WEBVTT - We Need To Feel Each Other's Pain: Northern Trust's Thomas 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.160 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:09.200 we bring you interviews from CEOs, A, market pros, and 0:00:09.400 --> 0:00:12.799 Bloomberg experts, along with essential market moving news. Kind the 0:00:12.800 --> 0:00:16.320 Bloomberg Markets Podcast on Apple Podcasts or wherever you listen 0:00:16.360 --> 0:00:20.880 to podcasts, and on Bloomberg dot com. This morning, we 0:00:20.920 --> 0:00:23.639 are fortunate to welcome shan Drawn Thomas. He is the 0:00:23.680 --> 0:00:27.520 president of Northern Trust Asset Management. Typically we'd sit down 0:00:27.520 --> 0:00:30.280 with shun Drawn and talk about markets where he thinks 0:00:30.280 --> 0:00:33.320 our opportunities, but today we'll do something a little bit different. Recently, 0:00:33.320 --> 0:00:38.159 shun Drawn UH composed a letter UH addressed to Corporate 0:00:38.159 --> 0:00:41.720 American early September entitled I Can't Feel my Pain talking 0:00:41.720 --> 0:00:45.479 about combating systemic racism, Sun Drown. Thank you so much 0:00:45.520 --> 0:00:48.400 for joining us. We really appreciate your time. Give us 0:00:48.400 --> 0:00:50.280 a sense of what you were trying to accomplish with 0:00:50.400 --> 0:00:54.320 your letter entitled again, I Can't Feel my Pain. Well, 0:00:54.360 --> 0:00:56.600 first of all, Paul, Bonnie, thank you so much for 0:00:56.640 --> 0:01:00.280 having me on this morning. You know, I've been very 0:01:00.320 --> 0:01:04.160 engaged in the dialogue that's been taking place both not 0:01:04.240 --> 0:01:07.880 only within our company, but within the broader marketplace. And 0:01:08.120 --> 0:01:10.120 you know, it was born out of both you know, 0:01:10.280 --> 0:01:14.280 my own personal reflections and then the experiences of others 0:01:14.319 --> 0:01:17.200 that that often don't uh well I would say, going stated, 0:01:17.560 --> 0:01:19.560 because they don't have the same kind of platform that 0:01:19.640 --> 0:01:22.640 I do. But as this had progressed, one of the 0:01:22.760 --> 0:01:27.319 things that I reflected on was the challenge as a 0:01:27.319 --> 0:01:30.440 black executive over the course of my career, because when 0:01:30.440 --> 0:01:33.399 you're dealing with issues of race that proverbial is I 0:01:33.440 --> 0:01:36.560 like to say third real topic. It's not one that 0:01:36.760 --> 0:01:41.080 you can honestly comfortably engage in uh in in in 0:01:41.160 --> 0:01:44.160 the in the workplace. And often it's just because of 0:01:44.240 --> 0:01:48.040 the nature of the cultural dynamic in terms of dealing 0:01:48.040 --> 0:01:50.160 with that kind of issue. And so one of the 0:01:50.240 --> 0:01:54.360 challenges that you have, particularly as a black professional is 0:01:54.920 --> 0:01:58.040 uh you have to in some ways sort of bottle 0:01:58.560 --> 0:02:01.800 the natural emotions when you say, for instance, in your 0:02:02.080 --> 0:02:06.000 community or external environment, see things like what happened with 0:02:06.040 --> 0:02:09.200 George Floyd, or you see instances of what occurred more 0:02:09.280 --> 0:02:13.640 recently uh in uh Wisconsin that's right next door to me, 0:02:14.080 --> 0:02:16.400 and so um that was one of the things I 0:02:16.480 --> 0:02:19.480 was really seeking to to to give a voice too, 0:02:19.919 --> 0:02:22.800 and really to share some some honest and earnest perspective 0:02:22.840 --> 0:02:28.640 on what's been the response so far Chandon, Well, you know, 0:02:29.120 --> 0:02:32.200 it's it's been really incredible to me because for me, 0:02:32.360 --> 0:02:34.280 you know, over the course of this year, I've actually 0:02:34.320 --> 0:02:38.240 had a number of open letters that have offered on 0:02:38.440 --> 0:02:41.960 key issues, whether it's my thought around compassionate leadership uh 0:02:42.000 --> 0:02:45.000 in the pandemic. But the response to this, you know, 0:02:45.120 --> 0:02:48.720 really has been overwhelming. I think for a couple of reasons. Uh. 0:02:48.840 --> 0:02:52.800 Number one, UH is when when people can really identify 0:02:52.960 --> 0:02:57.079 with someone in their business, UM that's actually experiencing these 0:02:57.200 --> 0:02:59.880 kind of things. And I think the the the the 0:03:00.000 --> 0:03:03.320 axiom that I used, pain hurts because it should um, 0:03:03.400 --> 0:03:06.519 has really been a powerful metaphor because we realize in 0:03:06.560 --> 0:03:09.760 the same way that our brains really tell us, you know, 0:03:10.040 --> 0:03:13.760 when something in our environment is dangerous or provides a 0:03:13.800 --> 0:03:16.399 threat to our physical and mental health. What I suggested 0:03:16.440 --> 0:03:18.640 in the letter is, you know, our hearts in an 0:03:18.680 --> 0:03:21.200 emotion and a spiritual sense, do the same thing, and 0:03:21.240 --> 0:03:24.200 both for the individual, we need the capacity and ability 0:03:24.240 --> 0:03:26.920 to be able to process and feel that pain, but 0:03:27.120 --> 0:03:31.040 importantly in social relationships in an organization. We need to 0:03:31.080 --> 0:03:34.440 be able to understand, empathize and feel one another's pain 0:03:34.760 --> 0:03:37.960 if we're going to work effectively together and to have 0:03:38.000 --> 0:03:41.800 a strong culture central on what role do you think 0:03:42.720 --> 0:03:48.960 corporate America should play in dealing with this diversity issue 0:03:49.200 --> 0:03:51.320 or race issue and all these things. What role do 0:03:51.360 --> 0:03:55.040 you think corporate America should play? Well? First of all, 0:03:55.160 --> 0:03:58.760 from a very practical standpoint, corporate America has a principal 0:03:58.880 --> 0:04:02.720 role to play. So so think about many of our experiences. 0:04:03.040 --> 0:04:06.720 I spend the majority of my waking hours engage in 0:04:06.840 --> 0:04:10.360 my work and with the professionals that I deal with 0:04:10.400 --> 0:04:14.560 in the workplace, and so anything that affects me right 0:04:14.800 --> 0:04:17.800 in this case, you know, the construct of race, which 0:04:17.839 --> 0:04:20.839 has been around for half a millennium, is one of 0:04:20.960 --> 0:04:25.120 the most pervasive and impactful social constructs that we know, 0:04:25.440 --> 0:04:27.640 particularly in the Western world, certainly here in the US, 0:04:27.920 --> 0:04:30.520 and so affects every aspect of life. And so it's 0:04:30.560 --> 0:04:32.680 not like we get to go to work and we have, 0:04:32.800 --> 0:04:35.080 say a work life that is separate from our real life. 0:04:35.400 --> 0:04:38.440 We bring all of those things with us into the workplace. 0:04:38.920 --> 0:04:41.479 And so to the extent, working as part of a 0:04:41.560 --> 0:04:45.480 cooperative means that we come together as individuals for a 0:04:45.520 --> 0:04:47.960 common mission and a common purpose and a common vision, 0:04:48.240 --> 0:04:51.479 which shared values. How can you not, in the context 0:04:51.480 --> 0:04:56.400 of the workplace, then address something like systemic racism our 0:04:56.520 --> 0:04:59.080 mandates the answer, I mean, it feels like there shouldn't 0:04:59.080 --> 0:05:00.960 be a need for mandate, but it also feels like 0:05:01.000 --> 0:05:06.680 it's not getting done without them. Chandon, Well, it's interesting because, um, 0:05:06.960 --> 0:05:11.839 there's some in some corners a reflective, reflexive rejection to 0:05:11.920 --> 0:05:14.479 quote unquote say mandates or targets. But I find that 0:05:14.520 --> 0:05:17.800 ironic because if I think about my responsibilities, I have 0:05:17.880 --> 0:05:21.560 the privilege of leading a global business, and so anything 0:05:21.640 --> 0:05:25.320 of import that we are focused on. Not only do 0:05:25.400 --> 0:05:29.320 we have priorities around, we have targets and we have 0:05:29.440 --> 0:05:33.080 measurements against And although those are common in our business, 0:05:33.080 --> 0:05:35.919 in fact, not only are the common, they're expected, and 0:05:35.960 --> 0:05:38.160 to the extent in any of my areas of primary 0:05:38.200 --> 0:05:41.880 responsibility I didn't have those, I would be viewed to 0:05:41.960 --> 0:05:45.839 be profligated my responsibility. But when it comes to advancing 0:05:45.920 --> 0:05:49.560 something that we in many aspects say is very important 0:05:49.600 --> 0:05:53.000 to us, like diversity inclusion, Uh, then there is often 0:05:53.040 --> 0:05:55.200 a pushback on saying we should have a target or 0:05:55.200 --> 0:05:58.840 a specific expectation or clear and transparent measurements. But I 0:05:58.920 --> 0:06:01.440 think it should be just the same as everything of 0:06:01.520 --> 0:06:05.200 import we do in a business context. Chandra, is this 0:06:05.320 --> 0:06:08.880 time different? It feels, at least to certain observers that 0:06:09.760 --> 0:06:12.719 the what's happened in the country over the last six 0:06:12.760 --> 0:06:16.440 months as it relates to police brutality against certain members 0:06:16.440 --> 0:06:20.120 of UH minority communities, that it is different this time. 0:06:20.160 --> 0:06:23.520 Do you think it might be different? UH, well, I'll 0:06:23.560 --> 0:06:27.120 tell you, um So, I have a mixed perspective on that. 0:06:27.560 --> 0:06:30.800 If you go over the last um call it six 0:06:30.839 --> 0:06:35.000 seven decades, We've we've seen multiple periods in our history 0:06:35.600 --> 0:06:40.200 where we've had um social unrest UH and it's usually 0:06:40.279 --> 0:06:45.520 been led by young, courageous people of diverse groups and backgrounds, 0:06:45.520 --> 0:06:47.800 and we're seeing that again today. So if you ask me, 0:06:47.839 --> 0:06:50.479 when I look at history, that's something that that in 0:06:50.480 --> 0:06:53.600 a sense rhymes what I feel like when people say 0:06:53.720 --> 0:06:56.000 is different. And I would acknowledge this if I think about, 0:06:56.120 --> 0:06:59.039 you know, my twenty six years working in financial services 0:06:59.080 --> 0:07:01.440 in the business that i've a d and then doing 0:07:01.480 --> 0:07:04.960 that in a corporate context. The nature of the dialogue 0:07:05.000 --> 0:07:11.200 in recent decades has not been this transparent um and 0:07:11.480 --> 0:07:15.080 has not been as engaging. So I think our challenge 0:07:15.160 --> 0:07:17.680 at this point is to say, what I call this 0:07:17.760 --> 0:07:21.040 moment that we have, how do we translate it into 0:07:21.160 --> 0:07:24.920 a sustainable movement, because again, this is not the first 0:07:24.920 --> 0:07:29.080 time in history that we've had meaningful um discourse and 0:07:29.120 --> 0:07:33.040 even meaningful social movement on issues as it pertains to 0:07:33.120 --> 0:07:36.720 race and racial quality. Schandron, thank you for bringing us 0:07:36.800 --> 0:07:39.800 this letter. It is a September letter. I can't feel 0:07:39.840 --> 0:07:41.280 my pain. But if you go to the Northern Trust 0:07:41.360 --> 0:07:43.880 website you can see other writings from Schandron Thomas on 0:07:43.920 --> 0:07:48.480 the subject, and we appreciate him. Today President at Northern Trust, 0:07:51.200 --> 0:07:53.320 but it is time to check in on Homberg Opinion now. 0:07:53.320 --> 0:07:57.640 Ellen Wold is president of Transversial Consulting and an nonresident 0:07:57.720 --> 0:08:01.360 Senior Fellow at the Atlantic Council's Global Energy Center. For 0:08:01.440 --> 0:08:04.200 our Purposes today, She's also Bloomberg Opinion columnist and has 0:08:04.200 --> 0:08:07.760 written a column on OPEC's power over the oil market. 0:08:07.840 --> 0:08:10.520 As we celebrate, I suppose that's the right way to 0:08:10.560 --> 0:08:14.239 put it, the sixtieth anniversary of OPEC this week, Ellen, 0:08:14.320 --> 0:08:17.320 thanks for joining. Has OPEC been a force for good 0:08:17.360 --> 0:08:21.160 in the world. Well, I think that OPEC has certainly 0:08:21.160 --> 0:08:24.960 been a force in the world. Um Initially, really, when 0:08:25.000 --> 0:08:28.440 OPEC was sounded in nineteen sixty, nobody really paid it 0:08:28.560 --> 0:08:32.400 much notice at all, and it wasn't until nine seventy 0:08:32.520 --> 0:08:36.400 three that it actually became a household name or political 0:08:36.480 --> 0:08:38.960 talking point, because that was really the first time that 0:08:39.000 --> 0:08:43.600 OPEC was able to have any real effects over the markets. 0:08:43.760 --> 0:08:47.400 And for consuming nations, this was a very big shock 0:08:47.600 --> 0:08:53.160 because suddenly their energy prices basically quadruples almost overnight, and 0:08:53.200 --> 0:08:56.760 there were mass shortages. So OPEC was seen very negatively. 0:08:57.120 --> 0:09:01.560 But for the producing countries, for Venezuela, for Saudi Arabia, 0:09:01.600 --> 0:09:04.440 for a rock, for iron, these were countries that for 0:09:04.520 --> 0:09:08.000 many years had really been producing oil at prices that 0:09:08.040 --> 0:09:10.440 were probably below what they should have been. And so 0:09:10.559 --> 0:09:14.520 for these countries, the rise in oil prices did provide 0:09:14.559 --> 0:09:18.880 them with cash that they used for divine So so 0:09:18.920 --> 0:09:22.319 in that sense, uh, the rise and prices did help, 0:09:22.720 --> 0:09:26.000 you know, assist in the development and economic development of 0:09:26.000 --> 0:09:31.079 some of these countries which traditionally had been somewhat poor. So, Ellen, 0:09:31.120 --> 0:09:34.360 I'm old enough to remember seventy three and the looking 0:09:34.400 --> 0:09:37.160 at your license plate and if you had an odd number, 0:09:37.480 --> 0:09:39.360 you would go on certain days and get it even number, 0:09:39.360 --> 0:09:43.640 you'd go on other days to the pumps OPEC. Since then, 0:09:44.040 --> 0:09:47.280 how is it evolved? This is essentially Saudi Arabia and 0:09:47.559 --> 0:09:49.520 Russia and maybe a couple other people that we have 0:09:49.559 --> 0:09:51.920 to worry about. How was it really evolved as a 0:09:52.000 --> 0:09:56.840 market setting mechanism. That's a really good question because initially 0:09:56.840 --> 0:09:59.199 it seemed like OPAQUE was kind of this boogeyman at 0:09:59.200 --> 0:10:04.480 this enemy that existed to basically, uh control consumers and 0:10:04.559 --> 0:10:06.839 extract money out of them. And over the years it's 0:10:06.880 --> 0:10:10.400 definitely changed. At first, there was this kind of heaty 0:10:10.600 --> 0:10:14.280 enthusiasm for wow, we can basically charge whatever we want. 0:10:14.559 --> 0:10:17.040 And since then OPEC has evolved to take a much 0:10:17.080 --> 0:10:19.680 more balanced view of the market. And I think Saudi 0:10:19.720 --> 0:10:22.880 Arabia really did lead the way in this, because Saudi 0:10:22.880 --> 0:10:26.040 Arabia was always concerned at setting prices for oil too 0:10:26.120 --> 0:10:30.400 high would lead to demand destruction, and so they were 0:10:30.400 --> 0:10:34.320 always very sensitive about really managing the market, taking a 0:10:34.320 --> 0:10:37.880 long term view, and I think over time OPEK evolved 0:10:37.880 --> 0:10:42.200 into a much more technocratic and professional organization today. In fact, 0:10:42.240 --> 0:10:45.079 they issue in the demand forecasts they do a lot 0:10:45.120 --> 0:10:50.120 of really great data collection and analysis uh that analysts 0:10:50.120 --> 0:10:53.800 find very very useful. Now that they've expanded this group 0:10:53.840 --> 0:10:56.600 to include Russia, it really very much is a Saudi 0:10:56.720 --> 0:10:59.599 Russian show because they're the biggest producers, they have the 0:10:59.679 --> 0:11:03.880 most spare capacity to wield in this situation. And yet 0:11:03.960 --> 0:11:07.240 at the same time, players like Iraq and Nigeria are 0:11:07.280 --> 0:11:09.560 always a thorn in the side and they can have 0:11:09.640 --> 0:11:13.080 an effect on the market simply by kind of defying uh, 0:11:13.240 --> 0:11:18.120 the group. So it's not just a Saudi Russian show. Yeah, 0:11:18.120 --> 0:11:20.280 it's really stunning. I was going to say a more 0:11:20.320 --> 0:11:23.000 inclusive OPEC, but that was a little tongue in cheek. 0:11:23.120 --> 0:11:26.880 I mean, the idea that Russia has huge sway now 0:11:26.920 --> 0:11:31.400 in this OPEC plus group is pretty phenomenal. Is Russia 0:11:31.520 --> 0:11:35.000 a good actor in terms of its oil dealings with 0:11:35.040 --> 0:11:38.320 the world, because certainly some countries don't believe that Russia 0:11:38.360 --> 0:11:41.600 is a good actor in other areas well. I think 0:11:41.600 --> 0:11:44.000 that one of the things that that OPEC has to 0:11:44.040 --> 0:11:46.439 realize that Russia is that Russia is always going to 0:11:46.520 --> 0:11:49.920 put Russia first. They're never going to put the group first. 0:11:50.040 --> 0:11:53.120 And that was actually one of the reasons why Ali 0:11:53.280 --> 0:11:55.599 on that you meet. The former Saudi oil minister was 0:11:55.800 --> 0:12:00.280 very wary of getting into some kind of larger deal 0:12:00.440 --> 0:12:04.199 with Russia because he'd seen Russia basically make promises, make 0:12:04.240 --> 0:12:07.200 agreements and then turn around and do exactly the opposite, 0:12:07.240 --> 0:12:09.360 and so if he didn't trust them at all. I 0:12:09.360 --> 0:12:13.600 think that Russia has definitely shifted in that respect somewhat, 0:12:13.640 --> 0:12:16.440 but it's still a constant challenge to make sure that 0:12:16.640 --> 0:12:20.280 there's enough incentive for Russia to stay as part of 0:12:20.320 --> 0:12:22.800 the group and not you know, go off and do 0:12:22.880 --> 0:12:25.760 its own thing. And still it's always been one of 0:12:25.760 --> 0:12:30.400 the big laggards in terms of compliance with its promised quotas. 0:12:30.640 --> 0:12:33.120 Right now it happens to be doing much better than 0:12:33.160 --> 0:12:37.400 say Iraq, but it's always it's always a gamble as 0:12:37.400 --> 0:12:39.319 to whether they can keep Russia in. In fact, the 0:12:39.360 --> 0:12:43.280 whole thing practically fell apart in March, so it's very 0:12:43.360 --> 0:12:46.960 much kind of a thin line here, alright. So Ellen, 0:12:46.960 --> 0:12:49.160 that's this supply side of the equation. I'm looking at 0:12:49.280 --> 0:12:51.440 w T I crude here just under thirty eight dollars 0:12:51.440 --> 0:12:54.040 a barrel had been in that forty three dollar range 0:12:54.080 --> 0:12:57.320 for most of August. Is this really being is this 0:12:57.400 --> 0:12:59.400 really is that Take a look at the global UH 0:12:59.559 --> 0:13:04.360 crude market, demand driven market, and markets telling us we 0:13:04.360 --> 0:13:08.679 don't see much demand out there. Yeah, demand is the 0:13:08.960 --> 0:13:12.959 big picture today and that's really I think what markets 0:13:12.960 --> 0:13:16.680 are coming to terms with today. Over the summer, I 0:13:16.679 --> 0:13:19.200 think there were absolutely a lot of signs that demand 0:13:19.280 --> 0:13:22.280 wasn't as strong as people thought it was. There. We 0:13:22.280 --> 0:13:26.079 were seeing good increases in demand all throughout the summer, 0:13:26.160 --> 0:13:28.520 But really I think those are hiding some of the 0:13:28.920 --> 0:13:31.479 or kind of covering over some of the larger weaknesses. 0:13:31.760 --> 0:13:34.080 And now that the summer is basically over, people have 0:13:34.160 --> 0:13:37.400 stopped trying to go on whatever vacations they could have. 0:13:37.679 --> 0:13:41.319 We're now seeing these weaknesses come to light in a 0:13:41.440 --> 0:13:44.800 much stronger way and realizing that, uh, there there's going 0:13:44.840 --> 0:13:47.160 to be serious weaknesses and demand for the rest of 0:13:48.000 --> 0:13:51.880 not into and the market is just going to have 0:13:52.000 --> 0:13:54.000 to take that into account. And so I think we're 0:13:54.040 --> 0:13:58.920 seeing a price correction with this realization in mind. Now, 0:14:00.320 --> 0:14:02.600 is there a forecast for when the world is no 0:14:02.679 --> 0:14:09.280 longer dependent on hydrocarbons? Well, if you ask yeska vp uh, 0:14:09.320 --> 0:14:12.680 they forecast that data come much sooner than than other 0:14:12.760 --> 0:14:16.720 people I think that there's definitely a hope that you know, 0:14:16.760 --> 0:14:22.040 at some point between that that might that might be true. 0:14:22.080 --> 0:14:25.760 But I think that that's very much dependent on technology 0:14:25.800 --> 0:14:28.640 and the pace of technological development, and I don't think 0:14:28.640 --> 0:14:33.120 that we have really seen the kind of innovation that 0:14:33.160 --> 0:14:38.200 will lead to mass adoption of non hydrocarbon sources across 0:14:38.240 --> 0:14:42.760 the globe, and so those forecasts are very much are 0:14:42.920 --> 0:14:48.320 very much hope rather than a realistic prediction. Ellen Wall, 0:14:48.360 --> 0:14:50.680 thank you so much for joining us. Dr ellen Wald. 0:14:50.800 --> 0:14:54.680 She's president a Transversal Consulting. She has also a Bloomberg 0:14:55.280 --> 0:14:58.440 Opinion contributor. You can read her work and all the 0:14:58.440 --> 0:15:01.200 work for the good folks of Bloomberg Opinion at Bloomberg 0:15:01.240 --> 0:15:04.920 dot com, slash Opinion or on the terminal by typing 0:15:04.920 --> 0:15:07.520 an O, P, I, N GO and vannie. You know, 0:15:07.560 --> 0:15:09.480 as Dr Wald was suggesting here, it seems to be 0:15:09.520 --> 0:15:12.680 a demand driven market. In the market participants seem to 0:15:12.720 --> 0:15:15.800 be saying, I just don't see a big pickup in demand. Well, 0:15:15.840 --> 0:15:19.960 airlines certainly don't need any products and vehicles on the 0:15:20.040 --> 0:15:23.360 road for sure, but probably not as much as before 0:15:23.400 --> 0:15:26.040 with people not just doing their daily commute. But it's 0:15:26.080 --> 0:15:28.840 pretty amazing that it's the sixtieth anniversary of OPEC, which 0:15:28.920 --> 0:15:32.360 is literally a global household name. I would I would 0:15:32.360 --> 0:15:35.120 just imagine there isn't a single household that you could 0:15:35.120 --> 0:15:37.360 go in to in the world and not know that 0:15:37.400 --> 0:15:40.160 OPEC would be recognized there. Yeah, and I certainly remember 0:15:40.200 --> 0:15:42.880 back to those early seventies waiting in line at the 0:15:42.920 --> 0:15:47.920 gas station forecas before we have green on the screen 0:15:48.000 --> 0:15:51.040 yet again, and yet again, Tex stocks are leading the 0:15:51.080 --> 0:15:54.400 way tech investors, seemingly shrugging off that nearly ten percent 0:15:54.440 --> 0:15:56.920 pullback we saw just last month to get a sense 0:15:56.960 --> 0:16:00.360 of is there still room to move with these tech stocks? 0:16:00.360 --> 0:16:03.840 That's welcome. David Coudla, founder, CEO and chief investment strategist 0:16:03.920 --> 0:16:08.400 of Mainstake Capital Management. They've got three billion dollars under management. David, 0:16:08.400 --> 0:16:10.720 thanks so much for joining us. Again, we always appreciate 0:16:10.800 --> 0:16:13.800 your perspective here. So again, tech investors got a little 0:16:13.800 --> 0:16:16.120 bit of a you know, a scared last month with 0:16:16.160 --> 0:16:19.960 that pullback, uh and nearly a ten percent correction in 0:16:20.040 --> 0:16:24.040 tech stocks, yet seems to not have scared many people away. 0:16:24.040 --> 0:16:28.440 How are you viewing that sector of the market. It was, 0:16:28.840 --> 0:16:32.240 it was a scary three days certainly, you know, uh, 0:16:32.920 --> 0:16:35.920 a sharp correction over those three days, you know, and 0:16:35.920 --> 0:16:38.320 then the days that ensued and from peak to trough 0:16:38.400 --> 0:16:42.280 on the NASTAC one hundred INCHRA day. The low actually 0:16:42.280 --> 0:16:46.120 came last Friday, so about a little over a week 0:16:46.200 --> 0:16:51.400 that tech stocks were in trouble. But you know, uh, 0:16:51.680 --> 0:16:54.960 if I said that evaluations had become frosty, that was 0:16:55.080 --> 0:16:59.160 that's an understatement for sure. And they've been frosy for 0:16:59.160 --> 0:17:02.440 for months, you know, even before we came into the 0:17:02.480 --> 0:17:06.520 bear market. But so so certainly you know that the 0:17:06.960 --> 0:17:11.199 that correction was needed. And I say that correction was 0:17:11.320 --> 0:17:14.680 needed because I think it was a correction that we're 0:17:14.680 --> 0:17:17.800 now already coming out of. We've got two strong days 0:17:17.840 --> 0:17:22.159 for the nasdac A tech stocks yesterday and today. And 0:17:22.560 --> 0:17:26.560 you know, it is our our favored sector in our portfolios. 0:17:26.600 --> 0:17:29.119 We've talked about it on the show many times, not 0:17:29.280 --> 0:17:32.159 only in the past few months, but the past few years, 0:17:32.720 --> 0:17:37.280 and um, we we continue to like it in in uh, 0:17:37.560 --> 0:17:41.159 continue to be overweight the sector even though you know, 0:17:41.560 --> 0:17:43.920 I think it's it's prudent at these levels and coming 0:17:43.960 --> 0:17:47.600 into the election that investors look hard at their portfolios 0:17:47.680 --> 0:17:51.200 for how much risk they do have because we'll see 0:17:51.200 --> 0:17:54.880 more volatility like that. I think between now in the election, 0:17:55.680 --> 0:17:58.399 how much of the NALTAC would you advise people to own? 0:17:58.520 --> 0:18:02.560 It sounds stave like you think this you know move 0:18:02.760 --> 0:18:05.520 is not a pivot as such, it's just a little breather. 0:18:07.920 --> 0:18:11.280 I think it is a breather. I think that, Uh, 0:18:11.920 --> 0:18:14.040 the NASAC will continue to be strong. When we look 0:18:14.080 --> 0:18:17.199 across all the industry sectors and we look good, you know, 0:18:17.240 --> 0:18:19.600 where are the stocks that continue to do well where 0:18:19.640 --> 0:18:24.199 the stocks did well during the lockdowns, either because you know, 0:18:24.320 --> 0:18:26.960 technology had continue to do well with their second or 0:18:26.960 --> 0:18:31.560 growth stories or technology that we're enablers for retailers or 0:18:31.640 --> 0:18:36.880 e commerce I t UM those those are the companies 0:18:36.920 --> 0:18:39.520 that have the best balance sheets, have the best free 0:18:39.600 --> 0:18:44.280 cash flow, have tremendous growth rates. Uh. It just continues 0:18:44.320 --> 0:18:47.080 to be such a strong sector. And when we say technology, 0:18:47.680 --> 0:18:52.479 you know, that's very broad. Whether we're talking about hardware, uh, 0:18:52.640 --> 0:18:58.560 I t e commerce, other Internet, it's it's a broad sector. 0:18:58.680 --> 0:19:02.159 But uh, you know, technology is eating the world. And 0:19:02.320 --> 0:19:05.000 we've heard that phrase many times, but it's true. And 0:19:05.040 --> 0:19:08.000 when you know technology is disrupting when it comes into 0:19:08.080 --> 0:19:10.639 an industry, when you know, the worst thing can happen 0:19:10.720 --> 0:19:14.080 is to, you know, to find out in the morning that, uh, 0:19:14.119 --> 0:19:16.960 you know, Jeff Bezos, who has leveraged technology to do 0:19:17.000 --> 0:19:20.800 what he's done with Amazon, is coming into your industry. Uh, 0:19:20.920 --> 0:19:26.040 like when he did that with UH and Kroger. The 0:19:26.040 --> 0:19:27.960 CEO of Kroger woke up one morning to find out 0:19:28.000 --> 0:19:32.880 he's coming into the grocery industry. But the point being 0:19:32.920 --> 0:19:36.159 that that the technology is being leveraged in that way. 0:19:36.359 --> 0:19:38.040 Are there other places we can go? We want to 0:19:38.040 --> 0:19:41.800 hedge our portfolios with gold because gold is more attractive 0:19:41.920 --> 0:19:44.840 to us now than bonds. With rates so low, we 0:19:44.880 --> 0:19:48.320 think consumer discretionary looks attractive, you know, other sectors we 0:19:48.320 --> 0:19:51.159 want to diverse by into. The technology is going to 0:19:51.160 --> 0:19:54.639 be overweighting our portfolios for some time, David, you mentioned 0:19:55.200 --> 0:19:58.120 the election, and some people started to raise some concerns 0:19:58.119 --> 0:20:02.800 about the potential for a can tested election an uncertain outcome. Uh, 0:20:03.240 --> 0:20:06.159 you know, maybe a legal process and the uncertainty that 0:20:06.240 --> 0:20:09.280 may bring into the markets. How do you af factor 0:20:09.320 --> 0:20:15.080 that into your thinking? Well, we think that this could 0:20:15.080 --> 0:20:17.920 be it could be a real problem for the markets. 0:20:18.000 --> 0:20:20.600 You know, we could have this scenario that's shaping up 0:20:21.119 --> 0:20:24.160 where you know, we don't we we don't have election nights, 0:20:24.160 --> 0:20:26.240 and we're not gonna have an election night any longer. 0:20:26.280 --> 0:20:29.520 We're gonna have an election month where you know, we're 0:20:29.520 --> 0:20:33.920 seeing this scenario come about where we could have on 0:20:34.080 --> 0:20:39.840 election night potentially one candidate looks like the winner and 0:20:39.880 --> 0:20:43.200 maybe a clear winner, and as all the absentee ballots 0:20:43.320 --> 0:20:47.600 or the mail in ballots come in over the coming days, 0:20:48.080 --> 0:20:52.240 that may look to change or potentially change. So that anxiety, 0:20:52.320 --> 0:20:55.600 that uncertainty. The markets hate uncertainty. So that uncertainty we 0:20:55.680 --> 0:20:58.679 have leading up the election. And again it's not as 0:20:58.800 --> 0:21:03.199 much about uh, which party wins or who wins the 0:21:03.240 --> 0:21:06.880 election as it is the uncertainty leading up to the election, 0:21:06.920 --> 0:21:10.600 so the market can price it in price in the certainty. Um, 0:21:12.000 --> 0:21:14.600 we've only had that uncertain leading up the election. It 0:21:14.680 --> 0:21:17.159 may be very uncertain for days after, and it may 0:21:17.200 --> 0:21:20.080 be very uncertain how it gets resolved, and that could 0:21:20.080 --> 0:21:26.040 cause some incredible indigestion and volatility for the markets that 0:21:26.040 --> 0:21:28.440 that could potentially go on for the only days but weeks. 0:21:28.640 --> 0:21:32.119 So you know, we are concerned about that. David Coula 0:21:32.119 --> 0:21:34.359 always gore to get your thoughts. Thank you for joining 0:21:34.400 --> 0:21:37.480 us today. David Coula is CEO and chief investment strategist 0:21:37.520 --> 0:21:41.040 of Mainstay Capital Management, about three billion dollars in assets 0:21:41.119 --> 0:21:44.280 under management, coming to us all the way from Michigan today. 0:21:44.280 --> 0:21:46.480 It's always interesting to speak to people around the country, 0:21:46.520 --> 0:21:50.600 but what he says Paul about uncertainty is really interesting 0:21:50.680 --> 0:21:53.400 and to some it's an obvious point, but it's going 0:21:53.480 --> 0:21:57.919 to only get more vivid as we approach the election. 0:21:57.920 --> 0:22:00.879 Marko Kolonovitch, for example, of JP Morgan, the famed quant, 0:22:01.000 --> 0:22:03.240 talks about this a lot and how we're really only 0:22:03.480 --> 0:22:05.040 part of the way there, even though the election as 0:22:05.040 --> 0:22:07.479 well as on fifty days or fifty days or so 0:22:07.640 --> 0:22:11.119 away at this point, we will talk about this throughout 0:22:11.160 --> 0:22:14.400 the afternoon. Marco Colonovot John B TV at one pm 0:22:14.440 --> 0:22:16.320 Eastern as well, may as well get that in there. 0:22:16.480 --> 0:22:23.119 This is Bloomberg bubble, bubble toil in trouble at Credit Suits. 0:22:23.160 --> 0:22:26.200 It seems in fact Credit Suite and UBS are even 0:22:26.280 --> 0:22:30.760 potentially investigating whether to come together. Let's bring in somebody 0:22:30.760 --> 0:22:32.520 who knows a lot more about this. Alison Williams, the 0:22:32.560 --> 0:22:36.680 senior analyst for Global Investment Banks and asset management at 0:22:36.680 --> 0:22:40.879 Bloomberg Intelligence. How realistic is it that credit suits and 0:22:41.000 --> 0:22:46.320 UBS could merge, Allison? So I would call it unlikely 0:22:46.600 --> 0:22:50.520 but not impossible. And uh, you know, normally this is 0:22:50.560 --> 0:22:54.080 the type of story that I would read and think 0:22:54.160 --> 0:22:56.639 it was rather silly. But I think the fact that 0:22:57.480 --> 0:23:01.280 UM it does seem like the chairman has approach regulators 0:23:01.640 --> 0:23:04.000 UM and is listening to do do this gives it 0:23:04.119 --> 0:23:08.560 some haft UM. I think the key sticking point, you know, 0:23:08.680 --> 0:23:13.479 even if the local regulators agree UM, could relate to 0:23:13.840 --> 0:23:17.400 anti trust issues and their home markets. So these two 0:23:17.440 --> 0:23:22.000 banks have huge global businesses. Investment banking and trading is 0:23:22.000 --> 0:23:24.400 when we talk about where they compete with the US. 0:23:24.520 --> 0:23:28.080 Wealth management is an area where UM UBS is a 0:23:28.119 --> 0:23:32.640 global leader. Crowds sweets is also strong. But I think 0:23:32.880 --> 0:23:36.360