,600 --> 00:17:18,480 Speaker 8: realizing this is one of the most deadly hit men 319 00:17:18,200 --> 00:17:22,320 Speaker 8: in film lore. And so that's what starts the. 320 00:17:22,280 --> 00:17:24,080 Speaker 4: Whole and they kill his dog, right. 321 00:17:24,160 --> 00:17:25,800 Speaker 11: And that I need you to take this kill his dog, 322 00:17:25,880 --> 00:17:29,280 Speaker 11: which is recently deceased wife had given to him. 323 00:17:29,440 --> 00:17:31,119 Speaker 8: It is just a great plot. 324 00:17:31,359 --> 00:17:33,560 Speaker 2: Barry, thanks so much for joining us. Barrier Holts on 325 00:17:33,640 --> 00:17:34,720 Speaker 2: John Wick in the Markets. 326 00:17:35,720 --> 00:17:39,560 Speaker 9: You're listening to the Team Ken'ser Live program Bloomberg Markets 327 00:17:39,600 --> 00:17:42,680 Speaker 9: weekdays at ten am Eastern on Bloomberg dot Com, the 328 00:17:42,760 --> 00:17:45,919 Speaker 9: iHeartRadio app, and the Bloomberg Business App, or listen on 329 00:17:45,960 --> 00:17:47,960 Speaker 9: demand wherever you get your podcasts. 330 00:17:49,520 --> 00:17:53,240 Speaker 2: I am excited to welcome the mack E. Sales manager 331 00:17:53,280 --> 00:17:56,359 Speaker 2: for the Ford Motor Company, Michael Sago joins us to 332 00:17:56,440 --> 00:18:00,480 Speaker 2: talk about what's going on in this uh in this 333 00:18:01,200 --> 00:18:04,600 Speaker 2: quickly growing industry with really one of I think the 334 00:18:04,640 --> 00:18:09,200 Speaker 2: first standout products in American evs. Michael, thanks so much 335 00:18:09,200 --> 00:18:12,840 Speaker 2: for joining us. What does sales look like now for 336 00:18:12,880 --> 00:18:15,080 Speaker 2: the Machi? I mean I started seeing a lot more 337 00:18:15,119 --> 00:18:20,520 Speaker 2: of them last year and they've become they've become very present, 338 00:18:20,560 --> 00:18:24,000 Speaker 2: at least in this region. How many do you sell 339 00:18:24,040 --> 00:18:25,440 Speaker 2: in twenty twenty two and how many do you want 340 00:18:25,440 --> 00:18:26,480 Speaker 2: to sell in twenty twenty three. 341 00:18:27,720 --> 00:18:31,080 Speaker 12: So we've had great sales in the last couple of months. 342 00:18:31,080 --> 00:18:34,520 Speaker 12: So we actually took a bit of downtime earlier in 343 00:18:34,520 --> 00:18:38,480 Speaker 12: the year to revamp our production facilities to make sure 344 00:18:38,520 --> 00:18:41,240 Speaker 12: that we could meet demand for the Makis. So what's 345 00:18:41,280 --> 00:18:44,240 Speaker 12: great now is a lot of those extra units that 346 00:18:44,240 --> 00:18:46,560 Speaker 12: we've been able to produce are now out there in 347 00:18:46,600 --> 00:18:50,639 Speaker 12: the market and available for purchase and for customers to 348 00:18:50,640 --> 00:18:51,399 Speaker 12: get their hands on. 349 00:18:52,760 --> 00:18:58,280 Speaker 3: We're also hearing about the Mustang Machi Rally as well, 350 00:18:58,320 --> 00:19:04,440 Speaker 3: which the Verge actually called the Ford's off roadius performance 351 00:19:04,720 --> 00:19:09,280 Speaker 3: EVY yet tell us about the tell us all about 352 00:19:09,280 --> 00:19:10,119 Speaker 3: what this is about. 353 00:19:11,800 --> 00:19:15,720 Speaker 12: Love it so really excited to write another chapter in 354 00:19:15,840 --> 00:19:22,159 Speaker 12: Mustang's nearly six decade storied history with a Mustang Machi Rally. So, 355 00:19:22,880 --> 00:19:26,560 Speaker 12: as you know, it's actually a four door suv that's 356 00:19:26,560 --> 00:19:30,600 Speaker 12: all electric, seats five passengers, and we've had that vehicle 357 00:19:30,600 --> 00:19:32,000 Speaker 12: and market for a couple of years. 358 00:19:32,080 --> 00:19:33,920 Speaker 13: And this new variant, the Rally. 359 00:19:34,080 --> 00:19:37,880 Speaker 12: Allows us to go off the pavement and confidently onto 360 00:19:37,920 --> 00:19:41,560 Speaker 12: the dirt road. So this is a rally inspired electric 361 00:19:41,760 --> 00:19:46,200 Speaker 12: suv with really aggressive rally styling all around and lots 362 00:19:46,200 --> 00:19:50,359 Speaker 12: of extra capability built in. We've raised the vehicle twenty 363 00:19:50,400 --> 00:19:54,159 Speaker 12: five millimeters, we have off road tires on it, we 364 00:19:54,240 --> 00:20:00,640 Speaker 12: have extra special tune suspension for off roading. And this 365 00:20:00,680 --> 00:20:02,159 Speaker 12: thing is going to be a beast. It's going to 366 00:20:02,240 --> 00:20:04,800 Speaker 12: have at least six hundred and fifty pound feet of 367 00:20:04,840 --> 00:20:07,879 Speaker 12: torque and do zero to sixty in under three point 368 00:20:07,920 --> 00:20:08,680 Speaker 12: five seconds. 369 00:20:08,720 --> 00:20:10,960 Speaker 4: We're just looking at pictures of it there. 370 00:20:12,640 --> 00:20:16,200 Speaker 2: What I instantly wonder is why isn't it called a raptor, 371 00:20:16,880 --> 00:20:19,639 Speaker 2: you know, because in the at least in the gas 372 00:20:19,680 --> 00:20:22,760 Speaker 2: side of the business, when Ford makes an off road vehicle, 373 00:20:23,040 --> 00:20:25,240 Speaker 2: at least in terms of the F one fifty and 374 00:20:25,320 --> 00:20:29,240 Speaker 2: the Bronco. If it's if it's the pinnacle of the 375 00:20:29,600 --> 00:20:33,000 Speaker 2: off road offering, if it's the Apex Predator, you now 376 00:20:33,040 --> 00:20:34,400 Speaker 2: have the Raptor brand. 377 00:20:35,680 --> 00:20:36,359 Speaker 13: Great question. 378 00:20:36,480 --> 00:20:39,960 Speaker 12: So this is definitely different from a Raptor or a Bronco. 379 00:20:40,480 --> 00:20:43,439 Speaker 12: This is the Machi Rally is not necessarily meant to 380 00:20:43,480 --> 00:20:46,280 Speaker 12: be a rock crawler, but it's meant to perform really 381 00:20:46,359 --> 00:20:49,080 Speaker 12: well at high speed on loose surfaces, similar to what 382 00:20:49,160 --> 00:20:52,520 Speaker 12: a rally vehicle would do. And that's more the driving 383 00:20:52,560 --> 00:20:56,719 Speaker 12: experience that we're a benchmarking rather than that's than some slow, 384 00:20:57,440 --> 00:21:00,199 Speaker 12: precise rock crawling that you would use of bron Go 385 00:21:00,400 --> 00:21:01,280 Speaker 12: or a Raptor to do. 386 00:21:02,119 --> 00:21:04,199 Speaker 2: I mean, I use the Bronco or the Raptor for 387 00:21:04,240 --> 00:21:06,960 Speaker 2: the Baja one thousand. You know, I'm flying across the 388 00:21:07,000 --> 00:21:09,680 Speaker 2: desert in that vehicle. In fact, I was one of 389 00:21:09,720 --> 00:21:12,440 Speaker 2: the first Raptor buyers in my neighborhood. 390 00:21:12,440 --> 00:21:14,280 Speaker 4: Got one back in twenty fourteen. 391 00:21:14,640 --> 00:21:18,879 Speaker 2: In fact, I had my Raptor, was built at the 392 00:21:18,960 --> 00:21:22,240 Speaker 2: rouge and hand delivered. Believe it or not, the keys 393 00:21:22,280 --> 00:21:25,879 Speaker 2: were given to me in the factory by Alan Molally. 394 00:21:26,760 --> 00:21:30,119 Speaker 2: It dates me a little bit, but yeah, I was 395 00:21:30,119 --> 00:21:32,840 Speaker 2: a big, big fan of that vehicle. I still am. 396 00:21:33,080 --> 00:21:37,200 Speaker 2: When are these electric off road vehicle is going to 397 00:21:37,280 --> 00:21:39,679 Speaker 2: be on sale? When can I if I put in 398 00:21:39,720 --> 00:21:42,000 Speaker 2: my order now, or can I put in my order now? 399 00:21:42,040 --> 00:21:43,600 Speaker 4: And when can I pick one up at the dealership? 400 00:21:44,560 --> 00:21:47,760 Speaker 12: So order banks are not quite open yet, but we're 401 00:21:48,080 --> 00:21:52,480 Speaker 12: going to begin production early next year, targeting January right now, 402 00:21:52,840 --> 00:21:56,159 Speaker 12: and deliveries will begin shortly after that. So call it 403 00:21:56,240 --> 00:21:59,320 Speaker 12: a late Q one early Q two. You should be 404 00:21:59,320 --> 00:22:00,520 Speaker 12: able to get your hand on one. 405 00:22:00,400 --> 00:22:02,160 Speaker 4: Of these price bump What are you thinking? 406 00:22:02,200 --> 00:22:05,080 Speaker 2: I'm looking already at the GT version of the Machi 407 00:22:05,400 --> 00:22:07,720 Speaker 2: and I'm bumping up against sixty grand? 408 00:22:07,800 --> 00:22:08,800 Speaker 4: Is this going to put me over that? 409 00:22:09,960 --> 00:22:11,760 Speaker 13: So it'll be slightly over that. 410 00:22:11,800 --> 00:22:15,680 Speaker 12: We're targeting an MSRP of sixty five thousand right now, 411 00:22:15,680 --> 00:22:17,919 Speaker 12: but it's a very dynamic environment, as you know, and 412 00:22:18,000 --> 00:22:20,840 Speaker 12: we're going to confirm pricing closer to launch. 413 00:22:21,240 --> 00:22:25,520 Speaker 3: Okay, other than Matt who has like all the cars, 414 00:22:25,560 --> 00:22:26,280 Speaker 3: who's your target? 415 00:22:26,280 --> 00:22:26,800 Speaker 5: Fyer here? 416 00:22:27,960 --> 00:22:28,639 Speaker 13: Great question. 417 00:22:28,800 --> 00:22:32,240 Speaker 12: So what we're doing with the rally is really bringing 418 00:22:32,760 --> 00:22:36,440 Speaker 12: evs to folks that are adventure seekers and who value 419 00:22:36,480 --> 00:22:40,760 Speaker 12: an active lifestyle. So somebody who really wants the best 420 00:22:40,760 --> 00:22:43,800 Speaker 12: of both on road and off road. Somebody who wants 421 00:22:43,800 --> 00:22:46,960 Speaker 12: this for their commute Monday through Friday, but also wants 422 00:22:47,000 --> 00:22:49,679 Speaker 12: to take an off the beaten path adventure on the 423 00:22:49,720 --> 00:22:51,439 Speaker 12: weekends and wants to be able to do all that 424 00:22:51,480 --> 00:22:55,040 Speaker 12: in the same vehicle. So if you value technology and 425 00:22:55,080 --> 00:22:58,280 Speaker 12: an exhilarating drive experience, this is definitely the vehicle for you. 426 00:22:59,080 --> 00:23:01,440 Speaker 2: One of the questions I always have about have had 427 00:23:01,480 --> 00:23:07,240 Speaker 2: about evs is how I'm to be able to retrofit 428 00:23:07,280 --> 00:23:10,679 Speaker 2: them later on, you know, because battery technology developed so 429 00:23:10,800 --> 00:23:13,680 Speaker 2: quickly with a gas vehicle. 430 00:23:14,960 --> 00:23:16,000 Speaker 4: If I say I. 431 00:23:15,920 --> 00:23:18,359 Speaker 2: Have like a I don't know, a Boss three to 432 00:23:18,400 --> 00:23:21,600 Speaker 2: Oho two and I want to put in, you know, 433 00:23:24,200 --> 00:23:26,119 Speaker 2: like a four forty seven in there, I can just 434 00:23:26,200 --> 00:23:27,719 Speaker 2: pull out the engine and swap it. 435 00:23:27,920 --> 00:23:30,000 Speaker 4: But it's much more difficult with a battery. 436 00:23:30,280 --> 00:23:32,360 Speaker 2: What's your thought on how we're going to be able 437 00:23:32,359 --> 00:23:34,360 Speaker 2: to deal with these ten twenty years down the road. 438 00:23:35,880 --> 00:23:37,199 Speaker 13: So great question. 439 00:23:37,640 --> 00:23:40,760 Speaker 12: One of the best things about Mustang is how enthusiastic 440 00:23:40,840 --> 00:23:44,600 Speaker 12: our customers are about the brand, and we see that 441 00:23:44,680 --> 00:23:47,240 Speaker 12: with Maki as well. We see a lot of customers 442 00:23:47,440 --> 00:23:50,720 Speaker 12: that want to customize their vehicles and we're definitely here 443 00:23:50,800 --> 00:23:53,760 Speaker 12: for that, so we will have a full suite of 444 00:23:53,960 --> 00:23:57,520 Speaker 12: accessories that will be available when we launch. And the 445 00:23:57,560 --> 00:24:01,120 Speaker 12: other thing that's great about electric vehicles is we're able 446 00:24:01,160 --> 00:24:03,840 Speaker 12: to do things over through over the air updates and 447 00:24:04,040 --> 00:24:07,679 Speaker 12: different software pieces that we weren't able to do before, 448 00:24:07,800 --> 00:24:11,200 Speaker 12: So we can actually help you improve your vehicle over 449 00:24:11,240 --> 00:24:14,239 Speaker 12: the air, so hopefully makes that process even easier for 450 00:24:14,320 --> 00:24:15,000 Speaker 12: you in the future. 451 00:24:15,160 --> 00:24:17,240 Speaker 3: But that doesn't necessarily allow you to just kind of 452 00:24:17,240 --> 00:24:20,560 Speaker 3: switch out your battery when the battery technology. 453 00:24:20,880 --> 00:24:24,119 Speaker 2: Improves, right, it's hard to get to I imagine you'd 454 00:24:24,200 --> 00:24:27,359 Speaker 2: have to take out the interior and I mean if 455 00:24:27,400 --> 00:24:31,320 Speaker 2: the batteries in the floor to skateboard, right, So. 456 00:24:30,640 --> 00:24:33,199 Speaker 12: So battery swapping, you know that that'll be definitely a 457 00:24:33,240 --> 00:24:35,760 Speaker 12: conversation for another day. But there are things we can 458 00:24:35,800 --> 00:24:39,840 Speaker 12: do with different calibrations of the of the engine through 459 00:24:39,880 --> 00:24:43,000 Speaker 12: software that we can push through over the air updates 460 00:24:43,040 --> 00:24:47,040 Speaker 12: to enhance performance, things like our Blue Crewise one point 461 00:24:47,040 --> 00:24:49,359 Speaker 12: three that we're going to launch with the rally, you know, 462 00:24:49,480 --> 00:24:54,080 Speaker 12: has has been something that that improves from from version 463 00:24:54,119 --> 00:24:56,359 Speaker 12: to version, so a lot of this is actually going 464 00:24:56,440 --> 00:24:58,080 Speaker 12: to happen automatically for you. 465 00:24:58,320 --> 00:24:58,960 Speaker 13: In the future. 466 00:24:59,119 --> 00:25:02,480 Speaker 2: Blue Cruise is kind of like an automated driving or 467 00:25:02,520 --> 00:25:04,440 Speaker 2: something that gets closer to that, right. 468 00:25:05,000 --> 00:25:08,879 Speaker 12: Exactly, it's our hands free driving software that's that's in 469 00:25:08,960 --> 00:25:13,479 Speaker 12: all Mustang Makis and Blue Cruise one point three. One 470 00:25:13,520 --> 00:25:17,360 Speaker 12: of the greatest improvements is for narrow lanes and curves. 471 00:25:17,680 --> 00:25:21,080 Speaker 12: It's actually been in our internal tests, has stayed in 472 00:25:21,160 --> 00:25:24,400 Speaker 12: hands free mode five times longer than Blue Cruise one 473 00:25:24,400 --> 00:25:24,960 Speaker 12: point zero. 474 00:25:25,640 --> 00:25:27,760 Speaker 3: Look, Michael, I've got to ask you about this because 475 00:25:27,880 --> 00:25:31,600 Speaker 3: Ford and It's union discussions are so top of mind 476 00:25:31,640 --> 00:25:33,680 Speaker 3: for markets right now. I know you're a marketing guy, 477 00:25:34,440 --> 00:25:37,320 Speaker 3: but that you do really know about this vehicle. One 478 00:25:37,359 --> 00:25:39,120 Speaker 3: of the concerns, I guess from the union side has 479 00:25:39,160 --> 00:25:43,040 Speaker 3: been that the automation of these production of evs potentially, 480 00:25:43,359 --> 00:25:46,200 Speaker 3: you know, puts them out of out of work. 481 00:25:46,520 --> 00:25:47,960 Speaker 4: You need far fewer people to build an. 482 00:25:47,880 --> 00:25:52,479 Speaker 3: Electric exactly have you know, does the production of the 483 00:25:52,520 --> 00:25:54,920 Speaker 3: Machi and the Machi rally, you know, does that require 484 00:25:54,960 --> 00:25:56,240 Speaker 3: far fewer people. 485 00:25:58,160 --> 00:26:01,360 Speaker 12: Yeah, So that's definitely a qui uesh for another day 486 00:26:01,400 --> 00:26:07,600 Speaker 12: as well. We're excited about the rally and we're excited 487 00:26:07,640 --> 00:26:11,720 Speaker 12: for production to begin in January, all right, Uh not? 488 00:26:11,800 --> 00:26:15,800 Speaker 3: They I had to ask, but we do have to 489 00:26:15,840 --> 00:26:16,640 Speaker 3: ask those questions. 490 00:26:16,920 --> 00:26:18,920 Speaker 4: What about other versions? 491 00:26:18,960 --> 00:26:23,439 Speaker 2: Do you have any ideas about some other versions we 492 00:26:23,480 --> 00:26:26,119 Speaker 2: could see of the Mustang Maki. Is this going to 493 00:26:26,160 --> 00:26:29,400 Speaker 2: be something that where variants come out every couple of years. 494 00:26:30,080 --> 00:26:33,719 Speaker 12: So great question, and stay tuned for a few for 495 00:26:33,880 --> 00:26:37,720 Speaker 12: details on the entire twenty four model year Mack Mustang 496 00:26:37,760 --> 00:26:40,600 Speaker 12: Machi lineup. But I do want to share with you 497 00:26:41,160 --> 00:26:44,280 Speaker 12: one mentality that our team has adopted, and it's called 498 00:26:44,320 --> 00:26:50,080 Speaker 12: always on. So through with social media, with connected vehicle 499 00:26:50,200 --> 00:26:53,520 Speaker 12: data that's aggregated and anonymized, we're able to listen to 500 00:26:53,600 --> 00:26:56,800 Speaker 12: customers in a much more real time way than we 501 00:26:56,840 --> 00:27:00,560 Speaker 12: ever have in the past. This Machi rally is actually 502 00:27:00,800 --> 00:27:03,639 Speaker 12: went from an idea in an email to an actual 503 00:27:03,720 --> 00:27:07,000 Speaker 12: vehicle that you can drive in sixteen months, and that's 504 00:27:07,040 --> 00:27:08,960 Speaker 12: a process that could typically take three to. 505 00:27:08,960 --> 00:27:10,840 Speaker 13: Four years at an automaker. 506 00:27:11,240 --> 00:27:14,600 Speaker 12: So we're really excited about all the different variants that 507 00:27:14,640 --> 00:27:17,800 Speaker 12: can come from this in the future, and really hope 508 00:27:17,800 --> 00:27:20,840 Speaker 12: that you stay tuned for the full twenty four mili 509 00:27:20,920 --> 00:27:24,280 Speaker 12: year Mustang Machi lineup, which we'll be giving you more 510 00:27:24,320 --> 00:27:25,240 Speaker 12: details on soon. 511 00:27:25,480 --> 00:27:27,960 Speaker 2: Michael, thanks so much for joining us really appreciate Michael Sego, 512 00:27:28,000 --> 00:27:30,919 Speaker 2: their Macke sales manager at the Ford Motor Company. 513 00:27:31,320 --> 00:27:34,440 Speaker 9: You're listening to the tape. Catch our live program Bloomberg 514 00:27:34,480 --> 00:27:38,080 Speaker 9: Markets weekdays at ten am Eastern on Bloomberg Radio, the 515 00:27:38,119 --> 00:27:41,359 Speaker 9: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 516 00:27:41,400 --> 00:27:44,199 Speaker 9: You can also listen live on Amazon Alexa from our 517 00:27:44,240 --> 00:27:49,200 Speaker 9: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 518 00:27:50,280 --> 00:27:52,760 Speaker 4: Let's talk about pern Recard right now. 519 00:27:52,840 --> 00:27:56,359 Speaker 2: We have Alexander Riccard with us here, the CEO of 520 00:27:56,600 --> 00:28:01,320 Speaker 2: the famed liquor maker with us. The brands are too 521 00:28:01,400 --> 00:28:04,440 Speaker 2: numerous to mention. I grew up with My mom has 522 00:28:04,440 --> 00:28:07,679 Speaker 2: always had the Glenn Livett around, has always had it 523 00:28:07,720 --> 00:28:12,040 Speaker 2: handy in a healthy way, and I appreciate a lot 524 00:28:12,119 --> 00:28:15,520 Speaker 2: of the I grew up with Absolute posters all over 525 00:28:15,560 --> 00:28:15,960 Speaker 2: my wall. 526 00:28:15,960 --> 00:28:16,600 Speaker 4: When I was a kid. 527 00:28:16,640 --> 00:28:20,040 Speaker 2: It was the thing to find Absolute ads and then 528 00:28:20,040 --> 00:28:22,399 Speaker 2: to collect all of them. And I'm older than you, 529 00:28:22,480 --> 00:28:25,080 Speaker 2: so you may not remember that, Simon, But Alexander, thanks 530 00:28:25,080 --> 00:28:29,280 Speaker 2: so much for joining us. What to you is the 531 00:28:29,320 --> 00:28:32,320 Speaker 2: most important or the biggest growth driver of your business? 532 00:28:32,320 --> 00:28:34,560 Speaker 2: Because you have so many brands, so many children to 533 00:28:34,600 --> 00:28:35,359 Speaker 2: look after. 534 00:28:36,520 --> 00:28:39,320 Speaker 3: Hopefully adults excuse me, sorry, go ahead first, yeah. 535 00:28:39,160 --> 00:28:43,520 Speaker 7: Roll adults, absolutely listen. That the beauty is if you 536 00:28:43,600 --> 00:28:46,320 Speaker 7: look at the way we grew over the last let's 537 00:28:46,320 --> 00:28:50,240 Speaker 7: say twelve months, eighty five or percent of our growth 538 00:28:50,720 --> 00:28:54,240 Speaker 7: came from six different categories. That's the beauty of the industry. 539 00:28:54,520 --> 00:28:58,800 Speaker 7: I mean, every single category has amazing brands amongst it 540 00:28:59,080 --> 00:29:02,680 Speaker 7: that are growing. You mentioned some of them. By the way, Absolutely, 541 00:29:02,680 --> 00:29:05,440 Speaker 7: We've had an amazing year with Absolute Vodka. Globally, the 542 00:29:05,440 --> 00:29:08,880 Speaker 7: brand grew ten percent. You mentioned Glenn Livitt, one of 543 00:29:08,880 --> 00:29:12,080 Speaker 7: the fastest growing single molts in the world, doing very well. 544 00:29:12,200 --> 00:29:14,320 Speaker 7: And by the way, in the West, I could name 545 00:29:14,400 --> 00:29:17,440 Speaker 7: Jamison as well, which is just flying off the shelves 546 00:29:17,720 --> 00:29:20,720 Speaker 7: and it's great to see. But even other brands like 547 00:29:20,800 --> 00:29:24,520 Speaker 7: Malibu and Kolua, or even our Kniak brand Mark I 548 00:29:24,520 --> 00:29:24,960 Speaker 7: did want. 549 00:29:24,880 --> 00:29:27,000 Speaker 4: To ask you about do you love the big Lebowski. 550 00:29:27,240 --> 00:29:30,320 Speaker 2: Oh yeah, yeah, because the dude is drinking white Russians 551 00:29:30,320 --> 00:29:32,600 Speaker 2: the whole time, and that's the first thing I think 552 00:29:32,640 --> 00:29:33,880 Speaker 2: of when I look at Kalua. 553 00:29:34,720 --> 00:29:36,640 Speaker 7: And by the way, in the US, we have a 554 00:29:36,680 --> 00:29:42,440 Speaker 7: great Absolute Martini combo that worked very well last October 555 00:29:42,600 --> 00:29:46,080 Speaker 7: November December, ahead of the festive period. It's just amazing. 556 00:29:47,520 --> 00:29:50,840 Speaker 3: One of the big areas of demand for you and 557 00:29:50,920 --> 00:29:53,960 Speaker 3: the large share of your business about over forty percent 558 00:29:54,000 --> 00:29:57,400 Speaker 3: now is Asia. I know we talked you and I 559 00:29:57,440 --> 00:30:01,160 Speaker 3: talked about this last week, but I want to discuss 560 00:30:01,160 --> 00:30:06,640 Speaker 3: the changing appetites of particularly Chinese consumers. A. This is 561 00:30:06,840 --> 00:30:11,240 Speaker 3: a place where they're seeing some economic pain, but how 562 00:30:11,400 --> 00:30:13,880 Speaker 3: are their appetites for for alcohol changing at the moment? 563 00:30:14,320 --> 00:30:18,240 Speaker 7: You know it's it's it's when when the zero COVID 564 00:30:18,320 --> 00:30:23,160 Speaker 7: strategy was over and after going through a normalization phase, 565 00:30:23,920 --> 00:30:26,560 Speaker 7: we experienced in China exactly what the rest of the 566 00:30:26,560 --> 00:30:30,840 Speaker 7: world experienced post pandemic, which is what I call revenge conviviality. 567 00:30:30,960 --> 00:30:34,560 Speaker 7: Chinese consumers just started to go back out again in 568 00:30:34,640 --> 00:30:38,840 Speaker 7: the trade, going to see their relatives, their their friends, 569 00:30:39,160 --> 00:30:41,239 Speaker 7: a lot of weddings catching up and so on and 570 00:30:41,280 --> 00:30:43,880 Speaker 7: so forth. And as you said, there there is a 571 00:30:43,920 --> 00:30:48,040 Speaker 7: little bit of macroeconomic softness in China right now which 572 00:30:48,080 --> 00:30:51,400 Speaker 7: is impacting consumer confidence and therefore a little bit o 573 00:30:51,800 --> 00:30:54,880 Speaker 7: our sales. But the underlying fundamentals are there. I mean, 574 00:30:54,880 --> 00:30:56,400 Speaker 7: consumers want to go out. 575 00:30:56,480 --> 00:30:59,400 Speaker 3: Do they want sweeter stuff versus so. 576 00:30:59,480 --> 00:31:04,280 Speaker 7: In in China right now, they really love konyak, They 577 00:31:04,360 --> 00:31:09,280 Speaker 7: really love whiskey in particular, Single Mold and Absolute is 578 00:31:09,440 --> 00:31:13,480 Speaker 7: enjoying huge growth as the cocktail culture develops in China 579 00:31:13,520 --> 00:31:16,960 Speaker 7: as well. And there's a big structural shift which we 580 00:31:17,040 --> 00:31:21,760 Speaker 7: are seeing emerge in China, which are live venues, live 581 00:31:21,920 --> 00:31:26,480 Speaker 7: entertainment venues basically bores with local bands playing music and 582 00:31:26,560 --> 00:31:29,240 Speaker 7: Chinese consumers just going there and having a drink or two. 583 00:31:29,880 --> 00:31:32,800 Speaker 2: What you flagged to decline in sales in the current 584 00:31:32,840 --> 00:31:36,800 Speaker 2: quarter is that globally and what do you think is 585 00:31:36,840 --> 00:31:41,320 Speaker 2: behind that? Are people switching back from spirits to beer 586 00:31:41,360 --> 00:31:43,480 Speaker 2: and wine or what's driving it? 587 00:31:44,080 --> 00:31:47,560 Speaker 7: No, what's driving is basically a softness right now in 588 00:31:47,560 --> 00:31:50,880 Speaker 7: the quarter in China. And by the way, we're lapping 589 00:31:51,480 --> 00:31:54,480 Speaker 7: arec quarter the previous year. Over the last two quarters 590 00:31:54,520 --> 00:31:56,680 Speaker 7: in China we grew thirty two percent, So that's what 591 00:31:56,760 --> 00:32:00,360 Speaker 7: we're lapping in a soft environment. Number two, we are 592 00:32:00,440 --> 00:32:04,440 Speaker 7: lapping as well normalization in the US, which is by 593 00:32:04,520 --> 00:32:09,120 Speaker 7: far our largest market. So we expect a soft negative 594 00:32:09,120 --> 00:32:12,000 Speaker 7: in fact quord. So those tough comps, yeah, yeah, tough comps, 595 00:32:12,120 --> 00:32:13,320 Speaker 7: but also normalization. 596 00:32:14,120 --> 00:32:15,080 Speaker 4: What about weed. 597 00:32:15,400 --> 00:32:18,880 Speaker 2: Is that not a big competitor because I think a 598 00:32:18,880 --> 00:32:23,640 Speaker 2: lot of people in this country are drinking less alcohol 599 00:32:23,920 --> 00:32:27,400 Speaker 2: and you know, eating more gummies for example. 600 00:32:28,160 --> 00:32:30,800 Speaker 7: No, you know, I had the question back in in fact, 601 00:32:30,840 --> 00:32:34,280 Speaker 7: in twenty eighteen as cannabis was being legalized in a 602 00:32:34,360 --> 00:32:38,280 Speaker 7: number of states. Ever since, we've really monitored the situation 603 00:32:38,440 --> 00:32:43,560 Speaker 7: quite closely. And by the way, ever since, the spirit market, 604 00:32:43,560 --> 00:32:48,040 Speaker 7: the category in which we operate, premium spirits, have accelerated. 605 00:32:48,280 --> 00:32:50,160 Speaker 7: As a matter of fact, you know, the underlying trend 606 00:32:50,200 --> 00:32:52,920 Speaker 7: in the US for spirits is usually four to five 607 00:32:52,960 --> 00:32:54,960 Speaker 7: percent growth, and over the last three years in the 608 00:32:55,080 --> 00:32:56,959 Speaker 7: US they've grown eight percent. 609 00:32:57,720 --> 00:33:02,080 Speaker 3: Our colleagues really quickly. Here our colleague flagged the decline 610 00:33:02,080 --> 00:33:06,080 Speaker 3: and consumer appetite for alcohol because of GLP one drugs, 611 00:33:06,120 --> 00:33:08,680 Speaker 3: those new weight loss ibetes drugs. Is this on your 612 00:33:08,720 --> 00:33:09,360 Speaker 3: radar at all? 613 00:33:09,960 --> 00:33:12,440 Speaker 7: No, everything is on my radar, just like you know. 614 00:33:13,400 --> 00:33:15,680 Speaker 7: You know, six years ago we spoke about cannabis, and 615 00:33:15,720 --> 00:33:18,239 Speaker 7: ever since we've been looking at it closely, monitoring, just 616 00:33:18,280 --> 00:33:21,520 Speaker 7: making sure and this is new, so it's it's it's 617 00:33:21,720 --> 00:33:27,720 Speaker 7: still early to conclude anything tangible about it, but obviously 618 00:33:27,760 --> 00:33:29,600 Speaker 7: we'll be looking at it closely. 619 00:33:29,680 --> 00:33:31,960 Speaker 4: Yeah, sure, Alexander, thanks so much for coming in. Really 620 00:33:32,000 --> 00:33:33,360 Speaker 4: appreciate your time here. 621 00:33:33,400 --> 00:33:37,240 Speaker 2: Alexander Ricard there, the CEO of Perno Recard, the maker 622 00:33:37,360 --> 00:33:40,400 Speaker 2: of Monkey forty seven, Schwartzwald dry Gin. 623 00:33:40,600 --> 00:33:42,160 Speaker 4: This is Bloomberg. 624 00:33:42,760 --> 00:33:45,840 Speaker 9: You're listening to the tape cans our live program, Bloomberg 625 00:33:45,960 --> 00:33:49,560 Speaker 9: Markets weekdays at ten am Eastern on Bloomberg Radio, the 626 00:33:49,600 --> 00:33:52,840 Speaker 9: tune in app, Bloomberg dot Com, and the Bloomberg Business app. 627 00:33:52,880 --> 00:33:55,680 Speaker 9: You can also listen live on Amazon Alexa from our 628 00:33:55,720 --> 00:34:00,120 Speaker 9: flagship New York station, Just say Alexa playing Bloomberg eleven thirty. 629 00:34:01,560 --> 00:34:05,200 Speaker 3: I want to bring in our next guest, Jawad Mian. 630 00:34:05,760 --> 00:34:10,160 Speaker 3: He is the founder at Stray Reflections, a global macro 631 00:34:10,280 --> 00:34:16,200 Speaker 3: research firm with an unconventional view towards markets and trading. Joan, 632 00:34:16,400 --> 00:34:17,759 Speaker 3: I want to ask you because we're looking at a 633 00:34:17,760 --> 00:34:21,240 Speaker 3: pretty negative picture for some of these major tech names. 634 00:34:22,080 --> 00:34:25,840 Speaker 3: In Nvidia, Apple shares both down you know, roughly in 635 00:34:25,880 --> 00:34:29,160 Speaker 3: the three percent range, and then Asadac really leading our 636 00:34:29,239 --> 00:34:34,120 Speaker 3: losses today. We've heard some question marks about whether the 637 00:34:34,160 --> 00:34:38,080 Speaker 3: AI hype will live up to the kind of standards 638 00:34:38,080 --> 00:34:42,279 Speaker 3: that analysts have thought. Is this the end for this 639 00:34:42,760 --> 00:34:45,600 Speaker 3: tech enthusiasm part of the rally. 640 00:34:47,840 --> 00:34:50,560 Speaker 5: I don't think so, you know, feeling lost, confuser and 641 00:34:50,680 --> 00:34:54,760 Speaker 5: certain as much a hallmark of investing as a scarty 642 00:34:54,840 --> 00:34:57,200 Speaker 5: conviction and the sense of calm. So this kind of 643 00:34:57,320 --> 00:34:59,960 Speaker 5: period is quite normal. So what is confusing me actually 644 00:35:00,160 --> 00:35:02,920 Speaker 5: is not the NATSAKS thirty seven percent rally, not that 645 00:35:02,960 --> 00:35:06,400 Speaker 5: inflict has really receded with so little ectomic pain, and 646 00:35:06,400 --> 00:35:08,839 Speaker 5: not even that the tenure bond yields are breaking out. 647 00:35:09,440 --> 00:35:11,960 Speaker 5: A confusing aspect for me is why institutionally industries are 648 00:35:12,000 --> 00:35:15,080 Speaker 5: sitting still sitting out this bull market, which is why 649 00:35:15,120 --> 00:35:18,000 Speaker 5: I believe any correction even here will be quite shallow. 650 00:35:19,680 --> 00:35:21,880 Speaker 14: Juwat. If I'm looking at the tenure right now, the 651 00:35:21,920 --> 00:35:24,400 Speaker 14: yield at four point two seven percent, is there a 652 00:35:24,440 --> 00:35:26,319 Speaker 14: point that the yields can break out? To you that 653 00:35:26,320 --> 00:35:29,480 Speaker 14: we would see things actually materially start to break when 654 00:35:29,520 --> 00:35:32,960 Speaker 14: it comes to some of these tech heavy stocks and indexes. 655 00:35:34,960 --> 00:35:37,200 Speaker 5: I think if the on yield is rising for the 656 00:35:37,360 --> 00:35:40,440 Speaker 5: right reasons, which is based on greater klomic continence a 657 00:35:40,520 --> 00:35:43,600 Speaker 5: higher real neutral rate, I think equities will do just 658 00:35:43,640 --> 00:35:46,920 Speaker 5: fine in that scenario. If yields were rising like they 659 00:35:46,920 --> 00:35:50,200 Speaker 5: did last year, where we were still dealing with inflation uncertainty. 660 00:35:50,920 --> 00:35:53,560 Speaker 5: We weren't sure where the Fed rate high cycle would end. 661 00:35:53,840 --> 00:35:56,239 Speaker 5: Confusion by the terminal rate. That was what was really 662 00:35:56,280 --> 00:36:02,200 Speaker 5: hurting stocks. Yeah, it's quite And you know, if we 663 00:36:02,560 --> 00:36:06,480 Speaker 5: look at past you know cycles where above the rising 664 00:36:06,520 --> 00:36:10,520 Speaker 5: since nineteen seventies, she noticed is that those periods are 665 00:36:10,520 --> 00:36:13,239 Speaker 5: overwhelmingly positive for stocks. So in nine out of those 666 00:36:13,239 --> 00:36:17,040 Speaker 5: eleven cycles, equis did okay the positive return of around 667 00:36:17,120 --> 00:36:20,759 Speaker 5: thirteen percent over a twelve month horizon. What happens is 668 00:36:20,800 --> 00:36:24,440 Speaker 5: tend to contract, but equities do okay because earnings grow 669 00:36:24,520 --> 00:36:28,080 Speaker 5: fast enough to offset those lower valuations. So even as 670 00:36:28,120 --> 00:36:31,239 Speaker 5: bondials increase from four to four point three and let's 671 00:36:31,239 --> 00:36:33,920 Speaker 5: say higher, if we are going to be seeing forward 672 00:36:33,920 --> 00:36:37,080 Speaker 5: earnings climbing as we are current with S five hundred 673 00:36:37,080 --> 00:36:39,480 Speaker 5: and brought up epsesment next year at two hundred and 674 00:36:39,480 --> 00:36:43,080 Speaker 5: forty years, that's still is prop for equities. 675 00:36:44,520 --> 00:36:46,919 Speaker 3: And sorry to our our radio viewers there, I should 676 00:36:46,960 --> 00:36:49,200 Speaker 3: have told you that the disembodied voice that you might 677 00:36:49,200 --> 00:36:51,920 Speaker 3: have just heard before Jawad's was actually that of our 678 00:36:52,360 --> 00:36:56,000 Speaker 3: Stash reporter Bailey Lipschaltz, who joins us for the next 679 00:36:56,200 --> 00:36:58,360 Speaker 3: couple of minutes, fifteen to twenty minutes. 680 00:36:58,120 --> 00:37:00,400 Speaker 4: Here, you know, Jimad. 681 00:37:00,640 --> 00:37:03,040 Speaker 3: One of the big concerns has been the health of 682 00:37:03,680 --> 00:37:08,319 Speaker 3: the consumer going forward, responsible for about two thirds of 683 00:37:08,520 --> 00:37:14,000 Speaker 3: overall economic GDP. What are you reading in the tea 684 00:37:14,080 --> 00:37:16,360 Speaker 3: leaves here from some of the earning statements we've had 685 00:37:16,400 --> 00:37:18,520 Speaker 3: over the last couple of weeks. From the data that 686 00:37:18,520 --> 00:37:19,000 Speaker 3: you're seeing. 687 00:37:21,239 --> 00:37:23,920 Speaker 5: So, I think the big question that concern this year 688 00:37:23,960 --> 00:37:26,719 Speaker 5: coming into it was that where everyone was expecting a 689 00:37:26,760 --> 00:37:30,680 Speaker 5: recession and it hasn't happened yet the liber market remains 690 00:37:30,760 --> 00:37:33,520 Speaker 5: quite healthy. I think what we're trying to understand now 691 00:37:33,600 --> 00:37:35,359 Speaker 5: is the fact that intership and stivity in the US 692 00:37:35,360 --> 00:37:38,680 Speaker 5: economy is historically low, and what that means is basically 693 00:37:39,960 --> 00:37:43,600 Speaker 5: in consumers and households, we deleverged both the GFC and 694 00:37:43,640 --> 00:37:46,440 Speaker 5: then POSTPIG given the booster incomes and the further plunge 695 00:37:46,440 --> 00:37:52,480 Speaker 5: in interest costs you're looking at how so, oh. 696 00:37:52,360 --> 00:37:55,480 Speaker 3: It looks like we might have lost Jawad there. We'll 697 00:37:55,480 --> 00:37:58,480 Speaker 3: be back to him soon as soon as we get 698 00:37:58,520 --> 00:38:00,920 Speaker 3: him back on the line. Looking a mixed picture in 699 00:38:00,960 --> 00:38:04,000 Speaker 3: stocks right now, dal Jones up about two tents of 700 00:38:04,000 --> 00:38:07,640 Speaker 3: one percent, but we're seeing some weakness in SMP down 701 00:38:07,680 --> 00:38:11,359 Speaker 3: about three tenths of one percent and the NASDAC down 702 00:38:12,360 --> 00:38:14,480 Speaker 3: about one percent. Oh, I look, I believe we have 703 00:38:14,600 --> 00:38:18,440 Speaker 3: Juwad back with us. You were talking about the consumer, 704 00:38:18,480 --> 00:38:22,120 Speaker 3: the pain that the consumer has been feeling, but not 705 00:38:22,160 --> 00:38:24,960 Speaker 3: necessarily bad for stocks. I believe we lost you there. 706 00:38:25,000 --> 00:38:26,560 Speaker 3: So just recap a little bit the last bit that 707 00:38:26,600 --> 00:38:27,239 Speaker 3: you were saying there. 708 00:38:28,520 --> 00:38:30,560 Speaker 5: What I was saying was that you were realizing is 709 00:38:30,560 --> 00:38:34,080 Speaker 5: that the intershiate tensitivity of the US economy or households 710 00:38:34,120 --> 00:38:39,719 Speaker 5: and corporate low why consumers have so if you have 711 00:38:39,840 --> 00:38:42,920 Speaker 5: nominal growth blocking in at around six seven percent, as 712 00:38:42,920 --> 00:38:45,120 Speaker 5: has been the case so far this year, even if 713 00:38:45,160 --> 00:38:48,160 Speaker 5: FET thundred five percent is not troublesome, it's only when 714 00:38:48,200 --> 00:38:51,160 Speaker 5: you really have a sharper slowdown in nominal growth and 715 00:38:51,280 --> 00:38:53,720 Speaker 5: higher interestrate levels that you start to see the consumer 716 00:38:53,719 --> 00:38:56,319 Speaker 5: really pulling back. And that has the case so far. 717 00:38:56,480 --> 00:38:57,719 Speaker 5: I don't expect it to be the case of the 718 00:38:57,719 --> 00:39:00,880 Speaker 5: next section nine months either, And drawn looking. 719 00:39:00,640 --> 00:39:03,560 Speaker 14: At the tape, obviously we're starting September off in the red, 720 00:39:03,680 --> 00:39:07,920 Speaker 14: seasonally the worst month for major US averages. What can 721 00:39:08,560 --> 00:39:12,319 Speaker 14: spur investors to put capital back into the market. We 722 00:39:12,400 --> 00:39:15,520 Speaker 14: have CPI data coming up coming out about a week. 723 00:39:15,719 --> 00:39:18,560 Speaker 14: We have a FED blackout period. Obviously there's a lot 724 00:39:18,600 --> 00:39:21,680 Speaker 14: of macroeconomic concerns as it relates to Apple. What draws 725 00:39:21,800 --> 00:39:23,200 Speaker 14: investors back into this market? 726 00:39:25,600 --> 00:39:28,719 Speaker 5: I think it's just a matter of understanding slows and 727 00:39:28,920 --> 00:39:33,080 Speaker 5: participation levels. Right, So, even though recession concerns are fading, 728 00:39:33,080 --> 00:39:36,560 Speaker 5: which you realize looking at different survey like the Bank 729 00:39:36,600 --> 00:39:38,919 Speaker 5: of America, it was un managers of issues like global 730 00:39:38,960 --> 00:39:42,000 Speaker 5: equity allocation is still at eleven percent underweight, which is 731 00:39:42,000 --> 00:39:44,360 Speaker 5: one of a half stand deviation below the DOCTO average. 732 00:39:44,440 --> 00:39:46,800 Speaker 5: You know, the overweighting bonds is the two standard deviation. 733 00:39:47,400 --> 00:39:50,200 Speaker 5: And so what you're seeing is currently this understanding that 734 00:39:50,239 --> 00:39:54,520 Speaker 5: maybe why and stocks when bonds are yielding five percent 735 00:39:54,520 --> 00:39:57,520 Speaker 5: of the short term But our view is actually bonds 736 00:39:57,600 --> 00:40:00,759 Speaker 5: are expensive here and stocks could be relative cheap or 737 00:40:00,760 --> 00:40:03,000 Speaker 5: a reliative basis. So I think it's going to be 738 00:40:03,080 --> 00:40:07,439 Speaker 5: simply an understanding that with yields moving higher. It's usually 739 00:40:07,600 --> 00:40:11,320 Speaker 5: investors came into the year quite underweight equities. They expected 740 00:40:11,400 --> 00:40:14,600 Speaker 5: their private market book exposure will sort of help them 741 00:40:14,600 --> 00:40:18,479 Speaker 5: with that. The private markets have underperformed bundials have risen 742 00:40:18,680 --> 00:40:20,960 Speaker 5: and they're realizing that equities underweight is even bigger than 743 00:40:20,960 --> 00:40:23,799 Speaker 5: their thought. So in conversations when I pick up and 744 00:40:23,800 --> 00:40:26,000 Speaker 5: compositioning data, is that we're going to see more and 745 00:40:26,000 --> 00:40:30,040 Speaker 5: more participation flows moving into equities, which will keep any 746 00:40:30,160 --> 00:40:35,000 Speaker 5: pullback quite shallow. Before we move from here, George. 747 00:40:34,719 --> 00:40:37,840 Speaker 3: As quickly, we only have about thirty seconds here, but 748 00:40:37,960 --> 00:40:40,120 Speaker 3: I know that you are a portfolio manager in the 749 00:40:40,120 --> 00:40:45,480 Speaker 3: Middle East. Recently in their past dramatic rise in the 750 00:40:45,560 --> 00:40:48,200 Speaker 3: importance of that region has for the rest of the world. 751 00:40:48,440 --> 00:40:51,120 Speaker 3: Is that something that can continue even if oil doesn't 752 00:40:51,120 --> 00:40:52,319 Speaker 3: remain ninety dollars of arrow. 753 00:40:54,560 --> 00:40:56,520 Speaker 5: Yeah, I mean, I think there's plenty of equity buffers 754 00:40:56,560 --> 00:40:59,200 Speaker 5: to be influential, and I think most importantly what matters 755 00:40:59,239 --> 00:41:02,440 Speaker 5: from there is just the AILL production policy. Right, So 756 00:41:02,560 --> 00:41:05,359 Speaker 5: that's the real way that you'll see a pass through 757 00:41:06,040 --> 00:41:08,399 Speaker 5: from a global market perspective. You know, what is open 758 00:41:08,480 --> 00:41:10,200 Speaker 5: going to do with AILL cuts And they've already said 759 00:41:10,200 --> 00:41:11,960 Speaker 5: that they can extend their cuts for now, so which 760 00:41:12,040 --> 00:41:13,719 Speaker 5: keeps aid prices higher than your tone. 761 00:41:14,239 --> 00:41:15,400 Speaker 4: Yeah, and very interesting. 762 00:41:15,960 --> 00:41:20,120 Speaker 3: That's Jawad Mihan, He's the founder of Stray reflections the 763 00:41:20,239 --> 00:41:24,360 Speaker 3: global asset management firm. Thank you for joining us here 764 00:41:24,440 --> 00:41:27,800 Speaker 3: on Bloomberg with me and Bailey Lipschaltz. This is Bloomberg. 765 00:41:28,160 --> 00:41:31,279 Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can 766 00:41:31,280 --> 00:41:35,080 Speaker 2: subscribe and listen to interviews in Apple Podcasts or whatever 767 00:41:35,160 --> 00:41:38,880 Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 768 00:41:39,080 --> 00:41:41,000 Speaker 2: at Matt Miller nineteen seventy three. 769 00:41:41,480 --> 00:41:42,320 Speaker 8: And I'm Faull Sweeney. 770 00:41:42,360 --> 00:41:45,000 Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you 771 00:41:45,000 --> 00:41:48,399 Speaker 1: can always catch us worldwide at Bloomberg Radio