WEBVTT - JPMorgan’s Surprise Dealmaking Gain Shows Tariff Fear Easing 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, Podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.600 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:18.560 Eastern on Applecarplay and Android Auto with the Bloomberg Business App. 0:00:18.640 --> 0:00:21.920 Listen on demand wherever you get your podcasts, or watch 0:00:21.960 --> 0:00:23.120 us live on YouTube. 0:00:23.680 --> 0:00:27.120 Welcome about Bloomberg Intelligence. I'm Lise Matteo alongside Paul Sweeney. 0:00:27.560 --> 0:00:31.080 Big day for bank earning some mixed reports though. Taking 0:00:31.120 --> 0:00:32.800 a look at the stock, we have JP Morgan they're 0:00:32.840 --> 0:00:35.840 down their shares down about half percent, Wells Fargo down 0:00:36.000 --> 0:00:38.159 five percent, we have City up about one and a 0:00:38.159 --> 0:00:40.559 half percent. So here to break it all down for 0:00:40.680 --> 0:00:43.440 us and what happened with each bank is Alison Williams, 0:00:43.479 --> 0:00:47.839 who else Bloomberg Intelligence, Senior analyst, Global Banks and Asset Managers. Alison, 0:00:47.840 --> 0:00:49.839 Thanks for joining us here in the studio. Good to 0:00:49.840 --> 0:00:52.680 see you. So let's start with JP Morgan, right, they 0:00:52.720 --> 0:00:55.680 had some surprise deal making gains. I mean, is that 0:00:56.160 --> 0:00:58.480 a sign that taraffears are easy or how do you 0:00:58.480 --> 0:00:58.760 take it? 0:00:58.920 --> 0:01:01.040 I mean they had a solid quarter. 0:01:01.080 --> 0:01:03.640 There's always a high bar for JP Morgan, but I 0:01:03.680 --> 0:01:08.640 think a really good quarter, strong returns, good organic growth, 0:01:08.760 --> 0:01:11.120 and I think, you know, about a billion dollars of 0:01:11.160 --> 0:01:14.679 upside with trading and fees, and so I think that 0:01:14.720 --> 0:01:17.160 we you know, we did see that that fee pick 0:01:17.240 --> 0:01:19.920 up we saw April stall, then we saw fees really 0:01:20.000 --> 0:01:23.160 did pick up in May and June. As you said, 0:01:23.600 --> 0:01:27.720 it really is. The advisory business was big upside, you know, 0:01:27.760 --> 0:01:33.080 for both JP Morgan and City and we also saw 0:01:33.240 --> 0:01:36.959 IPOs better and so we have seen that improving sentiment. 0:01:37.360 --> 0:01:39.520 I think there is going to be a little bit 0:01:39.520 --> 0:01:42.000 of a lift in terms of some of the expectations 0:01:42.000 --> 0:01:44.480 for those banking fees going forward as well. 0:01:44.640 --> 0:01:48.080 Red Headline crossing the Bloomberg terminal, Tesla's top North America 0:01:48.160 --> 0:01:50.600 sales executive, Troy Jones exits. 0:01:50.720 --> 0:01:52.840 That's according to the Wall Street Journal. So when it 0:01:52.920 --> 0:01:53.320 rains at. 0:01:53.240 --> 0:01:55.040 Pours there all right, here we go. So we had 0:01:55.480 --> 0:01:58.440 JP Morgan, City Group in Wells report today. Guess what 0:01:58.800 --> 0:02:01.480 I worked at all of the firms Chase and Hatton 0:02:01.520 --> 0:02:05.480 Bank not part of JP Morgan, Salomon Brothers now part 0:02:05.480 --> 0:02:09.440 of City Group, and Wheat First Securities, which is. 0:02:09.440 --> 0:02:10.400 Now part of Wells Fargo. 0:02:10.400 --> 0:02:13.160 That's what Wills Fargo got its original broker deal license 0:02:13.240 --> 0:02:16.000 by acquiring my firm Wheak for Securities, Richard Virginia. 0:02:16.080 --> 0:02:17.720 So I got I'm biased all over the place here. 0:02:17.800 --> 0:02:18.760 Let's start with Citygroup. 0:02:18.800 --> 0:02:20.720 I think that's got the most upside because I think 0:02:21.560 --> 0:02:24.240 it's underperformed for such a long time. It was just 0:02:24.320 --> 0:02:29.200 begging for really, really, really good management. Is this, I mean, 0:02:29.200 --> 0:02:31.200 a stock's hitting fifty two weeks high today? Is this 0:02:31.440 --> 0:02:32.840 the turnaround that everybody's been waiting for? 0:02:33.000 --> 0:02:35.359 You think, think, yeah, Jane is getting it done right. 0:02:35.440 --> 0:02:40.000 So and and to be fair, you know, her predecessor's 0:02:40.080 --> 0:02:42.280 made some changes, but I think she's She's made some 0:02:42.320 --> 0:02:46.400 tough decisions, you know, especially the sale of the you know, 0:02:46.440 --> 0:02:51.480 the Mexico business, where she really cut her teeth. I 0:02:51.520 --> 0:02:55.240 think that is a sign that she can be objective 0:02:55.360 --> 0:02:58.720 in terms of deciding what's right for the business. And 0:02:58.919 --> 0:03:03.840 they are working there way up to some better return. So, 0:03:04.480 --> 0:03:06.760 you know, there's a lot of talk about the evaluation 0:03:06.840 --> 0:03:08.920 for City Group. We know that they trade at a 0:03:09.000 --> 0:03:13.280 discount to their book value. They traded assistant to their peers. Wow, 0:03:13.480 --> 0:03:16.800 that's what happens when you don't earn your cost of 0:03:16.880 --> 0:03:21.120 capital and your returns are below peers. But I think 0:03:21.160 --> 0:03:23.639 the changes that they're making are moving them in the 0:03:23.680 --> 0:03:24.200 right direction. 0:03:24.520 --> 0:03:26.640 So when I look at Wells Fargo, I'm trying to 0:03:26.680 --> 0:03:29.400 go through the information. So the big thing that kind 0:03:29.400 --> 0:03:31.000 of stands out to me is that across the one 0:03:31.000 --> 0:03:34.160 point nine to five trillion asset mark, is that a 0:03:34.160 --> 0:03:35.080 big milestone? 0:03:35.280 --> 0:03:37.960 Well, the removal of the asset cap that is really 0:03:38.160 --> 0:03:40.880 I think that the big structural benefit. And I think 0:03:40.880 --> 0:03:43.280 that goes to the number that you're talking about, where 0:03:43.920 --> 0:03:45.280 you know, for years they had to. 0:03:45.200 --> 0:03:46.520 Limit their balance sheet growth. 0:03:46.560 --> 0:03:48.720 They finally got the go ahead that you know, we 0:03:48.760 --> 0:03:51.000 don't have to be so concerned about what that exact 0:03:51.120 --> 0:03:51.720 number is. 0:03:52.320 --> 0:03:54.560 I think the stock has really. 0:03:55.800 --> 0:03:59.600 Priced in a lot of the optimism around getting that 0:03:59.720 --> 0:04:03.280 ass cap remove. I mean basically has been you know, 0:04:03.440 --> 0:04:06.480 a huge gainer since the US election. I think the 0:04:06.560 --> 0:04:12.240 shares are responding today to the lower debt interest income outlook, 0:04:12.280 --> 0:04:13.760 and I think there's a couple of things there. 0:04:13.800 --> 0:04:17.000 The core net interest income, that's what people focus. 0:04:16.720 --> 0:04:20.680 On, right because the income that you get from trading 0:04:21.080 --> 0:04:24.760 generally has an offset to fees. But if you're just 0:04:24.800 --> 0:04:27.520 focusing on top on, you're just focusing on that number. 0:04:27.640 --> 0:04:29.400 People are disappointed in that outlook. 0:04:29.440 --> 0:04:30.080 For Welsbargo. 0:04:31.160 --> 0:04:33.960 What are you hearing from these banks today and over 0:04:33.960 --> 0:04:36.360 the coming days about loan growth because it seems like 0:04:36.400 --> 0:04:40.560 what the yield curve steepening, it's a good time to 0:04:40.600 --> 0:04:43.120 be making loans. How's the demand out there? Because only 0:04:43.160 --> 0:04:44.440 hear about is private credit here? 0:04:44.520 --> 0:04:46.280 Private credit there? How about the banks? 0:04:46.520 --> 0:04:48.800 I mean, we are we did see like things a 0:04:48.839 --> 0:04:51.040 little bit better. I would say that, you know, the 0:04:51.600 --> 0:04:55.159 grow loan growth is still a bit modest, but the 0:04:55.279 --> 0:04:59.159 expectation in terms of reduced risk to the economy is 0:04:59.200 --> 0:05:02.679 really a positive these banks going into the second half, 0:05:02.920 --> 0:05:06.839 and so I think there's there's certainly room for improvement 0:05:06.960 --> 0:05:07.840 in the loan growth. 0:05:08.240 --> 0:05:09.560 But I think things were fine. 0:05:09.920 --> 0:05:13.080 Well, there's been the loosening and regulations capital requirements for 0:05:13.120 --> 0:05:15.120 the banks. I mean, did this show up in the 0:05:15.200 --> 0:05:17.000 results or or when will it? 0:05:17.600 --> 0:05:20.200 I think that's that is something that is going to 0:05:20.360 --> 0:05:22.880 come over time. I mean, we did see some some 0:05:22.880 --> 0:05:27.000 some good buybacks at Wells Fargo for example, But I 0:05:27.000 --> 0:05:30.880 think the big news was the stress tests that we 0:05:30.920 --> 0:05:34.560 saw in June basically are signaling that their capital hurts 0:05:34.600 --> 0:05:40.159 are going lower. Further, a proposal out there that you 0:05:40.160 --> 0:05:42.880 know there we're going to have sort of average results 0:05:42.880 --> 0:05:46.520 over time, So that for this year means that the 0:05:46.520 --> 0:05:50.080 the you know, the decreases might not be as much 0:05:50.200 --> 0:05:51.680 and they might come a little bit later. But we 0:05:51.720 --> 0:05:54.240 think that's positive over time because what that means is 0:05:54.279 --> 0:05:57.039 that there'll be more stabilization and not sort of these 0:05:57.160 --> 0:06:00.640 ratios moving around a lot, so lots of outside excess 0:06:00.680 --> 0:06:04.480 capital at the banks. Even more as those ratios go lower, 0:06:04.640 --> 0:06:10.160 that means more buybacks, especially since we expect that any 0:06:10.160 --> 0:06:12.479 further regulations are not going to be as drastic. 0:06:13.160 --> 0:06:16.960 Goldman Sachs, Morgan Stanley they report tomorrow. I always love 0:06:17.000 --> 0:06:19.000 looking at, you know, the way you guys analyze kind 0:06:19.000 --> 0:06:21.279 of league tables and how people are doing competitively. Would 0:06:21.279 --> 0:06:22.720 expect to hear from those two investment banks. 0:06:22.760 --> 0:06:24.040 I mean, so we expect strength. 0:06:24.160 --> 0:06:27.000 I mean the results that we saw today in terms 0:06:27.080 --> 0:06:30.960 of fixed income trading better than expected, equities trading better 0:06:31.000 --> 0:06:34.440 than expected, fees almost across the board better than expected. 0:06:34.480 --> 0:06:37.200 We talked about the IPOs like that's a really good 0:06:37.279 --> 0:06:39.360 sign for Morgan. 0:06:39.040 --> 0:06:41.479 Stanley and Goldman, the M and A. 0:06:41.640 --> 0:06:44.400 You know, Goldman is typically an M and A leader there, 0:06:44.440 --> 0:06:47.320 although JP Morgan has really been catching up, So those 0:06:47.320 --> 0:06:51.440 are all very positive signals. I mean, twenty seven percent 0:06:51.520 --> 0:06:55.760 growth year every year in City Group's rates and currencies business. 0:06:55.960 --> 0:06:59.640 That is a really strong result. And you know Goldman 0:06:59.680 --> 0:07:01.720 and Morgan Stanley lead and the equities they earn the 0:07:01.760 --> 0:07:03.919 most from these businesses, so I think that you. 0:07:03.960 --> 0:07:07.720 Know, the bar is definitely hire for them tomorrow. All right, 0:07:07.800 --> 0:07:08.919 good stuff, appreciate it. 0:07:08.960 --> 0:07:12.240 Alison Williams, Senior anos Global Banks Asset Managers Bloomberg Intelligence. 0:07:12.240 --> 0:07:13.320 She's been doing it for a long time. 0:07:13.440 --> 0:07:16.440 She worked on the buyside at Morgan's Stanley Investment Management, 0:07:16.520 --> 0:07:20.320 investing in these big banks, so she knows what she's doing. 0:07:20.360 --> 0:07:22.960 She's got a great team there at Bloomberg Intelligence on 0:07:23.000 --> 0:07:26.160 a global basis looking at some of the big global 0:07:26.520 --> 0:07:29.400 banks around the world. So I appreciate getting a couple 0:07:29.440 --> 0:07:30.440 of minutes of her time. 0:07:32.040 --> 0:07:35.760 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:07:35.840 --> 0:07:39.200 weekdays at ten am Eastern on Applecarclay, and Android Auto 0:07:39.320 --> 0:07:42.400 with the Bloomberg Business App. Listen on demand wherever you 0:07:42.440 --> 0:07:45.360 get your podcasts, or watch us live on YouTube. 0:07:45.600 --> 0:07:49.120 We want to turn our attention to healthcare company Managed 0:07:49.160 --> 0:07:52.400 care Company, United Health Group It's a big company, two 0:07:52.440 --> 0:07:55.480 hundred and sixty seven billion dollars in market cap. Its 0:07:55.520 --> 0:07:57.360 sound forty percent year to date, but it's had a 0:07:57.440 --> 0:08:02.080 distinction of having I think sixty consecutive quarters that kind 0:08:02.080 --> 0:08:04.840 of beat earnings estimates out there. But I think the 0:08:04.840 --> 0:08:06.840 analysts are starting to take another look at some of 0:08:06.840 --> 0:08:09.240 those earnings numbers, and they're going to look at how 0:08:09.280 --> 0:08:11.400 this company put those numbers up. And I remember this 0:08:11.480 --> 0:08:14.320 kind of story back in the day from General Electric, 0:08:14.360 --> 0:08:16.520 where they would just beat by a couple of pennies 0:08:16.680 --> 0:08:17.800 every single quarter. 0:08:18.480 --> 0:08:19.480 But that turned out. 0:08:19.280 --> 0:08:21.120 To be a little bit of a mirage when you 0:08:21.160 --> 0:08:21.880 go back and look at. 0:08:21.760 --> 0:08:23.120 Some of the data there. 0:08:23.640 --> 0:08:28.000 Michelle Davis Joints is here, Bloomberg Senior Deals reporter, Michelle. 0:08:28.000 --> 0:08:30.280 What you find when you're looking at United Healthcare? How 0:08:30.280 --> 0:08:31.840 are they making some of those numbers recently? 0:08:32.000 --> 0:08:34.000 So, Yeah, as you mentioned, they had kind of a 0:08:34.040 --> 0:08:37.920 pristine record for more than sixty quarters. They beat estimates. 0:08:38.240 --> 0:08:40.880 Analysts love them, and at the end of last year 0:08:40.920 --> 0:08:43.280 that got a bit harder for them to keep up. 0:08:43.559 --> 0:08:46.480 You know, medical costs arising. The government's been cracking down 0:08:46.520 --> 0:08:49.439 on reiinbursements and that was eating into profits. And so 0:08:49.920 --> 0:08:52.080 what we reported is that at the end of last 0:08:52.160 --> 0:08:55.640 year they approached several private equity firms and asked them 0:08:55.720 --> 0:08:58.520 if they wanted to buy stakes off of them of 0:08:58.600 --> 0:09:02.400 their businesses, and a couple interesting things happen here. Not 0:09:02.440 --> 0:09:05.920 only did they quietly do this, but the deals were 0:09:05.960 --> 0:09:09.560 structured such that United Health can be forced to buy 0:09:09.559 --> 0:09:12.840 the businesses back down the road, so it's temporary in nature. 0:09:13.440 --> 0:09:17.440 And United booked the gains in an interesting place. They 0:09:17.480 --> 0:09:19.719 booked them as part of operating earnings, which is or 0:09:19.720 --> 0:09:22.920 adjusted earnings, which is normally where you look to see 0:09:23.000 --> 0:09:25.560 kind of how a business is doing, you know, excluding 0:09:25.559 --> 0:09:28.000 one off gains or one off events like this. And 0:09:28.040 --> 0:09:30.280 so it was just interesting to say, not only the 0:09:30.320 --> 0:09:33.080 fact that they stealthily did this, but where they put them, 0:09:33.120 --> 0:09:36.000 and without these gains they would have missed estimates and 0:09:36.160 --> 0:09:38.960 profit would have dropped in the last quarter of last year. 0:09:39.160 --> 0:09:41.880 So, as I'm going through this article, this certain quote 0:09:41.920 --> 0:09:43.720 stands out for me from an analyst that you spoke to. 0:09:43.720 --> 0:09:46.160 He said, if the company is manufacturing earnings by chopping 0:09:46.200 --> 0:09:49.280 up their furniture or selling their assets, that's not exactly 0:09:49.280 --> 0:09:52.400 a great business model. Okay, so is the risk that 0:09:52.440 --> 0:09:55.559 it might be kind of masking this weakness in the operations. 0:09:56.000 --> 0:09:56.800 That's the concern. 0:09:56.880 --> 0:09:59.520 And just to be clear, you know, there's nothing illegal 0:09:59.559 --> 0:10:02.040 about what they're doing, per se. You know, they disclosed 0:10:02.040 --> 0:10:04.400 that they did this, most people didn't see it. It 0:10:04.440 --> 0:10:06.480 was in a footnote in their ten K that kind 0:10:06.480 --> 0:10:08.640 of went under the radar, and there are no details 0:10:08.640 --> 0:10:11.160 about what exactly they sold. That's what we're trying to 0:10:11.280 --> 0:10:13.640 you know, report on here. But yeah, the concern is 0:10:13.640 --> 0:10:16.440 it clouds, you know, your ability to see how the 0:10:16.440 --> 0:10:19.760 business is actually performing. And we heard from sources that 0:10:20.040 --> 0:10:23.400 there's a culture inside United Health of you know, kind 0:10:23.400 --> 0:10:25.800 of there being this pressure to do whatever you can 0:10:25.920 --> 0:10:28.480 to meet targets every quarter. Yep. 0:10:29.040 --> 0:10:32.319 So again the stock it's a huge company, huge player 0:10:32.360 --> 0:10:35.400 in the managed care business. Stocks down forty percent. What's 0:10:35.440 --> 0:10:38.280 the underlying concern for investors out there? Do you think 0:10:38.320 --> 0:10:39.079 around this company? 0:10:39.920 --> 0:10:43.160 United Health has been dealing with a lot of things. 0:10:43.240 --> 0:10:46.280 I mean, even before we knew about this, there was 0:10:46.320 --> 0:10:49.040 obviously the tragedy of you know, one of their executives 0:10:49.080 --> 0:10:52.760 being murdered last year, and then you know, there was 0:10:52.800 --> 0:10:56.920 a Wall Street Journal investigation this year about potential medicare fraud, 0:10:57.000 --> 0:11:00.920 which they have denied. They also in the first quarter 0:11:01.000 --> 0:11:03.560 reported their first earnings miss in you know, more than 0:11:03.559 --> 0:11:06.360 sixty quarters, so that shoe finally dropped. They ousted their CEO. 0:11:06.440 --> 0:11:10.280 So investors are just concerned about the story here. You know, what, 0:11:10.280 --> 0:11:12.240 what is the United Health story? I think that's what 0:11:12.360 --> 0:11:13.240 the big concern is. 0:11:13.520 --> 0:11:16.480 So are there any other companies, like maybe other health 0:11:16.480 --> 0:11:19.480 companies or something like that where this same story that 0:11:19.520 --> 0:11:22.240 you've been talking about it kind of plays out? 0:11:23.040 --> 0:11:25.880 Not that we could find. It seems like United Health 0:11:25.960 --> 0:11:30.959 is really you know, unique in its ability and history 0:11:31.000 --> 0:11:35.800 of you know, really carefully managing it's reporting every quarter. 0:11:36.080 --> 0:11:38.720 So new management team here, what's kind of the focus 0:11:38.760 --> 0:11:40.560 now at the company? What's kind of the message to 0:11:40.880 --> 0:11:42.719 Wall Street about how they're I guess going to try 0:11:42.720 --> 0:11:43.560 to turn this thing around. 0:11:43.920 --> 0:11:47.600 So they brought in their former CEO, who is a 0:11:47.600 --> 0:11:50.360 accountant by by nature, and it seems like the market's 0:11:50.400 --> 0:11:53.720 pretty uh, they've been put at ease by him. The 0:11:53.840 --> 0:11:56.160 view or the hope from analysts is that the last 0:11:56.200 --> 0:11:57.920 quarter was kind of an anomaly and they were just 0:11:57.960 --> 0:11:59.880 bleeding out all the bad stuff and now they'll have 0:11:59.880 --> 0:12:02.520 a lower base to kind of beat off of They 0:12:02.559 --> 0:12:05.360 report earnings later this month, so we'll see, you know, 0:12:05.440 --> 0:12:07.920 how the business is actually doing. But the big surprise 0:12:07.960 --> 0:12:10.280 in the first quarter was that, you know, medical costs 0:12:10.280 --> 0:12:13.400 were a lot higher than they say they anticipated. That 0:12:13.520 --> 0:12:15.880 was confusing to people because their job is to anticipate that. 0:12:16.000 --> 0:12:18.760 But that's what I've when we're reporting on that story 0:12:18.760 --> 0:12:20.280 a couple of weeks ago, I said, Yeah, isn't that 0:12:20.320 --> 0:12:22.800 the job of the company to know, Hell, that's going 0:12:22.840 --> 0:12:22.959 to go? 0:12:22.960 --> 0:12:23.200 All right? 0:12:23.200 --> 0:12:25.560 I'm looking at the an R function on the Bloomberg 0:12:25.600 --> 0:12:28.360 kermninal that tracks analysts recommendations, and if you're not at 0:12:28.440 --> 0:12:31.280 health they're twenty one buys, six. 0:12:31.120 --> 0:12:32.920 Holds and two cells. 0:12:33.480 --> 0:12:36.679 So yeah, I think the streets still generally buying off 0:12:36.679 --> 0:12:39.199 on this maybe this turnaround story. But maybe we'll take 0:12:39.200 --> 0:12:41.679 a look at your story here today. Michelle Davis, thank 0:12:41.679 --> 0:12:43.960 you so much for joining us. Michelle Davis is a 0:12:44.000 --> 0:12:46.800 senior deals reporter for Bloomberg News. Joining us live here 0:12:46.800 --> 0:12:50.680 in our Bloomberg Interactive Brokers studio. But it's interesting to 0:12:50.679 --> 0:12:53.720 see on the healthcare space, and again I always come 0:12:53.760 --> 0:12:56.079 in here every Mondayly said, it's like there's an M 0:12:56.160 --> 0:12:58.920 and A deal coming out of the healthcare space, which 0:12:59.000 --> 0:13:02.440 keeps the likes of Michelle Davis busy on the deal front. 0:13:02.480 --> 0:13:04.480 But it's again, we see it time and time again 0:13:04.520 --> 0:13:06.240 in a healthcare space. If you can't come up with 0:13:06.280 --> 0:13:10.199 that next drug or that next you know, procedure. 0:13:09.760 --> 0:13:12.520 Whatever in your R and D lab, you got to 0:13:12.600 --> 0:13:12.920 join up. 0:13:12.960 --> 0:13:14.319 You got to go buy somebody. You know, you go 0:13:14.480 --> 0:13:17.559 go go buy somebody. And that's how that business has played. 0:13:19.480 --> 0:13:23.160 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:13:23.240 --> 0:13:26.640 weekdays at ten am Eastern on Applecarclay and Android Auto 0:13:26.760 --> 0:13:29.800 with the Bloomberg Business App. Listen on demand wherever you 0:13:29.840 --> 0:13:32.840 get your podcasts, or watch us live on YouTube. 0:13:33.640 --> 0:13:35.640 All right, Lisa Matteo, Paul Swhen you were live here 0:13:35.679 --> 0:13:38.360 in our Bloomberg Interactive Brokeer Studio streaming live on YouTube. 0:13:38.400 --> 0:13:42.440 So check us out there. You know, to an extent, 0:13:42.480 --> 0:13:45.360 I at any luck in meeting other people. It's been 0:13:45.400 --> 0:13:47.400 at a bar and no dating apps here. 0:13:47.559 --> 0:13:49.120 I know, I know, I met my husband at the 0:13:49.120 --> 0:13:52.880 grease trucks at Rutgers after who doesn't having burgers? 0:13:52.920 --> 0:13:53.439 There you go. 0:13:53.880 --> 0:13:58.319 Now, dating apps must evolve, as gen Z redefines romance. 0:13:58.360 --> 0:14:00.720 That's according to it bloom We're going to tell survey 0:14:01.080 --> 0:14:03.080 We're going there, folks, We're going down that rabbit hole. 0:14:03.200 --> 0:14:06.160 Nicole Desuza joins its Internet and software equity analysts for 0:14:06.200 --> 0:14:10.360 Bloomberg Intelligence. Nicole, what's your survey? What are the questions 0:14:10.360 --> 0:14:11.640 that asked and what did you find? 0:14:12.280 --> 0:14:15.360 Yeah, so we have Bloomberg Intelligence conducted the survey to 0:14:15.520 --> 0:14:19.440 better understand how people are navigating dating, how they use 0:14:19.520 --> 0:14:21.800 dating apps, and then also how they feel about AI 0:14:21.960 --> 0:14:25.960 within dating apps. And so some really interesting findings. First 0:14:26.160 --> 0:14:29.680 that you know, specifically, gen Z tends to be single 0:14:29.840 --> 0:14:30.640 but not dating. 0:14:30.960 --> 0:14:33.280 Gen zs what age again, sixteen to twenty eight? 0:14:33.440 --> 0:14:36.160 Sixteen to twenty all right, so yay single, two of 0:14:36.200 --> 0:14:39.080 my four into that one, Okay, And so they're not 0:14:39.160 --> 0:14:40.200 using the apps. 0:14:39.960 --> 0:14:44.000 They're not even dating, single and not dating. So this 0:14:44.200 --> 0:14:47.120 is I mean, there's a few reasons. Studies have kind 0:14:47.120 --> 0:14:49.800 of shown they do have higher rates of loneliness, but 0:14:49.920 --> 0:14:54.520 they are also prioritizing independence. They are also you know, 0:14:54.520 --> 0:14:58.520 feeling a reduced stigma around being single. So it could 0:14:58.560 --> 0:15:00.640 really change dating patterns generationally. 0:15:00.800 --> 0:15:02.080 I can kind of say my son was on a 0:15:02.160 --> 0:15:04.080 dating app and then he stopped because he got tired 0:15:04.120 --> 0:15:06.160 of it and it just and he's in that gen 0:15:06.240 --> 0:15:09.800 Z kind of group and they're not going to pay 0:15:09.800 --> 0:15:13.280 for them too. So how does that change for these 0:15:13.480 --> 0:15:15.800 different you know, dating apps out there? How do they 0:15:15.840 --> 0:15:16.800 have to change their approach? 0:15:17.440 --> 0:15:21.720 So right now a lot of what we're seeing from 0:15:21.760 --> 0:15:24.240 gen Z is that even though they are dating less, 0:15:24.280 --> 0:15:27.040 they are looking for long term relationships. Those that are dating, 0:15:27.240 --> 0:15:30.560 they are looking to form meaningful connections. So, you know, 0:15:30.600 --> 0:15:33.040 some of the products we've seen from these dating apps 0:15:33.040 --> 0:15:35.280 that really introduce AI are more around how to create 0:15:35.320 --> 0:15:38.080 a profile, how to make it easier to talk to people, 0:15:38.200 --> 0:15:40.680 you know, using AI to generate prompts that might not 0:15:40.720 --> 0:15:43.440 necessarily you know, correlate with what gen Z is looking 0:15:43.440 --> 0:15:45.200 for in terms of forming a meaningful connection. 0:15:46.080 --> 0:15:48.640 I'll tell you Lisa go to the Parker House and 0:15:48.680 --> 0:15:52.760 seeing her in New Jersey on a summer Saturday, thousands 0:15:52.840 --> 0:15:57.360 and thousands of kids of gen Z type are there 0:15:57.760 --> 0:16:00.359 yet like four o'clock in afternoon, they're not on the 0:16:00.360 --> 0:16:03.440 They're all made up, dressed to the nines. I think 0:16:03.480 --> 0:16:05.640 they're looking too to meet somebody. 0:16:05.680 --> 0:16:08.240 Right now, I've been here, I had to wait on dress. 0:16:08.560 --> 0:16:11.040 I mean, I don't know what's going on. How about millennials? 0:16:11.080 --> 0:16:12.400 How did they fare? 0:16:12.760 --> 0:16:15.640 So millennials are they kind of came of age during 0:16:15.640 --> 0:16:17.520 the time of dating apps, so a lot of dating 0:16:17.520 --> 0:16:21.800 apps are really created to target dating patterns of millennials. 0:16:21.880 --> 0:16:24.960 So millennials have a more favorable relationship with dating apps, 0:16:24.960 --> 0:16:28.480 and they also are much more like comfortable with AI 0:16:28.680 --> 0:16:31.800 in dating apps versus gen Z, which was surprising to us. 0:16:32.120 --> 0:16:35.800 Now what about Okay, people always forget about gen X, the. 0:16:35.800 --> 0:16:36.840 Gen X folks. 0:16:37.880 --> 0:16:40.400 Yeah, so what about gen X? And then you know 0:16:40.600 --> 0:16:43.600 my my mom, you know, single, like she wants to 0:16:43.600 --> 0:16:46.720 find out about these apps. I'm telling you, what about 0:16:46.720 --> 0:16:50.040 the older generation? They're on dating apps, so they're on it. 0:16:50.120 --> 0:16:52.520 There are Yeah, there are a lot of gen X 0:16:52.560 --> 0:16:55.360 and baby boomers on dating apps, and there are a 0:16:55.360 --> 0:16:57.560 wide variety of dating apps to kind of address different 0:16:57.560 --> 0:16:59.920 age groups, different you know, things that people are looking for. 0:17:00.160 --> 0:17:01.640 So they're they're available. 0:17:02.000 --> 0:17:05.119 How does AI have to ask the AI questions? 0:17:05.680 --> 0:17:07.679 Because we had a guest on earlier about it. I 0:17:07.720 --> 0:17:09.760 walked out of there thinking AI is going to take 0:17:09.760 --> 0:17:12.880 over Wall Street? How about AI and dating apps? That 0:17:13.600 --> 0:17:16.880 I would think could be helpful to better select somebody 0:17:16.880 --> 0:17:18.480 who might be a good match or something. 0:17:18.800 --> 0:17:21.080 So we've seen dating app companies roll out a lot 0:17:21.119 --> 0:17:25.120 of AI products. I would say, right now, it seems 0:17:25.160 --> 0:17:27.360 at least based on our survey, that they haven't been 0:17:27.480 --> 0:17:30.880 that well received. It seems like people don't necessarily need 0:17:30.920 --> 0:17:33.640 AI to build a better profile, they don't need AI 0:17:33.720 --> 0:17:36.399 to help them engage in conversation. I think where it 0:17:36.440 --> 0:17:39.120 has been helpful is user safety, so to weed out 0:17:39.160 --> 0:17:42.760 profiles that are fake or you know, potentially send people 0:17:42.800 --> 0:17:46.160 who are sending harmful messages, and that is a common complaint. 0:17:46.320 --> 0:17:50.320 But as of right now, it doesn't seem that you know, 0:17:50.720 --> 0:17:53.520 at least gen Z and even some millennials are really 0:17:54.480 --> 0:17:56.720 really adopting these new AI products. 0:17:56.840 --> 0:17:59.440 So and there are certain a dating apps that are 0:17:59.440 --> 0:18:01.320 more po popular than others, I mean, which are the 0:18:01.359 --> 0:18:02.160 hot ones right now? 0:18:02.560 --> 0:18:06.680 So right now, at least by users, Tinder has by 0:18:06.680 --> 0:18:09.320 far the most users that's owned by match Group. And 0:18:09.359 --> 0:18:11.879 then Hinge is actually one of the few dating apps 0:18:11.880 --> 0:18:15.080 that is continuing to grow users, and that's probably because 0:18:15.119 --> 0:18:17.160 Hinge focuses a little bit more on kind of long 0:18:17.240 --> 0:18:21.000 term relationships, building meaningful connections. Tinder still has a reputation 0:18:21.119 --> 0:18:22.280 of kind of a hookup app. 0:18:22.400 --> 0:18:26.000 Yes, which one is that? 0:18:25.480 --> 0:18:26.919 Yeah, that's how my son was on. 0:18:31.040 --> 0:18:35.360 And I mean I'm looking at Nicole's research report. 0:18:35.600 --> 0:18:37.360 I mean she's got graphs here. 0:18:37.200 --> 0:18:39.639 Of like I'm in a monogamous relation, I'm single and 0:18:39.720 --> 0:18:42.359 currently dating. I'm in an open relationship, single but not dating, 0:18:42.520 --> 0:18:46.159 in a casual relationship by demo, by baby boomers, gen 0:18:46.320 --> 0:18:49.800 X millennials. I mean, this is a lot of research here, 0:18:49.880 --> 0:18:52.720 dudes on dating. I mean, go to a bar, you know, 0:18:52.880 --> 0:18:55.480 have a cocktail, relax. I don't know, I don't know. 0:18:55.520 --> 0:18:57.200 It's good stuff here. But Nicole, thanks so much for 0:18:57.280 --> 0:18:57.840 joining us. 0:18:57.840 --> 0:19:01.639 Great research again at Bi's cut and research Bloomberg Intelligence 0:19:02.520 --> 0:19:05.320 using some survey data here to go out and take 0:19:05.320 --> 0:19:08.280 a look at how some of these apps are working 0:19:08.280 --> 0:19:08.520 out there. 0:19:08.560 --> 0:19:09.280