1
00:00:00,600 --> 00:00:07,240
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:09,960 --> 00:00:13,840
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

3
00:00:13,920 --> 00:00:17,000
Speaker 2: weekdays at ten am Eastern on Apple, Cardplay and Android

4
00:00:17,000 --> 00:00:20,120
Speaker 2: Auto with the Bloomberg Business App. Listen on demand wherever

5
00:00:20,160 --> 00:00:23,360
Speaker 2: you get your podcasts, or watch us live on YouTube.

6
00:00:25,079 --> 00:00:29,200
Speaker 3: So Southwest, so take our LUV is down fourteen percent,

7
00:00:29,400 --> 00:00:32,760
Speaker 3: So the company plans to cut capacity this year, halt

8
00:00:32,800 --> 00:00:35,640
Speaker 3: most hiring and review it spending plans and response to

9
00:00:35,880 --> 00:00:40,559
Speaker 3: reduced aircraft deliveries from Boeing. Here's my question. Is this

10
00:00:40,600 --> 00:00:42,440
Speaker 3: going to be as simple over the next year? All

11
00:00:42,479 --> 00:00:44,040
Speaker 3: the airlines are going to raise their fees and they're

12
00:00:44,040 --> 00:00:45,479
Speaker 3: going to say it's not our fall, we gotta cut

13
00:00:45,520 --> 00:00:48,199
Speaker 3: capacity because of Boeing. I wonder if that's what we're

14
00:00:48,240 --> 00:00:51,159
Speaker 3: gonna hear well? Joining us now is George ferguson Bloomberg

15
00:00:51,200 --> 00:00:54,840
Speaker 3: Intelligence and your Aerospace, Defense and airlines analyst, George, is

16
00:00:54,840 --> 00:00:56,840
Speaker 3: that the thing? Let's just blame Boeing for the things

17
00:00:56,880 --> 00:00:59,720
Speaker 3: and then raise our prices well.

18
00:00:59,560 --> 00:01:02,400
Speaker 4: So not everyone will be able to blame Boeing, right,

19
00:01:02,480 --> 00:01:06,119
Speaker 4: So that there are airlines that are operating airbus aircraft

20
00:01:06,600 --> 00:01:12,039
Speaker 4: companies like you know, Delta Jet Blue Frontier spirit. They

21
00:01:12,040 --> 00:01:15,119
Speaker 4: won't have the problems that that airlines that are being

22
00:01:15,120 --> 00:01:17,679
Speaker 4: supplied by Boeing will have, and they'll look to put

23
00:01:17,720 --> 00:01:20,440
Speaker 4: as much capacity in the marketplace to take advantage of

24
00:01:20,480 --> 00:01:23,679
Speaker 4: the fact that the airlines that are flying Boeing product

25
00:01:24,080 --> 00:01:26,520
Speaker 4: aren't able to get all of the flying done that

26
00:01:26,520 --> 00:01:29,640
Speaker 4: they want to do. You know, the truth too here

27
00:01:29,680 --> 00:01:33,200
Speaker 4: is I think that you know, the Boeing challenges will

28
00:01:33,200 --> 00:01:36,480
Speaker 4: provide a little bit of firmness to the marketplace. But

29
00:01:36,600 --> 00:01:38,800
Speaker 4: I still see I think a US airline market that

30
00:01:38,840 --> 00:01:43,200
Speaker 4: looks like it's got a it has plenty of capacity

31
00:01:43,280 --> 00:01:46,240
Speaker 4: in it, and I still think fares.

32
00:01:45,840 --> 00:01:47,840
Speaker 5: Are flatish to maybe.

33
00:01:47,480 --> 00:01:52,360
Speaker 4: Going down for the year unless Boeing really curtails their

34
00:01:52,400 --> 00:01:53,280
Speaker 4: deliveries for the year.

35
00:01:53,880 --> 00:01:56,880
Speaker 1: Yeah, it's interesting because if I read this issue about

36
00:01:56,880 --> 00:02:00,000
Speaker 1: Boeing and I read this cutting capacity, but my first

37
00:02:00,080 --> 00:02:02,040
Speaker 1: thought is going to be that that means higher prices

38
00:02:02,080 --> 00:02:05,000
Speaker 1: for consumers. So what accounts for the difference there?

39
00:02:06,320 --> 00:02:08,440
Speaker 4: Well, first of all, I think the US market already

40
00:02:08,440 --> 00:02:12,480
Speaker 4: had sufficient capacity last year, right, I think we're bouncing

41
00:02:12,520 --> 00:02:13,560
Speaker 4: back from a pandemic.

42
00:02:14,360 --> 00:02:16,359
Speaker 5: We saw a bunch of sort of revenge.

43
00:02:15,960 --> 00:02:19,120
Speaker 4: Travel, you know, earlier in this in this bounce back,

44
00:02:19,840 --> 00:02:22,320
Speaker 4: I don't and that was very leisure driven. I don't

45
00:02:22,320 --> 00:02:24,239
Speaker 4: think we're going to see as much of the leisure

46
00:02:24,360 --> 00:02:27,160
Speaker 4: driven travel this year, not that I got to pay

47
00:02:27,200 --> 00:02:29,720
Speaker 4: whatever it's going to take to get down to Disney,

48
00:02:29,960 --> 00:02:33,639
Speaker 4: so you'll see it maybe a small a smaller growth

49
00:02:33,639 --> 00:02:36,919
Speaker 4: amount in leisure, and business isn't fully back.

50
00:02:36,960 --> 00:02:40,200
Speaker 5: We know that. So we've got twenty nineteen more.

51
00:02:40,040 --> 00:02:43,160
Speaker 4: Than twenty nineteen levels of capacity in the marketplace, less

52
00:02:43,240 --> 00:02:47,520
Speaker 4: business and maybe a little more leisure. So when I

53
00:02:47,560 --> 00:02:49,480
Speaker 4: add that all up again, I kind of see a

54
00:02:49,520 --> 00:02:52,520
Speaker 4: market that looks like it's got plenty of capacity. If

55
00:02:52,600 --> 00:02:55,760
Speaker 4: you look at the guidance that Southwest gave on revenue

56
00:02:55,800 --> 00:03:00,720
Speaker 4: per available seat mile, they lowered that at this discussion,

57
00:03:01,720 --> 00:03:04,000
Speaker 4: so tells me that the market is weaker. You know,

58
00:03:04,040 --> 00:03:06,840
Speaker 4: at this guide's point, the market is weaker than they

59
00:03:06,880 --> 00:03:07,680
Speaker 4: initially thought.

60
00:03:07,960 --> 00:03:10,080
Speaker 5: And at the same time, fuel prices were a little

61
00:03:10,120 --> 00:03:12,000
Speaker 5: bit higher. So what it looks like to.

62
00:03:11,960 --> 00:03:14,400
Speaker 4: Me is Southwest numbers are going to come in lighter

63
00:03:14,440 --> 00:03:16,639
Speaker 4: than we expected in one queue.

64
00:03:17,240 --> 00:03:18,640
Speaker 5: That's not a super healthy market.

65
00:03:18,639 --> 00:03:21,359
Speaker 4: That's on a market that's got so much constraint that

66
00:03:21,400 --> 00:03:23,840
Speaker 4: they can price whatever they want to for airline tickets

67
00:03:24,040 --> 00:03:25,239
Speaker 4: and make lots of profits.

68
00:03:25,320 --> 00:03:28,079
Speaker 3: Okay, so it's a trifecta. Like they do have a

69
00:03:28,120 --> 00:03:30,840
Speaker 3: specific Boeing issue and the fuel prices and then the

70
00:03:30,840 --> 00:03:35,360
Speaker 3: broader softer market that's a general airline issue. United also

71
00:03:36,280 --> 00:03:38,880
Speaker 3: told Boeing to stop building seven thirty seven Max ten

72
00:03:38,960 --> 00:03:42,280
Speaker 3: jets for the carrier. Okay, that sounds dramatic and bad.

73
00:03:42,280 --> 00:03:43,400
Speaker 3: What does that actually mean?

74
00:03:44,520 --> 00:03:46,800
Speaker 4: You know, I think it sounds like Scott Kirby, the

75
00:03:46,840 --> 00:03:48,960
Speaker 4: CEO of United, is just getting real about what he

76
00:03:49,000 --> 00:03:51,280
Speaker 4: thinks Boeing can deliver in the near term. I guess

77
00:03:51,360 --> 00:03:53,440
Speaker 4: you know, if you sit around and you kind of

78
00:03:53,520 --> 00:03:55,080
Speaker 4: hope and hope and hope they're going to get the

79
00:03:55,080 --> 00:03:58,680
Speaker 4: Max ten certified, and you wait on those deliveries based

80
00:03:58,720 --> 00:04:01,200
Speaker 4: on that hope, and the certificatetion keeps getting pushed out

81
00:04:01,200 --> 00:04:04,960
Speaker 4: and it's really hard to plan. So Scott Kirby said, hey, look,

82
00:04:05,320 --> 00:04:07,920
Speaker 4: stop worrying about the Dash ten. Just bring me dashed on.

83
00:04:08,040 --> 00:04:10,720
Speaker 4: He was saying, look, I just want airplanes. Bring me airplanes.

84
00:04:11,000 --> 00:04:13,400
Speaker 4: I think the market's generally going to be strong for me.

85
00:04:13,920 --> 00:04:16,200
Speaker 4: He's in the premium segment too, right, which I think

86
00:04:16,240 --> 00:04:19,039
Speaker 4: from the guidance we saw today from airlines, premium is

87
00:04:19,040 --> 00:04:22,919
Speaker 4: holding up better. So he wants airplanes. He wants to

88
00:04:22,920 --> 00:04:24,840
Speaker 4: go out and find some of those three twenty one

89
00:04:24,920 --> 00:04:29,040
Speaker 4: larger scale from Airbus. Again, I think it's okay. I

90
00:04:29,040 --> 00:04:31,599
Speaker 4: think Scott's being a realist. There's a lot of challenges

91
00:04:31,680 --> 00:04:34,159
Speaker 4: right now at Boeing, and it feels to me like

92
00:04:34,240 --> 00:04:37,200
Speaker 4: certification for the DASH seven and the Dash ten, you know,

93
00:04:37,240 --> 00:04:39,040
Speaker 4: the DASH ten being the biggest variant of.

94
00:04:39,000 --> 00:04:39,960
Speaker 5: The seven thirty seven.

95
00:04:40,560 --> 00:04:42,719
Speaker 4: There's just almost no way they're going to get pushed

96
00:04:42,720 --> 00:04:45,599
Speaker 4: out longer than what we expect given the problems in

97
00:04:45,640 --> 00:04:47,120
Speaker 4: manufacturing and Boeing right now.

98
00:04:47,680 --> 00:04:49,599
Speaker 1: And what is that? So is there any redacross that

99
00:04:49,600 --> 00:04:51,279
Speaker 1: we should start thinking about for Airbus?

100
00:04:52,680 --> 00:04:56,280
Speaker 4: Well, I mean, here's the challenge of this industry right

101
00:04:56,720 --> 00:04:59,000
Speaker 4: the readacross is look, Airbus ought to be able to

102
00:04:59,040 --> 00:05:00,240
Speaker 4: go get a lot more.

103
00:05:00,120 --> 00:05:02,000
Speaker 5: Orders for its Airbus A three twenty one.

104
00:05:02,560 --> 00:05:05,279
Speaker 4: But the problem Scott has, and he's a really good

105
00:05:05,279 --> 00:05:08,240
Speaker 4: customer and they're working hard to find him slots, is

106
00:05:08,240 --> 00:05:10,919
Speaker 4: that they probably can't get him three twenty one's for

107
00:05:11,120 --> 00:05:13,800
Speaker 4: four or five years from now. Wow, So that doesn't

108
00:05:13,839 --> 00:05:17,440
Speaker 4: fix his near term problems, and customers that would be

109
00:05:17,520 --> 00:05:20,640
Speaker 4: smaller than United have an even larger problem because the air

110
00:05:20,600 --> 00:05:22,000
Speaker 4: bus isn't going to work as hard to try to

111
00:05:22,000 --> 00:05:26,600
Speaker 4: get him into the delivery cadence. The industry is definitely

112
00:05:26,680 --> 00:05:29,360
Speaker 4: is operating at sort of max capacity.

113
00:05:29,400 --> 00:05:29,640
Speaker 2: Now.

114
00:05:30,040 --> 00:05:33,479
Speaker 4: It's pushing its supply chains to do better, but we

115
00:05:33,600 --> 00:05:36,680
Speaker 4: just don't see increases of you know, build rates kind

116
00:05:36,720 --> 00:05:39,360
Speaker 4: of more than ten percent per year at best.

117
00:05:39,680 --> 00:05:41,840
Speaker 5: It's really hard to bring up that supply chain.

118
00:05:42,400 --> 00:05:45,920
Speaker 4: So I think the duopoly means that Airbus can't really

119
00:05:45,960 --> 00:05:47,039
Speaker 4: capitalize that well.

120
00:05:46,880 --> 00:05:50,039
Speaker 3: On this just anecdotally. I flew to Houston for like

121
00:05:50,040 --> 00:05:52,400
Speaker 3: a day last week, and I flew there on a

122
00:05:52,480 --> 00:05:55,400
Speaker 3: new Boeing jet for United and back on an old

123
00:05:55,440 --> 00:05:59,919
Speaker 3: one and a man that was different, a very different experience.

124
00:06:00,120 --> 00:06:02,200
Speaker 6: Bring a wrench with you, Okay.

125
00:06:02,240 --> 00:06:03,880
Speaker 3: I did text my husband and I was like, hey,

126
00:06:03,960 --> 00:06:06,400
Speaker 3: so I'm on this Boeing plane just in case something happens.

127
00:06:07,480 --> 00:06:09,720
Speaker 3: What did I know? I'm like that, what is the

128
00:06:09,720 --> 00:06:12,520
Speaker 3: floor though? George? For Boeing, I mean the stock is

129
00:06:12,520 --> 00:06:14,919
Speaker 3: literally dropping like a knife. Here are we looking at

130
00:06:14,960 --> 00:06:17,479
Speaker 3: the October low? Is what we have to be watching, Like,

131
00:06:17,520 --> 00:06:20,159
Speaker 3: where's the support and where is the support gonna actually

132
00:06:20,160 --> 00:06:20,719
Speaker 3: come from?

133
00:06:21,400 --> 00:06:23,920
Speaker 4: So like it's you know, Boeing has been through some

134
00:06:24,000 --> 00:06:27,120
Speaker 4: real troubles and the bad news sort of keeps coming.

135
00:06:28,680 --> 00:06:30,960
Speaker 4: Like it's hard to say what a price would be

136
00:06:31,040 --> 00:06:33,760
Speaker 4: on that floor. I will say that I think they're

137
00:06:34,200 --> 00:06:38,080
Speaker 4: purchase a Spirit that they've proposed could start to put

138
00:06:38,120 --> 00:06:41,599
Speaker 4: a floor underneath their problems. I see that direct line

139
00:06:41,839 --> 00:06:46,360
Speaker 4: of management from the Spirit floor in Wichita, Kansas, all

140
00:06:46,400 --> 00:06:49,159
Speaker 4: the way up to Boeing in rent and Washington as

141
00:06:49,240 --> 00:06:54,120
Speaker 4: being the ultimate solution to improving quality, you know, oversight.

142
00:06:54,680 --> 00:06:57,680
Speaker 4: So I think we have to watch that development closely.

143
00:06:58,360 --> 00:07:01,080
Speaker 4: It's going to require getting some of the Airbus business

144
00:07:01,240 --> 00:07:05,240
Speaker 4: outside of Spirit, because Spirit builds products for the A

145
00:07:05,360 --> 00:07:08,120
Speaker 4: three twenty for Airbus and the A three fifty. I

146
00:07:08,120 --> 00:07:11,000
Speaker 4: don't think you want that inside Boeing. So this is

147
00:07:11,000 --> 00:07:15,040
Speaker 4: going to be a complicated procedure, a complicated purchase. But

148
00:07:15,120 --> 00:07:18,080
Speaker 4: I think that's the beginning of Boeing really getting to

149
00:07:18,200 --> 00:07:23,000
Speaker 4: stabilize their builds, improve quality, and get and that's going

150
00:07:23,080 --> 00:07:26,440
Speaker 4: to make the fa free up FAA time and open

151
00:07:26,480 --> 00:07:30,720
Speaker 4: the FAA's mind up about certifying Max seven and ten.

152
00:07:31,160 --> 00:07:32,760
Speaker 4: So I think that that's the beginning of it.

153
00:07:33,480 --> 00:07:35,840
Speaker 1: I mean, if you think about what the challenges are

154
00:07:35,840 --> 00:07:38,480
Speaker 1: facing Boeing, is there much of a difference to the

155
00:07:38,520 --> 00:07:40,800
Speaker 1: company if we get a soft economic landing, a hard

156
00:07:40,840 --> 00:07:42,360
Speaker 1: economic landing, or no landing.

157
00:07:43,240 --> 00:07:45,920
Speaker 5: Honestly, I think for all the air framers there isn't. Right.

158
00:07:46,000 --> 00:07:50,920
Speaker 4: So again, Airbus and Boeing building aircraft at rates much

159
00:07:51,000 --> 00:07:53,960
Speaker 4: lower than their customers are demanding right now. You know,

160
00:07:54,000 --> 00:07:56,080
Speaker 4: customers like Scott Kirby want to come in and buy

161
00:07:56,120 --> 00:07:58,800
Speaker 4: a three twenty one's next three or four years.

162
00:07:58,640 --> 00:08:00,960
Speaker 5: Can't get them. So I think even in a.

163
00:08:00,880 --> 00:08:06,040
Speaker 4: Hard landing, soft landing, no recession environment, these folks just

164
00:08:06,160 --> 00:08:09,560
Speaker 4: keep working on making the supply chain better, so the

165
00:08:09,560 --> 00:08:12,040
Speaker 4: supply chain can put more of the components on the

166
00:08:12,040 --> 00:08:14,920
Speaker 4: factory floor and build more aircraft.

167
00:08:14,960 --> 00:08:15,720
Speaker 5: Although I would.

168
00:08:15,520 --> 00:08:19,480
Speaker 4: Say maybe in a harder economic landing it might free

169
00:08:19,560 --> 00:08:22,240
Speaker 4: up some of the labor that they need and keep

170
00:08:22,280 --> 00:08:25,560
Speaker 4: some of the labor more stable at their suppliers. And

171
00:08:25,600 --> 00:08:29,320
Speaker 4: that's really the challenge right here, is labor at the suppliers.

172
00:08:29,720 --> 00:08:32,920
Speaker 4: Stabilizing it. You need smart people there who've been doing

173
00:08:33,160 --> 00:08:35,080
Speaker 4: the process for a long time, so they do it

174
00:08:35,160 --> 00:08:38,040
Speaker 4: right all the time, know the right processes and procedures.

175
00:08:38,280 --> 00:08:40,800
Speaker 3: Hey, George, if anyone listens to the show or watches

176
00:08:40,840 --> 00:08:43,480
Speaker 3: TV with me, I am a deal person. I like

177
00:08:43,520 --> 00:08:45,600
Speaker 3: me deals. I like all the deals, whatever the deals.

178
00:08:46,200 --> 00:08:48,840
Speaker 3: If I want to look for deals for flying, where

179
00:08:48,880 --> 00:08:50,360
Speaker 3: am I going to get that? Like, is it literally

180
00:08:50,400 --> 00:08:54,280
Speaker 3: going to have to be sort of regional companies exposed

181
00:08:54,280 --> 00:08:56,320
Speaker 3: to Boeing? Am I going to have to get that

182
00:08:56,400 --> 00:08:57,240
Speaker 3: granular here?

183
00:08:58,640 --> 00:09:01,640
Speaker 5: Well? No, right way? I mean airline seats.

184
00:09:01,640 --> 00:09:04,320
Speaker 4: I mean that all the CEOs would complain that I

185
00:09:04,360 --> 00:09:07,240
Speaker 4: say this, but I really find them largely as commodities, right,

186
00:09:07,320 --> 00:09:09,719
Speaker 4: and so if you're going to find lower fares, I

187
00:09:09,760 --> 00:09:12,720
Speaker 4: think you're typically going to find them lower across the

188
00:09:12,760 --> 00:09:15,520
Speaker 4: board we are seeing. You know, it does seem to

189
00:09:15,559 --> 00:09:20,479
Speaker 4: me that non premium leisure is an area of especially

190
00:09:20,480 --> 00:09:23,880
Speaker 4: good you know, a lot of seats available, especially good prices.

191
00:09:24,679 --> 00:09:27,040
Speaker 4: Maybe and maybe the further down the curve you go

192
00:09:27,080 --> 00:09:28,439
Speaker 4: on it, you may not want to go that far

193
00:09:28,960 --> 00:09:32,400
Speaker 4: down to the spirits and frontiers would even be some

194
00:09:32,440 --> 00:09:35,199
Speaker 4: of the best deals. But you know, Southwest guidance today

195
00:09:35,280 --> 00:09:39,080
Speaker 4: means that even in a nicer, you know, a non

196
00:09:39,120 --> 00:09:42,520
Speaker 4: premium product, they're still having challenges getting fair and so

197
00:09:42,559 --> 00:09:43,400
Speaker 4: I think that's important.

198
00:09:43,440 --> 00:09:44,440
Speaker 5: That's good.

199
00:09:44,720 --> 00:09:48,400
Speaker 3: Oh man, fine, George ferguson Boomberg Intelligence and your aerospace,

200
00:09:48,440 --> 00:09:50,839
Speaker 3: defense and airlines analysts. And let's be fair. I mean,

201
00:09:50,920 --> 00:09:52,280
Speaker 3: like I want to sit in the front of the plane.

202
00:09:53,160 --> 00:09:53,760
Speaker 1: Who doesn't.

203
00:09:53,920 --> 00:09:55,880
Speaker 6: I mean, you know you want to pay, you want

204
00:09:55,920 --> 00:09:57,960
Speaker 6: first class, but you want to pay Coach.

205
00:09:57,800 --> 00:09:58,960
Speaker 3: Boom He gets me.

206
00:10:00,920 --> 00:10:04,800
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

207
00:10:04,880 --> 00:10:08,400
Speaker 2: weekdays at ten am Eastern on applecar Play and Android

208
00:10:08,440 --> 00:10:11,199
Speaker 2: Auto with the Bloomberg Business Act. You can also listen

209
00:10:11,320 --> 00:10:14,400
Speaker 2: live on Amazon Alexa from our flagship New York station,

210
00:10:14,760 --> 00:10:17,520
Speaker 2: just say Alexa Play. Bloomberg eleven thirty.

211
00:10:19,120 --> 00:10:22,080
Speaker 3: Small business optimism dropped nine month low. There's that. Also

212
00:10:22,240 --> 00:10:25,120
Speaker 3: a CPI month on month coming in at four tens

213
00:10:25,120 --> 00:10:28,760
Speaker 3: of one percent for February, so slightly higher sequentially. For

214
00:10:28,840 --> 00:10:31,079
Speaker 3: the year, you're looking at three point two percent, also

215
00:10:31,160 --> 00:10:36,040
Speaker 3: higher sequentially as well. So warmer wasn't hot, but did

216
00:10:36,080 --> 00:10:38,800
Speaker 3: prove that January maybe wasn't a blip. I was calling

217
00:10:38,840 --> 00:10:41,240
Speaker 3: it warm. Let's get the take now from Jeffrey Cleveland,

218
00:10:41,440 --> 00:10:43,920
Speaker 3: a chief economist over at Peydon and Regal. He is

219
00:10:43,920 --> 00:10:47,320
Speaker 3: standing by with us for more, Jeffrey, is warmer the

220
00:10:47,400 --> 00:10:49,679
Speaker 3: right way to phrase a CPI report or is there

221
00:10:49,720 --> 00:10:52,320
Speaker 3: another temperature degree word you might use?

222
00:10:53,640 --> 00:10:58,600
Speaker 7: Maybe spicy, still say still too hot to handle?

223
00:10:58,880 --> 00:10:59,200
Speaker 3: Okay?

224
00:10:59,280 --> 00:11:01,920
Speaker 7: For Paul Makers, I think, I think, I think they're

225
00:11:01,920 --> 00:11:04,280
Speaker 7: going to be unhappy with this sort of reading. So

226
00:11:04,400 --> 00:11:06,800
Speaker 7: you know, maybe maybe one of those monikers would would

227
00:11:06,840 --> 00:11:07,520
Speaker 7: work here.

228
00:11:09,040 --> 00:11:12,079
Speaker 1: I like spicy, Yeah, I mean, especially in food, but

229
00:11:12,120 --> 00:11:14,560
Speaker 1: maybe not so much in inflation readings. So can you

230
00:11:14,559 --> 00:11:16,680
Speaker 1: talk a little bit to us a little bit about why,

231
00:11:16,840 --> 00:11:20,559
Speaker 1: you know, you've got this concern about the what seems

232
00:11:20,600 --> 00:11:22,120
Speaker 1: to me just to be a little bit of a

233
00:11:22,200 --> 00:11:25,679
Speaker 1: over an overshoot versus expectations for inflation, because there's a

234
00:11:25,679 --> 00:11:28,240
Speaker 1: lot of, you know, enthusiasm in the equity markets, for example,

235
00:11:28,240 --> 00:11:29,360
Speaker 1: that the FED might be on track.

236
00:11:30,679 --> 00:11:33,360
Speaker 7: Yeah, okay, So I think the context here is Powell

237
00:11:33,440 --> 00:11:36,800
Speaker 7: appeared on Capitol Hill last week and he reiterated his

238
00:11:36,960 --> 00:11:40,480
Speaker 7: view that we need to see monthly readings like we

239
00:11:40,520 --> 00:11:42,240
Speaker 7: saw in the second half of last year.

240
00:11:42,679 --> 00:11:45,200
Speaker 8: So I think he's referring there to core.

241
00:11:45,040 --> 00:11:48,240
Speaker 7: PCE, not so much Core CPI, but we had some

242
00:11:48,320 --> 00:11:52,000
Speaker 7: soft month to month change readings in the core measures

243
00:11:52,280 --> 00:11:53,800
Speaker 7: in the second half of last year, so we need

244
00:11:53,800 --> 00:11:56,320
Speaker 7: to see more of those, not necessarily better, but more,

245
00:11:56,840 --> 00:12:00,280
Speaker 7: and a number like point four for core CPI month

246
00:12:00,320 --> 00:12:03,840
Speaker 7: to month for January and again in February.

247
00:12:03,880 --> 00:12:06,360
Speaker 8: For me, that's too that's too hot.

248
00:12:06,520 --> 00:12:09,360
Speaker 7: So it's it's going to disappoint policy makers from that

249
00:12:09,360 --> 00:12:12,200
Speaker 7: perspective because they want to be convinced that inflation is

250
00:12:12,200 --> 00:12:14,280
Speaker 7: going to sustainably return to two percent.

251
00:12:14,360 --> 00:12:18,280
Speaker 8: I think this raises some questions. January could have been

252
00:12:18,280 --> 00:12:21,040
Speaker 8: a fluke, but two months in a row not so much.

253
00:12:21,080 --> 00:12:23,240
Speaker 3: So does that mean we have to lower our expectations

254
00:12:23,520 --> 00:12:27,079
Speaker 3: for inflation like it's a trajectory, it's not the final

255
00:12:27,120 --> 00:12:29,840
Speaker 3: destination kind of thing, as I think Powell's been alluding to.

256
00:12:30,880 --> 00:12:34,600
Speaker 7: I think investors should imagine that the FED probably will

257
00:12:34,679 --> 00:12:38,360
Speaker 7: cut rates this year, but it will happen later and.

258
00:12:38,360 --> 00:12:40,880
Speaker 8: There'll be fewer cuts. So we have the first cut.

259
00:12:40,720 --> 00:12:43,560
Speaker 7: In September and we have only two cuts for the year.

260
00:12:44,120 --> 00:12:46,200
Speaker 7: That's going to be disappointing for only.

261
00:12:46,000 --> 00:12:46,880
Speaker 3: Two cuts for the year.

262
00:12:47,120 --> 00:12:50,720
Speaker 7: Okay, that's interesting, that's right, and that's looking at the

263
00:12:50,760 --> 00:12:54,200
Speaker 7: destination where we think core inflation will end the year,

264
00:12:54,240 --> 00:12:57,680
Speaker 7: but also thinking about the path to get there. You know,

265
00:12:58,040 --> 00:13:00,720
Speaker 7: I think, well, there's not a one for one here

266
00:13:00,760 --> 00:13:04,120
Speaker 7: between core CPI and core PCEE could imply that when

267
00:13:04,120 --> 00:13:07,600
Speaker 7: we do see the core PCE numbers later this month,

268
00:13:07,640 --> 00:13:11,720
Speaker 7: they will also be a bit spicy, and so that

269
00:13:11,720 --> 00:13:14,080
Speaker 7: that's going to be again disappointing for policy makers.

270
00:13:14,640 --> 00:13:17,079
Speaker 1: What do you make of the markets reaction? I mean,

271
00:13:17,120 --> 00:13:19,200
Speaker 1: we had very little movement and bond youill to start with,

272
00:13:19,240 --> 00:13:21,120
Speaker 1: but now equities are very firmly up.

273
00:13:22,120 --> 00:13:23,240
Speaker 8: Yeah, yeah, I don't know.

274
00:13:23,400 --> 00:13:26,560
Speaker 7: Maybe investors had a hint that things the inflation would

275
00:13:26,559 --> 00:13:29,439
Speaker 7: come in stronger, That could be possible, or maybe it's

276
00:13:29,480 --> 00:13:31,800
Speaker 7: just going to take a bit more time to digest

277
00:13:31,800 --> 00:13:32,880
Speaker 7: the implications here.

278
00:13:33,280 --> 00:13:35,280
Speaker 8: I also, I know, you know, just from talking to.

279
00:13:35,960 --> 00:13:40,640
Speaker 7: Colleagues and co workers and competitors, you know, you hear

280
00:13:41,400 --> 00:13:45,040
Speaker 7: kind of some positive spin here, the fact that February's

281
00:13:45,080 --> 00:13:48,160
Speaker 7: core reading wasn't as bad or wasn't as hot as January's.

282
00:13:48,559 --> 00:13:52,160
Speaker 7: So we did see we did see a little bit

283
00:13:52,200 --> 00:13:53,920
Speaker 7: of a cooling relative to January.

284
00:13:54,080 --> 00:13:55,680
Speaker 8: So maybe some good hints in there.

285
00:13:56,200 --> 00:13:57,920
Speaker 7: But you know, I like to look just you know,

286
00:13:57,960 --> 00:13:59,840
Speaker 7: looking at core CPI month a month, but also looking

287
00:13:59,840 --> 00:14:03,080
Speaker 7: at median CPI. The median CPI just looking at the

288
00:14:03,120 --> 00:14:06,760
Speaker 7: median price change that just dropped from Cleveland FED and

289
00:14:06,800 --> 00:14:08,520
Speaker 7: that was also.

290
00:14:08,040 --> 00:14:10,840
Speaker 8: Point four month to month after a point five.

291
00:14:10,920 --> 00:14:14,400
Speaker 7: So I still think underlying core inflation is a bit

292
00:14:14,440 --> 00:14:17,720
Speaker 7: too strong. Market probably will wake up to this over

293
00:14:17,760 --> 00:14:19,040
Speaker 7: the over the next few days.

294
00:14:19,080 --> 00:14:21,520
Speaker 3: Okay, so market wakes up to it. I appreciate your

295
00:14:21,520 --> 00:14:24,080
Speaker 3: an economists, but what happens, Like, we've already seen some

296
00:14:24,120 --> 00:14:26,200
Speaker 3: selling across the bond market. We've seen sort of the

297
00:14:26,240 --> 00:14:28,920
Speaker 3: back end catch up a little bit here with yesterday

298
00:14:29,000 --> 00:14:31,040
Speaker 3: is selling in the front end. What's going to be

299
00:14:31,040 --> 00:14:31,720
Speaker 3: the ramification?

300
00:14:32,520 --> 00:14:35,040
Speaker 8: Yeah, I think higher, higher bond yields across the curve.

301
00:14:36,680 --> 00:14:41,000
Speaker 7: Implication would be, you know, pricing of fewer cuts, pushing

302
00:14:41,000 --> 00:14:43,280
Speaker 7: out the timing of cuts. That could also have an

303
00:14:43,280 --> 00:14:47,480
Speaker 7: impact on risk assets, equity prices, credit spreads in the

304
00:14:47,480 --> 00:14:50,760
Speaker 7: bond market. I think that could ripple through as well.

305
00:14:50,920 --> 00:14:54,400
Speaker 7: So you know, really it's the bond market that is

306
00:14:54,440 --> 00:14:58,160
Speaker 7: the key driver here of everything else. So the implication

307
00:14:58,280 --> 00:15:00,720
Speaker 7: is higher, higher bond fields for longer.

308
00:15:01,400 --> 00:15:03,120
Speaker 1: So now I want to ask you about a theme

309
00:15:03,200 --> 00:15:05,360
Speaker 1: that you know. Alex and I were discussing this earlier

310
00:15:05,400 --> 00:15:07,600
Speaker 1: and we had some guests talking about the election coming

311
00:15:07,640 --> 00:15:10,200
Speaker 1: up this year, how do you see things developing in

312
00:15:10,240 --> 00:15:12,600
Speaker 1: the second half, and indeed in this second quarter or

313
00:15:12,600 --> 00:15:14,640
Speaker 1: the fourth choir, I should say, because if you've only

314
00:15:14,680 --> 00:15:16,960
Speaker 1: got two rate cuts, one of them's going to have

315
00:15:17,000 --> 00:15:20,960
Speaker 1: to come either immediately after the election or in December,

316
00:15:21,000 --> 00:15:23,200
Speaker 1: and so you must have a very particular view about

317
00:15:23,200 --> 00:15:26,040
Speaker 1: what sentiment around lower interest rates is going to be

318
00:15:26,080 --> 00:15:26,720
Speaker 1: at that time.

319
00:15:27,960 --> 00:15:31,400
Speaker 7: Well, I just think back to twenty sixteen we saw

320
00:15:31,520 --> 00:15:34,920
Speaker 7: rate hike at the end of the election year. There's

321
00:15:34,960 --> 00:15:37,200
Speaker 7: been some other instances, you know, twenty eighteen we had

322
00:15:37,240 --> 00:15:40,480
Speaker 7: four rate hikes throughout the year despite we had midterm elections.

323
00:15:40,520 --> 00:15:44,640
Speaker 7: I think investors like to talk about elections, they love

324
00:15:44,680 --> 00:15:47,240
Speaker 7: to talk about politics, but really I think it's going

325
00:15:47,320 --> 00:15:50,800
Speaker 7: to be the inflation trajectory that determines what happens with

326
00:15:50,920 --> 00:15:55,200
Speaker 7: interest rates, not the election. So really coming back to

327
00:15:55,240 --> 00:15:58,840
Speaker 7: that path for core inflation and then ultimately the destination.

328
00:15:59,080 --> 00:16:02,240
Speaker 7: If we're right that the a is bumpier and we

329
00:16:02,320 --> 00:16:04,520
Speaker 7: end up with higher core inflation at the end of

330
00:16:04,520 --> 00:16:08,080
Speaker 7: the year than the market currently expects, then we'll get

331
00:16:08,280 --> 00:16:11,000
Speaker 7: fewer we'll get the fewer cuts the Fed funds rate

332
00:16:11,040 --> 00:16:12,040
Speaker 7: will end up being higher.

333
00:16:12,160 --> 00:16:13,760
Speaker 8: I think that's the key story the election.

334
00:16:14,320 --> 00:16:16,080
Speaker 7: What happens there is not I don't think it's going

335
00:16:16,160 --> 00:16:18,960
Speaker 7: to change that now for twenty twenty five, that's where

336
00:16:18,960 --> 00:16:21,560
Speaker 7: the election really matters, right, because that could change the

337
00:16:21,600 --> 00:16:25,960
Speaker 7: tone of fiscal policy in the coming year. So I

338
00:16:26,880 --> 00:16:30,800
Speaker 7: do think if the Republicans take back the White House,

339
00:16:31,000 --> 00:16:34,760
Speaker 7: then you could have a more aggressive or expansionary fiscal

340
00:16:34,760 --> 00:16:37,280
Speaker 7: policy in twenty twenty five. And again that could have

341
00:16:37,320 --> 00:16:39,920
Speaker 7: some some BONDI old implications, but it's probably a story

342
00:16:39,960 --> 00:16:42,240
Speaker 7: for late twenty four and into twenty five.

343
00:16:42,520 --> 00:16:45,360
Speaker 3: Let's put that aside for a second. So you see

344
00:16:45,360 --> 00:16:47,880
Speaker 3: two this year, and then how many cuts? Then are

345
00:16:48,160 --> 00:16:50,600
Speaker 3: you sort of mapping out for twenty twenty five, like

346
00:16:50,640 --> 00:16:52,000
Speaker 3: the whole rate I think cut cycle.

347
00:16:52,680 --> 00:16:55,240
Speaker 7: I think it's possible that you could see one, you know,

348
00:16:55,280 --> 00:16:57,800
Speaker 7: sort of a pace per quarter in twenty twenty five

349
00:16:57,840 --> 00:17:01,000
Speaker 7: of one cut per quarter, so you get an additional

350
00:17:01,040 --> 00:17:04,000
Speaker 7: three or four in twenty twenty five, something like that.

351
00:17:04,600 --> 00:17:07,800
Speaker 7: So certainly no slashing of the Fed funds rate, not

352
00:17:07,920 --> 00:17:12,919
Speaker 7: anticipating on a twelve month horizon a recession. So I

353
00:17:12,920 --> 00:17:15,040
Speaker 7: guess this would be more similar to what you saw

354
00:17:15,080 --> 00:17:17,399
Speaker 7: in the mid nineteen nineties where we had, you know,

355
00:17:17,400 --> 00:17:20,560
Speaker 7: the early nineteen nineties, the Fed hiked a lot, rates

356
00:17:20,600 --> 00:17:23,040
Speaker 7: went up a lot, but the economy continued to grow

357
00:17:23,080 --> 00:17:24,000
Speaker 7: throughout that decade.

358
00:17:24,040 --> 00:17:25,880
Speaker 8: So the FED funds rate stayed.

359
00:17:25,640 --> 00:17:28,520
Speaker 7: In a pretty narrow range from say, nineteen ninety five

360
00:17:28,720 --> 00:17:31,440
Speaker 7: until nineteen late nineteen ninety eight.

361
00:17:31,800 --> 00:17:33,440
Speaker 8: And there's nothing more like that.

362
00:17:33,480 --> 00:17:38,720
Speaker 3: There's no dramatic falloff. Then, in that depective, the.

363
00:17:38,760 --> 00:17:41,679
Speaker 7: Question is, how would you get a dramatic falloff? To me,

364
00:17:41,800 --> 00:17:44,199
Speaker 7: it has to be an economic downturn. It has to

365
00:17:44,200 --> 00:17:46,440
Speaker 7: be a recession, so you have to have that in

366
00:17:46,200 --> 00:17:49,360
Speaker 7: your your forecast. We're more upbeat. We think the economy

367
00:17:49,400 --> 00:17:51,159
Speaker 7: will continue to grow out over the next year.

368
00:17:51,760 --> 00:17:54,640
Speaker 3: Doesn't he He is here even like looking about on YouTube,

369
00:17:54,640 --> 00:17:56,200
Speaker 3: like his energy is like he's into it.

370
00:17:56,320 --> 00:18:00,480
Speaker 8: He's he's He's still California. The California vibe here makes sense.

371
00:18:01,480 --> 00:18:03,919
Speaker 1: The good weather, Yeah I know. But now look, let

372
00:18:03,960 --> 00:18:06,600
Speaker 1: me ask you about consumer sentiment, because you know, there's

373
00:18:06,680 --> 00:18:10,640
Speaker 1: the inflation squeeze pinches everyone's pockets, and yeah, inflation is easy,

374
00:18:10,760 --> 00:18:12,640
Speaker 1: but the prices are still a heck of a lot

375
00:18:12,720 --> 00:18:15,200
Speaker 1: higher than they were before. And this is something that

376
00:18:15,320 --> 00:18:19,000
Speaker 1: we've been well established has been weighing on enthusiasm for

377
00:18:19,040 --> 00:18:21,600
Speaker 1: the Joe Biden economic program. So how do you see

378
00:18:21,600 --> 00:18:24,080
Speaker 1: consumer development, consumer sentiment developing.

379
00:18:25,040 --> 00:18:29,720
Speaker 7: Well, just talking to virtually, you know, all clients, they say, hey, Jeffery,

380
00:18:29,720 --> 00:18:32,600
Speaker 7: you're saying that inflation is cooling off. But you know,

381
00:18:32,680 --> 00:18:36,560
Speaker 7: I still see prices elevated at the pump, or I

382
00:18:36,600 --> 00:18:40,400
Speaker 7: still see expensive food prices. So I mean, the difference

383
00:18:40,440 --> 00:18:43,840
Speaker 7: there is just rates versus level. Central bankers are focused

384
00:18:43,880 --> 00:18:46,959
Speaker 7: on the rate of inflation. I think the average consumer

385
00:18:47,760 --> 00:18:50,000
Speaker 7: is focused on the level of inflation. So that's the

386
00:18:50,040 --> 00:18:54,080
Speaker 7: disconnect you see as a result, that's weighing on consumer sentiment.

387
00:18:54,320 --> 00:18:56,040
Speaker 8: And so that's just a fact. I don't think there's

388
00:18:56,080 --> 00:18:57,240
Speaker 8: any way around that.

389
00:18:57,280 --> 00:19:00,399
Speaker 7: But this was brought to the attention here knows this,

390
00:19:00,440 --> 00:19:02,480
Speaker 7: but Jerome Powell was asked about this last week on

391
00:19:02,480 --> 00:19:05,160
Speaker 7: Capitol Hill and he said, look, we're we're not expecting

392
00:19:05,200 --> 00:19:08,880
Speaker 7: to see price level fall, the average price level fall.

393
00:19:08,920 --> 00:19:12,160
Speaker 7: That only happens in very adverse you know, economic scenarios

394
00:19:12,160 --> 00:19:15,840
Speaker 7: like a recession. You know, what they're trying to achieve

395
00:19:15,920 --> 00:19:19,480
Speaker 7: is a slowdown in the rate of increase, trying to

396
00:19:19,480 --> 00:19:21,720
Speaker 7: get that back to two percent. But we've already talked

397
00:19:21,760 --> 00:19:24,320
Speaker 7: about there's problems even then. I think inflation is a

398
00:19:24,320 --> 00:19:26,119
Speaker 7: little bit stickier even on that slowdown.

399
00:19:26,640 --> 00:19:29,960
Speaker 3: All right, really good stuff. Appreciate the positivity. Jeffrey Cleveland,

400
00:19:30,200 --> 00:19:33,320
Speaker 3: chief economist at Paydon and Regal. He joins us there,

401
00:19:33,480 --> 00:19:35,600
Speaker 3: but then the flip side, you have more, you know.

402
00:19:35,640 --> 00:19:38,480
Speaker 3: Morgan Stanley's Mike Wilson says he doesn't see a need

403
00:19:38,520 --> 00:19:41,000
Speaker 3: to raise the S and P five hundred target. There's

404
00:19:41,040 --> 00:19:43,720
Speaker 3: no justification in the absence of broad earnings growth.

405
00:19:43,720 --> 00:19:43,840
Speaker 9: Now.

406
00:19:43,880 --> 00:19:47,119
Speaker 3: That is in contrast with an idea that maybe it's okay,

407
00:19:47,280 --> 00:19:49,040
Speaker 3: like we're not going to need a huge downturn in

408
00:19:49,119 --> 00:19:51,040
Speaker 3: order to get fed cuts. You can make do with

409
00:19:51,119 --> 00:19:52,919
Speaker 3: five maybe six for the total cycle.

410
00:19:53,160 --> 00:19:56,560
Speaker 1: I mean, going back to the nineteen nineties rates around

411
00:19:56,560 --> 00:19:59,280
Speaker 1: five percent or so, that's very long way from what

412
00:19:59,280 --> 00:20:01,199
Speaker 1: it was at twelve thirteen percent or what have you.

413
00:20:01,480 --> 00:20:03,720
Speaker 1: And so if you think where are we right now,

414
00:20:03,760 --> 00:20:05,719
Speaker 1: this is definitely an area that we can live with.

415
00:20:08,240 --> 00:20:12,119
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

416
00:20:12,200 --> 00:20:14,840
Speaker 2: weekdays at ten am Eastern on Affo car Playing and

417
00:20:15,000 --> 00:20:17,919
Speaker 2: broyd Otto with the Bloomberg Business app, listen on demand

418
00:20:17,960 --> 00:20:21,639
Speaker 2: wherever you get your podcasts, or watch us live on YouTube.

419
00:20:22,880 --> 00:20:25,280
Speaker 3: Let's take another look from an investor perspective, what do

420
00:20:25,280 --> 00:20:27,320
Speaker 3: you do now? Like we got through CPI, it was

421
00:20:27,359 --> 00:20:29,600
Speaker 3: a little bit of a sell into the news and

422
00:20:29,640 --> 00:20:32,639
Speaker 3: then buy the news kind of situation. We're still going

423
00:20:32,720 --> 00:20:35,520
Speaker 3: to grind higher here. So it seems Bank of America

424
00:20:35,560 --> 00:20:38,600
Speaker 3: now upgrading their earnings forecast, really looking at a hyper

425
00:20:38,640 --> 00:20:40,920
Speaker 3: investment cycle when it comes to the big tech guys.

426
00:20:40,920 --> 00:20:41,880
Speaker 2: So what do you do?

427
00:20:42,000 --> 00:20:45,439
Speaker 3: Margie Pateel is senior portfolio manager at all Spring Global

428
00:20:45,480 --> 00:20:47,800
Speaker 3: Investments and she joins us. Now, Margie, do you buy

429
00:20:47,840 --> 00:20:48,520
Speaker 3: into this now?

430
00:20:48,600 --> 00:20:48,679
Speaker 4: Like?

431
00:20:48,800 --> 00:20:51,720
Speaker 3: Is there again? It feels like we just can't sell

432
00:20:52,080 --> 00:20:53,480
Speaker 3: so you have to throw in the towel here and

433
00:20:53,520 --> 00:20:54,760
Speaker 3: buy no matter what and hold on.

434
00:20:56,280 --> 00:20:59,480
Speaker 10: Well, yes, because fundamental ad economy looks in good shape.

435
00:20:59,520 --> 00:21:02,080
Speaker 10: It looks as if we're growing, say between two and

436
00:21:02,160 --> 00:21:04,840
Speaker 10: three percent, which is good enough to have earnings up

437
00:21:04,920 --> 00:21:08,040
Speaker 10: say ten or twelve percent for the year. So that's

438
00:21:08,119 --> 00:21:11,480
Speaker 10: really pre attractive for equity investors. And you can see

439
00:21:11,480 --> 00:21:14,920
Speaker 10: the FED is really betook between that'd like to cut rates,

440
00:21:14,920 --> 00:21:17,560
Speaker 10: but they really can't when inflation is so stubbornly a

441
00:21:17,600 --> 00:21:18,840
Speaker 10: little bit about their target.

442
00:21:19,240 --> 00:21:20,760
Speaker 11: So that's why you're seeing mixed signals.

443
00:21:20,880 --> 00:21:22,960
Speaker 10: Bottom markets are down a little bit in price, but

444
00:21:23,040 --> 00:21:24,520
Speaker 10: equities up a little bit in price.

445
00:21:27,720 --> 00:21:29,280
Speaker 1: Can you talk to me a little bit about your

446
00:21:29,280 --> 00:21:31,920
Speaker 1: take on the equity market. Where do you see investors

447
00:21:31,920 --> 00:21:34,000
Speaker 1: should be concentrating, Where do you see that they should

448
00:21:34,040 --> 00:21:35,120
Speaker 1: be staying away a little bit?

449
00:21:36,560 --> 00:21:38,679
Speaker 10: Well, I think it's still the same themes that we

450
00:21:38,760 --> 00:21:41,679
Speaker 10: had last year. Although the market might be broadening out

451
00:21:41,720 --> 00:21:44,840
Speaker 10: a little bit, it's still sticking with companies. It's fundamentally

452
00:21:44,960 --> 00:21:48,160
Speaker 10: look like they have above average long term secular growth.

453
00:21:48,400 --> 00:21:50,760
Speaker 10: So that says to me the tech sector is still

454
00:21:50,760 --> 00:21:53,760
Speaker 10: going to be one of the strongest. Is certainly volvable

455
00:21:53,800 --> 00:21:56,280
Speaker 10: as short term traders change their settlements here and there.

456
00:21:56,400 --> 00:21:57,600
Speaker 11: Basically, I think.

457
00:21:57,480 --> 00:22:00,199
Speaker 10: The trend is still your friend in technology, and I

458
00:22:00,200 --> 00:22:03,600
Speaker 10: think in industrials, particularly those companies are going to benefit

459
00:22:03,680 --> 00:22:07,399
Speaker 10: from shoring from higher capital investment in certain areas. I

460
00:22:07,400 --> 00:22:10,200
Speaker 10: think those companies are going to do well, their price reasonably,

461
00:22:10,600 --> 00:22:13,320
Speaker 10: and they should have growth that's actually pretty competitive even

462
00:22:13,359 --> 00:22:15,399
Speaker 10: with some of the tech sectors. And we've had a

463
00:22:15,440 --> 00:22:19,439
Speaker 10: little bit of turnaround in healthcare people really trash the

464
00:22:19,480 --> 00:22:22,119
Speaker 10: sector because of the down earns from COVID, So I

465
00:22:22,119 --> 00:22:25,120
Speaker 10: think we're seeing more money attracted to the healthcare sector.

466
00:22:26,000 --> 00:22:28,480
Speaker 3: What about industrials, We just heard Techer talk about three

467
00:22:28,600 --> 00:22:32,080
Speaker 3: M changing CEOs. That has been a really rough ride

468
00:22:32,080 --> 00:22:34,080
Speaker 3: for three M. They pretty much like make everything, and

469
00:22:34,080 --> 00:22:36,160
Speaker 3: they have so many parts of their business that sometimes

470
00:22:36,160 --> 00:22:38,760
Speaker 3: that winds up hurting them. Where in the industrial space

471
00:22:38,840 --> 00:22:39,760
Speaker 3: might you be looking.

472
00:22:40,800 --> 00:22:43,280
Speaker 10: Well, I think three M is really a special case.

473
00:22:43,400 --> 00:22:45,720
Speaker 10: You have to look at the company, the fundamentals. They

474
00:22:45,760 --> 00:22:49,520
Speaker 10: just have a new CEO and look at it afresh.

475
00:22:49,880 --> 00:22:51,760
Speaker 10: But as far as the rest of the industrials, I

476
00:22:51,760 --> 00:22:55,280
Speaker 10: think that they should on balance look pretty attractive because

477
00:22:55,320 --> 00:22:58,160
Speaker 10: a lot of them will benefit from higher capital expenditures.

478
00:22:58,680 --> 00:23:02,359
Speaker 10: They'll benefit I think from the reshoring less competition from

479
00:23:02,440 --> 00:23:06,520
Speaker 10: say China, for example, And also I think that as

480
00:23:06,560 --> 00:23:08,640
Speaker 10: far as what we're seeing as far as the government

481
00:23:09,080 --> 00:23:14,159
Speaker 10: with their encouraging more investment in semiconductors, with needing to

482
00:23:14,320 --> 00:23:17,240
Speaker 10: upgrade the electrical grid, I think those companies are going

483
00:23:17,320 --> 00:23:20,360
Speaker 10: to do surprisingly well. Their price reasonably, so I think

484
00:23:20,400 --> 00:23:23,560
Speaker 10: they can easily be one of the more competitive sectors

485
00:23:23,560 --> 00:23:23,920
Speaker 10: this year.

486
00:23:24,640 --> 00:23:28,560
Speaker 1: What's your view on more consumer facing companies. We've still

487
00:23:28,600 --> 00:23:32,760
Speaker 1: seen inflation quite powerful and consumers get still feeling squeezed,

488
00:23:32,760 --> 00:23:34,560
Speaker 1: but at the same time it's a hot job market,

489
00:23:34,560 --> 00:23:35,320
Speaker 1: hot salaries.

490
00:23:36,640 --> 00:23:39,600
Speaker 10: Well, I think in the consumer sector, I think that

491
00:23:39,680 --> 00:23:42,440
Speaker 10: the discretionary sector is likely to do it a bit

492
00:23:42,480 --> 00:23:46,160
Speaker 10: better than the staples sector, simply because people do have

493
00:23:46,720 --> 00:23:51,040
Speaker 10: more people have jobs. We have sours going up small enough,

494
00:23:51,080 --> 00:23:55,119
Speaker 10: maybe not enough to totally compensate for inflation, and the

495
00:23:55,200 --> 00:23:57,439
Speaker 10: staples I think is a sector that.

496
00:23:57,720 --> 00:23:59,520
Speaker 11: I'm sort of warm on. I think it's going to

497
00:23:59,520 --> 00:24:00,760
Speaker 11: be hard to there's.

498
00:24:00,920 --> 00:24:04,560
Speaker 10: Excess capacity, they don't have pricing power, and fundamentally those

499
00:24:04,640 --> 00:24:08,080
Speaker 10: markets are rather slow growth. So unless a company can

500
00:24:08,119 --> 00:24:12,560
Speaker 10: reinvest himself in the stable side, we think the discretionaire

501
00:24:12,600 --> 00:24:14,560
Speaker 10: is a better place to be for consumers.

502
00:24:14,840 --> 00:24:16,600
Speaker 3: Hey, Margie, do my homework for me. I try and

503
00:24:16,640 --> 00:24:19,159
Speaker 3: come up with a couple of themes every day, like

504
00:24:19,400 --> 00:24:21,520
Speaker 3: these are the main questions that we're all thinking about.

505
00:24:21,520 --> 00:24:24,040
Speaker 3: These are the main themes. I gotta tell you, I

506
00:24:24,080 --> 00:24:26,880
Speaker 3: don't have one today. It might be me. I mean,

507
00:24:26,920 --> 00:24:28,639
Speaker 3: I'll put it out there, it could very well be me.

508
00:24:29,320 --> 00:24:32,760
Speaker 3: But what's my question today? What are the main questions

509
00:24:32,760 --> 00:24:33,280
Speaker 3: we have.

510
00:24:33,240 --> 00:24:36,879
Speaker 10: Now, Well, I think it's just more of the same

511
00:24:37,280 --> 00:24:40,080
Speaker 10: and really do nothing because there's really not a lot

512
00:24:40,119 --> 00:24:41,480
Speaker 10: of productive things to do here.

513
00:24:41,680 --> 00:24:43,800
Speaker 3: Okay, so it's not my fault. My takeaway is that

514
00:24:43,800 --> 00:24:44,480
Speaker 3: that's not my fault.

515
00:24:44,880 --> 00:24:48,679
Speaker 10: Oh no, position, because they would love the cut rates,

516
00:24:48,840 --> 00:24:53,560
Speaker 10: but they really can't when inflation is stubbornly high, trends

517
00:24:53,720 --> 00:24:56,840
Speaker 10: coming down but not enough to justify cutting rates, and

518
00:24:56,840 --> 00:24:59,560
Speaker 10: they're well aware of the interest rate burden with the

519
00:24:59,640 --> 00:25:03,280
Speaker 10: huge deficit, so they really betwixt in between, and so

520
00:25:03,359 --> 00:25:05,880
Speaker 10: they really can't do much except maybe, you know, talk

521
00:25:05,920 --> 00:25:09,160
Speaker 10: every now and then, and the companies are just motoring

522
00:25:09,240 --> 00:25:12,639
Speaker 10: right along. Our earnings are once again surprisingly good in

523
00:25:12,680 --> 00:25:15,399
Speaker 10: the last quarter. I think they'll continue to be surprisingly good.

524
00:25:15,480 --> 00:25:18,439
Speaker 10: We have enough growth to sustain higher stock levels, so

525
00:25:18,440 --> 00:25:21,680
Speaker 10: I think we'll see stocks go up this year. Bonds

526
00:25:22,320 --> 00:25:24,000
Speaker 10: be more or less in a trading range, I think,

527
00:25:24,080 --> 00:25:26,919
Speaker 10: just because it'll be a little burden body supply of treasures,

528
00:25:27,119 --> 00:25:30,040
Speaker 10: and I think that'll keep the yield spreads of corporate

529
00:25:30,080 --> 00:25:33,520
Speaker 10: bonds narrower to treasures that would traditionally think and I

530
00:25:33,520 --> 00:25:36,439
Speaker 10: think when you value stocks by looking what the yield

531
00:25:36,520 --> 00:25:38,800
Speaker 10: is in the ten year treasury. You're going to miss

532
00:25:38,840 --> 00:25:40,600
Speaker 10: a little bit because I think treasures are going to

533
00:25:40,640 --> 00:25:42,760
Speaker 10: be somewhat higher than they would be if we have

534
00:25:42,840 --> 00:25:45,639
Speaker 10: a so called normal market because of the very very

535
00:25:45,720 --> 00:25:46,560
Speaker 10: high supply we have.

536
00:25:47,720 --> 00:25:50,159
Speaker 1: You know, there's one theme that will never fail us

537
00:25:50,160 --> 00:25:51,720
Speaker 1: and Alex, I think we can always have this in

538
00:25:51,720 --> 00:25:54,239
Speaker 1: our back pocket. Is the election coming up, and I

539
00:25:54,280 --> 00:25:56,280
Speaker 1: think it would be an interesting thing for you to

540
00:25:56,280 --> 00:25:59,040
Speaker 1: talk a little bit about how you see these trends

541
00:25:59,119 --> 00:26:01,280
Speaker 1: developing in this and half of the year, Bearing in

542
00:26:01,320 --> 00:26:04,000
Speaker 1: mind that I think it's pretty safe to say that

543
00:26:04,040 --> 00:26:07,800
Speaker 1: we're all gearing up for a very hardly closely faught election.

544
00:26:08,680 --> 00:26:11,560
Speaker 10: Yes, well, I thought coming into the year that the

545
00:26:11,600 --> 00:26:13,719
Speaker 10: first half of the year would be very chopping up

546
00:26:13,720 --> 00:26:15,600
Speaker 10: and down and not really make a lot of.

547
00:26:15,520 --> 00:26:16,400
Speaker 11: Headway either way.

548
00:26:16,880 --> 00:26:19,199
Speaker 10: It's surprising me with how well we've done in the

549
00:26:19,480 --> 00:26:22,760
Speaker 10: in nasdak and standard pours up well over six percent,

550
00:26:23,720 --> 00:26:27,040
Speaker 10: dal Jones up maybe close to three percent, so that's a.

551
00:26:27,040 --> 00:26:28,879
Speaker 11: Little better than I would have fought this point.

552
00:26:29,440 --> 00:26:31,879
Speaker 10: My thinking is we may still chalk around with worries

553
00:26:31,920 --> 00:26:36,760
Speaker 10: about slower growth, inflation or whatnot, but typically inflation in

554
00:26:36,920 --> 00:26:39,480
Speaker 10: election years or good years for the equity market. So

555
00:26:39,520 --> 00:26:41,440
Speaker 10: I think in the second half of the year, maybe

556
00:26:41,520 --> 00:26:44,120
Speaker 10: towards the end part of the year, we should see

557
00:26:44,160 --> 00:26:47,800
Speaker 10: a rather strong rally into the finish, regardless of which

558
00:26:47,840 --> 00:26:51,520
Speaker 10: candidate wins, because I think that it'll just reflect the

559
00:26:51,640 --> 00:26:54,520
Speaker 10: lack of uncertainty and the fact the economy still has

560
00:26:54,560 --> 00:26:57,639
Speaker 10: a lot of sustainable growth. That's what people miss in

561
00:26:57,880 --> 00:27:02,080
Speaker 10: looking for waitnesses as if FED ate rates. The economy

562
00:27:02,160 --> 00:27:04,639
Speaker 10: is in great shape. There's no sector that's really out about,

563
00:27:04,840 --> 00:27:07,520
Speaker 10: so I think the growth should continue.

564
00:27:07,920 --> 00:27:09,960
Speaker 3: But to your point also, Jen, you know, if you

565
00:27:10,080 --> 00:27:13,520
Speaker 3: played the themes the last election, they didn't do anything

566
00:27:13,560 --> 00:27:17,800
Speaker 3: for you, Like clean energy stocks fell after President Biden,

567
00:27:17,960 --> 00:27:21,199
Speaker 3: I mean taking went in office despite the IRA for example, right, Like,

568
00:27:21,600 --> 00:27:24,119
Speaker 3: so even if you play those themes like doesn't always

569
00:27:24,160 --> 00:27:24,520
Speaker 3: work out.

570
00:27:24,800 --> 00:27:26,720
Speaker 1: Yeah, I mean you can have a theme, but what

571
00:27:26,800 --> 00:27:28,359
Speaker 1: it does for you is a separate and.

572
00:27:28,520 --> 00:27:31,920
Speaker 3: Very different story. Yeah. Hey, MARGI you sound really positive,

573
00:27:31,960 --> 00:27:35,400
Speaker 3: you sound really bullish. I mean, why would the FED cut.

574
00:27:37,320 --> 00:27:39,840
Speaker 10: Well, because I'd like to cut because they would like

575
00:27:39,880 --> 00:27:41,720
Speaker 10: they would like to see inflation come down.

576
00:27:41,840 --> 00:27:43,679
Speaker 11: It hasn't a blow actud. I think it's been a

577
00:27:43,720 --> 00:27:44,280
Speaker 11: slow go on.

578
00:27:44,359 --> 00:27:47,919
Speaker 10: Inflation and as I said, they really are aware of

579
00:27:47,960 --> 00:27:51,000
Speaker 10: the burden that interest rates are going to have as

580
00:27:51,000 --> 00:27:55,040
Speaker 10: they go higher for financing the federal deficit. It's it's

581
00:27:55,119 --> 00:27:57,159
Speaker 10: not a small factor, So I think they have to

582
00:27:57,160 --> 00:28:00,960
Speaker 10: be well aware of that, particularly when likely to continue

583
00:28:00,960 --> 00:28:04,520
Speaker 10: to have definite financing as far as God can see.

584
00:28:05,560 --> 00:28:07,840
Speaker 10: And I think they would like they feel that lower

585
00:28:07,960 --> 00:28:10,040
Speaker 10: rates would be healthy, although I can't think of a

586
00:28:10,119 --> 00:28:12,440
Speaker 10: market where if the ten years saber toween four and

587
00:28:12,560 --> 00:28:17,600
Speaker 10: five percent, how that could be considered depression on the economy.

588
00:28:17,880 --> 00:28:20,120
Speaker 11: I think companies have shown they're pretty resilient.

589
00:28:20,160 --> 00:28:24,080
Speaker 10: They've restructured their balance sheet, and they're relatively insensitive to

590
00:28:24,600 --> 00:28:28,040
Speaker 10: as particularly moves in short term rates and really long

591
00:28:28,119 --> 00:28:31,240
Speaker 10: rates aren't high enough to do real corporate profits. So

592
00:28:31,280 --> 00:28:33,720
Speaker 10: we think you really have to be positive. If you

593
00:28:33,720 --> 00:28:35,840
Speaker 10: look at the history books, you'd say, yes, if that

594
00:28:36,000 --> 00:28:38,880
Speaker 10: is going to cause a recession, but they haven't now

595
00:28:38,960 --> 00:28:42,040
Speaker 10: in two years, and I don't think that that's they

596
00:28:42,080 --> 00:28:43,880
Speaker 10: would like to do that. I think they'd like to

597
00:28:44,760 --> 00:28:48,920
Speaker 10: tlimbrate their interest rate adjustments to not damage the economy.

598
00:28:49,080 --> 00:28:51,280
Speaker 3: Yeah, all right, Margie, thanks Lott, We appreciate it. Thanks

599
00:28:51,280 --> 00:28:54,760
Speaker 3: for Geponoma. That's margat Patel, senior portfolio manager at Allspring

600
00:28:54,960 --> 00:28:56,200
Speaker 3: Global Investments.

601
00:28:57,720 --> 00:29:02,200
Speaker 2: You're listening to the Bloomberg Intelligence. Catch us live weekdays

602
00:29:02,200 --> 00:29:05,480
Speaker 2: at ten am Eastern on Applecar Play and Android Auto

603
00:29:05,600 --> 00:29:08,600
Speaker 2: with the Bloomberg Business. You can also listen live on

604
00:29:08,640 --> 00:29:11,920
Speaker 2: Amazon Alexa from our flagship New York station. Just say

605
00:29:12,000 --> 00:29:14,680
Speaker 2: Alexa play. Bloomberg eleven thirty.

606
00:29:15,440 --> 00:29:18,520
Speaker 3: Oracle stock of eleven percent so shares a rally at

607
00:29:18,520 --> 00:29:21,120
Speaker 3: the infrastructure software A company reporting third quarter results the

608
00:29:21,120 --> 00:29:23,800
Speaker 3: beat expectations on some key metrics. Here, we want to

609
00:29:23,840 --> 00:29:26,960
Speaker 3: get more with Brody Ford Bloomberg, a tech reporter joining us.

610
00:29:27,000 --> 00:29:30,480
Speaker 3: Hey Brody, why why was the street so surprised?

611
00:29:31,080 --> 00:29:33,720
Speaker 9: There's been a big debate over the last year. Can

612
00:29:33,760 --> 00:29:37,240
Speaker 9: Oracle transform from this kind of old school on premise,

613
00:29:37,400 --> 00:29:39,840
Speaker 9: come to your office and install it on your servers

614
00:29:39,920 --> 00:29:43,440
Speaker 9: kind of company to really offering cloud infrastructure the way

615
00:29:43,440 --> 00:29:47,240
Speaker 9: we think about Amazon or Microsoft doing. The last couple

616
00:29:47,240 --> 00:29:49,880
Speaker 9: of quarters, they were disappointing and people were starting to

617
00:29:49,960 --> 00:29:52,400
Speaker 9: wonder is this a flash in the pan? Is their

618
00:29:52,400 --> 00:29:55,840
Speaker 9: growth sustained? Yesterday they said, hey, no, we actually got

619
00:29:55,880 --> 00:29:58,360
Speaker 9: billions more on orders than you expected. They had really

620
00:29:58,400 --> 00:30:02,400
Speaker 9: strong bookings growth. That's kind of reignited that enthusiasm that hey,

621
00:30:02,920 --> 00:30:06,360
Speaker 9: maybe Oracle really can be that, you know, fourth hyper

622
00:30:06,440 --> 00:30:08,880
Speaker 9: scaler after Google, Amazon and Microsoft.

623
00:30:09,640 --> 00:30:12,120
Speaker 1: But I guess you know, they've been having their ups

624
00:30:12,120 --> 00:30:15,120
Speaker 1: and downs. Their shares got really badly hit relatively speaking,

625
00:30:15,160 --> 00:30:17,840
Speaker 1: and so do you feel like the recovery today is

626
00:30:17,840 --> 00:30:20,160
Speaker 1: for real or what's going to be the next waystation

627
00:30:20,240 --> 00:30:21,400
Speaker 1: that investors have to look for.

628
00:30:21,600 --> 00:30:25,720
Speaker 9: So what's convinced them is that when you're offering cloud services,

629
00:30:25,760 --> 00:30:28,360
Speaker 9: people forget the cloud isn't in the sky, it's in

630
00:30:28,480 --> 00:30:31,240
Speaker 9: data centers in Virginia and they need.

631
00:30:31,040 --> 00:30:34,240
Speaker 8: To build them quote of the day.

632
00:30:34,160 --> 00:30:37,000
Speaker 9: Yeah, and so Oracle said that they're going to spend

633
00:30:37,040 --> 00:30:39,840
Speaker 9: ten billion dollars next year is building up these data centers.

634
00:30:39,840 --> 00:30:41,480
Speaker 9: And keep in mind a couple of years back they

635
00:30:41,480 --> 00:30:44,720
Speaker 9: were spending two billion new year on capex. Now it's ten.

636
00:30:45,080 --> 00:30:47,880
Speaker 9: That's a real difference, and that's convincing investors that, hey,

637
00:30:47,880 --> 00:30:51,840
Speaker 9: they are actually building out their physical infrastructure. In the

638
00:30:51,880 --> 00:30:55,880
Speaker 9: AI era, everyone needs more cloud, everyone needs more of

639
00:30:55,920 --> 00:30:59,400
Speaker 9: this computing power, and Oracle does seem prime to actually

640
00:30:59,400 --> 00:31:01,480
Speaker 9: capture a lot of that demand. So people will be

641
00:31:01,520 --> 00:31:04,280
Speaker 9: watching whether these data centers do go up in Virginia

642
00:31:04,320 --> 00:31:05,200
Speaker 9: and other states.

643
00:31:05,440 --> 00:31:07,080
Speaker 3: I thought we didn't like it when companies spend a

644
00:31:07,080 --> 00:31:08,000
Speaker 3: lot of money on stuff.

645
00:31:09,000 --> 00:31:10,600
Speaker 9: We like it if it's going to come back and

646
00:31:11,240 --> 00:31:14,280
Speaker 9: give us something else, right, I mean, what was that time?

647
00:31:14,360 --> 00:31:15,760
Speaker 3: So they're gonna in mess all this money? When do

648
00:31:15,840 --> 00:31:17,280
Speaker 3: they make money off of the money they just spent.

649
00:31:17,880 --> 00:31:20,960
Speaker 9: Yeah, it seems like it'd be pretty quick, because if

650
00:31:21,000 --> 00:31:23,600
Speaker 9: you believe the executive's on the call, you know, executive

651
00:31:23,680 --> 00:31:27,160
Speaker 9: grand stand Sometimes what they say that demand outpaces supply.

652
00:31:27,240 --> 00:31:29,040
Speaker 9: They've been saying this for a while that with the

653
00:31:29,080 --> 00:31:32,520
Speaker 9: AI era, everyone's rushing to get more computing power. They

654
00:31:32,560 --> 00:31:35,440
Speaker 9: can't provide it. So the second these data centers go live,

655
00:31:35,960 --> 00:31:37,960
Speaker 9: in theory, they should be able to convert that into

656
00:31:38,000 --> 00:31:39,240
Speaker 9: revenue very quickly.

657
00:31:39,880 --> 00:31:42,520
Speaker 1: Are they good at doing that quickly relative to other companies?

658
00:31:43,480 --> 00:31:50,920
Speaker 9: They are known for ruthless operational efficiency, so they should

659
00:31:50,960 --> 00:31:53,320
Speaker 9: they should be good at this, right, I mean, of

660
00:31:53,360 --> 00:31:56,640
Speaker 9: course the market could change. Right, Everything looks rosy with

661
00:31:56,720 --> 00:31:58,880
Speaker 9: AI right now be able to train their own models.

662
00:31:59,520 --> 00:32:02,520
Speaker 9: Could we see a sea change? Hard to say, but

663
00:32:02,640 --> 00:32:05,880
Speaker 9: yesterday they got eighty billion in bookings. Once you book

664
00:32:05,920 --> 00:32:08,760
Speaker 9: you can't get out of it, so it's for a while.

665
00:32:09,080 --> 00:32:10,840
Speaker 3: So I as some find it's interesting if we're gonna

666
00:32:10,840 --> 00:32:15,040
Speaker 3: see cloud computing and AI be a cyclical industry or not, Like,

667
00:32:15,080 --> 00:32:17,480
Speaker 3: clearly it's a structural shift. But will we see a

668
00:32:17,520 --> 00:32:19,720
Speaker 3: ton of data centers come on at the same time,

669
00:32:19,880 --> 00:32:22,080
Speaker 3: like from different companies, and then their core prices go

670
00:32:22,120 --> 00:32:24,440
Speaker 3: down so the revenue isn't as hot, Like will it

671
00:32:24,440 --> 00:32:26,520
Speaker 3: be cyclical like chips are, for example, or not?

672
00:32:26,760 --> 00:32:30,160
Speaker 9: It's a good question. There's one rule of software compared

673
00:32:30,160 --> 00:32:32,880
Speaker 9: to hardware that software is a lot stickier, right, I mean,

674
00:32:32,960 --> 00:32:35,240
Speaker 9: you buy chips, you have them, you don't send me

675
00:32:35,280 --> 00:32:40,040
Speaker 9: to buy more. Once you start giving money to solvetware providers,

676
00:32:40,080 --> 00:32:43,000
Speaker 9: you plan on x amount of come you know, computational

677
00:32:43,040 --> 00:32:46,480
Speaker 9: power that usually doesn't go down. I mean, is there

678
00:32:46,520 --> 00:32:49,400
Speaker 9: a point where the growth will level off? Probably? I

679
00:32:49,480 --> 00:32:52,400
Speaker 9: struggle to see it being like hardware, where hey, everybody

680
00:32:52,400 --> 00:32:56,000
Speaker 9: bought computers this year. Now the computer makers are sol

681
00:32:56,080 --> 00:32:57,320
Speaker 9: because nobody wants to buy.

682
00:32:57,120 --> 00:32:59,360
Speaker 1: Anymore, and then it's all they've got you on the

683
00:32:59,360 --> 00:33:02,960
Speaker 1: subscriptions basically like what we all have at home. But now,

684
00:33:03,320 --> 00:33:05,400
Speaker 1: can you talk a little bit more about how Oracle

685
00:33:05,480 --> 00:33:06,520
Speaker 1: is benefiting from AI.

686
00:33:06,920 --> 00:33:07,680
Speaker 5: Yeah.

687
00:33:07,720 --> 00:33:09,320
Speaker 9: Well, and that's the big question for a lot of

688
00:33:09,360 --> 00:33:12,440
Speaker 9: software makers. Every software maker when they have positive results,

689
00:33:12,480 --> 00:33:16,000
Speaker 9: they say in their commentary, this is due to AID anything.

690
00:33:18,200 --> 00:33:21,680
Speaker 9: They call their new cloud version the Gen two AI.

691
00:33:22,560 --> 00:33:26,160
Speaker 9: Is everybody using it for AI? No, But what we

692
00:33:26,280 --> 00:33:29,040
Speaker 9: know is that AI requires a ton of computing power,

693
00:33:29,120 --> 00:33:32,600
Speaker 9: and Oracle has marketed there specifically for being good at

694
00:33:32,600 --> 00:33:35,320
Speaker 9: training AI models. And so there's reason to believe that

695
00:33:35,360 --> 00:33:39,840
Speaker 9: folks are upping their demand due to AI needs. But

696
00:33:40,400 --> 00:33:43,280
Speaker 9: is this more than a couple of percentage point difference.

697
00:33:43,800 --> 00:33:45,720
Speaker 9: Most analysts don't think so at this point.

698
00:33:45,960 --> 00:33:48,360
Speaker 3: So it's still the cloud. It's still it's the cloud,

699
00:33:48,400 --> 00:33:49,840
Speaker 3: the data centers building all that up.

700
00:33:50,000 --> 00:33:52,880
Speaker 9: Yeah, you know, think about you know, any company's running

701
00:33:52,920 --> 00:33:56,080
Speaker 9: all these you know, records, the terminal or anything like that.

702
00:33:56,240 --> 00:33:57,880
Speaker 9: Just it's more that kind of tradition stuff at this

703
00:33:57,920 --> 00:34:00,560
Speaker 9: point than it is training models, though that's probably part

704
00:34:00,560 --> 00:34:00,800
Speaker 9: of it.

705
00:34:01,320 --> 00:34:02,720
Speaker 3: I did want to point out too that maybe you

706
00:34:02,720 --> 00:34:04,760
Speaker 3: can comment on this one that Bank America, the reason

707
00:34:04,800 --> 00:34:07,760
Speaker 3: why they upgrade their earnings in part was because of

708
00:34:07,880 --> 00:34:11,760
Speaker 3: an investment cycle from big tech Microsoft, Amazon, Google, Meta

709
00:34:11,840 --> 00:34:14,200
Speaker 3: spending one hundred and eighty billion dollars in cap X.

710
00:34:14,239 --> 00:34:16,680
Speaker 3: They're in that reinvestment cycle, and I'm assuming you guys

711
00:34:16,719 --> 00:34:19,279
Speaker 3: like Oracle are going to be beneficiaries. Is that a

712
00:34:19,320 --> 00:34:20,040
Speaker 3: link I can make?

713
00:34:21,520 --> 00:34:24,960
Speaker 9: I think it is probably more that they're all riding

714
00:34:25,000 --> 00:34:29,759
Speaker 9: similar trends. You know, Amazon, Microsoft, they've spoken also in

715
00:34:29,800 --> 00:34:32,920
Speaker 9: recent quarters that their customers are really focused on cutting costs.

716
00:34:33,000 --> 00:34:36,439
Speaker 9: That for the most part, everybody had transported a bunch

717
00:34:36,440 --> 00:34:38,200
Speaker 9: of things to the cloud and then they wanted to

718
00:34:38,200 --> 00:34:41,360
Speaker 9: cut costs, and that behavior was starting to change, you know,

719
00:34:41,480 --> 00:34:44,600
Speaker 9: the twenty twenty four budgets got approved. They started feeling

720
00:34:44,600 --> 00:34:47,040
Speaker 9: good again, and the investment was going up. And so

721
00:34:47,080 --> 00:34:49,280
Speaker 9: I think it's one that they're all riding a similar wave.

722
00:34:49,440 --> 00:34:49,880
Speaker 9: I see.

723
00:34:50,080 --> 00:34:52,720
Speaker 1: You know, let me ask you something internally about Oracle.

724
00:34:53,000 --> 00:34:55,400
Speaker 1: Who's running the company? Is it Larry Ellison?

725
00:34:55,760 --> 00:34:57,840
Speaker 9: It's crazy, right because you think about somebody like a

726
00:34:57,880 --> 00:35:00,640
Speaker 9: Bill Gates that's the same generation. He hasn't been there

727
00:35:00,680 --> 00:35:03,480
Speaker 9: for a decade or more. But yeah, Larry's still running that.

728
00:35:03,520 --> 00:35:06,120
Speaker 9: I mean, he's his title is not CEO, but he's

729
00:35:06,200 --> 00:35:09,480
Speaker 9: chairman and his CTO he's you know, on the earnings

730
00:35:09,520 --> 00:35:13,279
Speaker 9: call talking back and forth with analysts. For someone of

731
00:35:13,320 --> 00:35:15,160
Speaker 9: his age and his generation, it's rare to see him

732
00:35:15,160 --> 00:35:18,799
Speaker 9: still running the company. But he continues to and there's

733
00:35:18,800 --> 00:35:21,239
Speaker 9: no reason to believe that will change anytime soon. So

734
00:35:21,560 --> 00:35:22,280
Speaker 9: it's interesting.

735
00:35:22,400 --> 00:35:25,279
Speaker 1: What's the deal with that, though, I mean, why is

736
00:35:25,320 --> 00:35:26,000
Speaker 1: he still around?

737
00:35:26,560 --> 00:35:29,440
Speaker 9: Haven't you know you found a company, it's your life.

738
00:35:29,520 --> 00:35:31,920
Speaker 9: And for the most part, investors still like him.

739
00:35:31,960 --> 00:35:33,400
Speaker 5: People still see.

740
00:35:33,239 --> 00:35:37,080
Speaker 9: Him as this kind of tech visionary type. You know,

741
00:35:37,320 --> 00:35:41,840
Speaker 9: every single analyst day he takes questions for multiple hours.

742
00:35:41,880 --> 00:35:44,680
Speaker 9: It always goes over time. It's almost like the you know,

743
00:35:44,760 --> 00:35:48,120
Speaker 9: Putin's annual address when he goes with her reporters.

744
00:35:47,960 --> 00:35:50,440
Speaker 3: It's great comparison. We definitely want to live with that comparison.

745
00:35:51,480 --> 00:35:53,560
Speaker 3: But nonetheless, I do feel like the cloud is not

746
00:35:53,600 --> 00:35:56,080
Speaker 3: in the sky, it is in Virginia, and data centers

747
00:35:56,080 --> 00:35:58,120
Speaker 3: in Virginia might be the best line I've ever heard,

748
00:35:58,120 --> 00:36:00,839
Speaker 3: which kind falling up yesterday when eq t he bought

749
00:36:00,840 --> 00:36:04,080
Speaker 3: the Midstream company, they did say that they're like, all

750
00:36:04,120 --> 00:36:05,839
Speaker 3: the data centers are going to be built in the South,

751
00:36:05,880 --> 00:36:07,480
Speaker 3: and we need the natural gas to power them, so

752
00:36:07,520 --> 00:36:09,319
Speaker 3: we're going to help send that there. Like I mean,

753
00:36:09,360 --> 00:36:12,319
Speaker 3: like that's a that's a narrative that continues to be

754
00:36:12,400 --> 00:36:14,960
Speaker 3: building within that A Brodi thanks a lot. Bertie Ford,

755
00:36:14,960 --> 00:36:19,680
Speaker 3: Bloomberg type reporter, super enjoy your commentary, and that was

756
00:36:19,719 --> 00:36:22,799
Speaker 3: really helpful. I have to say cloud infrastructure conversations can

757
00:36:22,920 --> 00:36:25,120
Speaker 3: really really daze me. I did not get dazed on that.

758
00:36:25,320 --> 00:36:27,680
Speaker 1: I did not because my stab body knows his onions,

759
00:36:27,719 --> 00:36:28,200
Speaker 1: as they.

760
00:36:28,040 --> 00:36:30,640
Speaker 3: Say, and he knows where the cloud is not in

761
00:36:30,680 --> 00:36:35,560
Speaker 3: the sky in Virginia.

762
00:36:34,400 --> 00:36:38,280
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

763
00:36:38,360 --> 00:36:41,880
Speaker 2: weekdays at ten am Eastern on applecar Play and Android

764
00:36:41,920 --> 00:36:44,680
Speaker 2: Auto with the Bloomberg Business at You can also listen

765
00:36:44,800 --> 00:36:47,879
Speaker 2: live on Amazon Alexa from our flagship New York station.

766
00:36:48,280 --> 00:36:52,880
Speaker 2: Just say Alexa play Bloomberg eleven thirty one.

767
00:36:52,920 --> 00:36:56,960
Speaker 3: Other stock that we're watching today is Cole's ticker kas

768
00:36:57,200 --> 00:36:59,640
Speaker 3: ort Kiss. That stock is down by about two and

769
00:36:59,640 --> 00:37:03,239
Speaker 3: a half. It's operating margin forecast for the year did

770
00:37:03,280 --> 00:37:07,360
Speaker 3: trail consensus estimates, and the midpoint of its annual earnings

771
00:37:07,360 --> 00:37:10,719
Speaker 3: target range also fell short. To be honest, I've been

772
00:37:10,760 --> 00:37:14,200
Speaker 3: to a Cole's once, but they send out.

773
00:37:14,000 --> 00:37:17,680
Speaker 6: The coals bucks, which you know, big discount. I'm surprised

774
00:37:17,719 --> 00:37:19,840
Speaker 6: at you you don't get that in the mail. No,

775
00:37:20,239 --> 00:37:22,200
Speaker 6: Cole's bucks. They're like little you know.

776
00:37:23,400 --> 00:37:26,240
Speaker 3: I mean, I appreciated the store when I went in there,

777
00:37:26,320 --> 00:37:28,359
Speaker 3: but I ordered a pair of shoes for my daughter

778
00:37:28,400 --> 00:37:30,440
Speaker 3: and they came in completely the wrong size. There was

779
00:37:30,480 --> 00:37:33,480
Speaker 3: a small chance I mis understood the size. But let's

780
00:37:33,520 --> 00:37:35,200
Speaker 3: just blame Coles. I've been there once.

781
00:37:35,480 --> 00:37:37,480
Speaker 1: I've never been Tucker.

782
00:37:38,000 --> 00:37:41,560
Speaker 3: Oh yeah, this is where Tucker shops my pants. That

783
00:37:42,480 --> 00:37:45,080
Speaker 3: maybe this is maybe this is Cole's problem. All right,

784
00:37:45,120 --> 00:37:50,799
Speaker 3: let's get more insight. They need Jen and myself to get.

785
00:37:52,280 --> 00:37:52,480
Speaker 8: There.

786
00:37:52,680 --> 00:37:55,000
Speaker 6: Nobody would shop at a place I go shopping.

787
00:37:55,239 --> 00:37:58,319
Speaker 3: No, just that they also need us to go All right,

788
00:37:58,360 --> 00:38:00,560
Speaker 3: Mary Ross, Gilbert b But we'reg intelligence in your equity

789
00:38:00,560 --> 00:38:03,760
Speaker 3: analyst who covers retail joins us. Now, is that the problem?

790
00:38:03,840 --> 00:38:05,319
Speaker 3: Jenna and I need to go shop there and not

791
00:38:05,440 --> 00:38:06,240
Speaker 3: just John Tucker.

792
00:38:08,280 --> 00:38:11,920
Speaker 12: Well, Jena and Alex. They do have so Fora, and

793
00:38:12,000 --> 00:38:15,280
Speaker 12: I'm sure that Sofa carries the brands that you care about.

794
00:38:15,400 --> 00:38:19,759
Speaker 12: So so for has been a key driver for Coals,

795
00:38:19,280 --> 00:38:23,000
Speaker 12: and that's the reason why their sales aren't that bad.

796
00:38:23,480 --> 00:38:25,040
Speaker 12: You know, if you look at the comp sales, they

797
00:38:25,080 --> 00:38:28,120
Speaker 12: fell one percent in the quarter at the stores, so

798
00:38:28,239 --> 00:38:31,240
Speaker 12: total comp sales were down four point three percent, worse

799
00:38:31,280 --> 00:38:35,680
Speaker 12: than consensus three percent estimate, but digital sales were down

800
00:38:35,880 --> 00:38:40,360
Speaker 12: ten percent. And now going forward, after we get beyond

801
00:38:40,600 --> 00:38:44,120
Speaker 12: the first quarter in twenty twenty four, we should see

802
00:38:44,160 --> 00:38:48,520
Speaker 12: the overall comp sales do better. One with this SO

803
00:38:48,600 --> 00:38:53,359
Speaker 12: for initiative, because the comparable sales for SO fora is

804
00:38:53,920 --> 00:38:57,000
Speaker 12: was up twenty five percent in the fourth quarter, so

805
00:38:57,120 --> 00:39:00,640
Speaker 12: we've been seeing double digit increases there, so that will help.

806
00:39:00,680 --> 00:39:03,240
Speaker 12: But there's a number of other initiatives, including the news

807
00:39:03,280 --> 00:39:06,799
Speaker 12: today that they're going to be putting Babies or US

808
00:39:06,840 --> 00:39:10,440
Speaker 12: shops into about two hundred stores by the fall, and

809
00:39:10,480 --> 00:39:12,719
Speaker 12: that really fills a void in the market. I'm sure

810
00:39:12,760 --> 00:39:15,719
Speaker 12: you're aware that. Well what happened with Bye by a

811
00:39:15,719 --> 00:39:19,520
Speaker 12: Baby and what about Member Toys r US that used

812
00:39:19,520 --> 00:39:22,080
Speaker 12: to be a go to place when you were expecting

813
00:39:22,200 --> 00:39:25,120
Speaker 12: or how you know a baby you could get go there,

814
00:39:25,239 --> 00:39:29,480
Speaker 12: get your strollers, get all your products there. So that

815
00:39:29,680 --> 00:39:32,360
Speaker 12: will also help be a driver, and along with the

816
00:39:32,480 --> 00:39:36,120
Speaker 12: number of a number of initiatives that they're working on,

817
00:39:36,239 --> 00:39:38,200
Speaker 12: including the home category.

818
00:39:38,840 --> 00:39:42,000
Speaker 1: But I guess if we talk about what's good in

819
00:39:42,040 --> 00:39:44,879
Speaker 1: their future, it sounds like it's a lot of stuff.

820
00:39:44,520 --> 00:39:46,320
Speaker 8: That is not Coals.

821
00:39:45,960 --> 00:39:50,040
Speaker 1: It's so far it's babies are us. What's the issue

822
00:39:50,160 --> 00:39:52,840
Speaker 1: with the fundamental core coals offering.

823
00:39:54,120 --> 00:39:57,760
Speaker 12: So they're revamping the merchandise because that was part of it,

824
00:39:57,800 --> 00:40:01,160
Speaker 12: is just not having the right assortment. They're redoing shoes

825
00:40:01,680 --> 00:40:04,120
Speaker 12: and they're going to be bringing in sketchers. They already

826
00:40:04,120 --> 00:40:07,439
Speaker 12: have Nike, they have Audi Doos and now you're also

827
00:40:07,560 --> 00:40:10,799
Speaker 12: going to see them bring in some youth brands. So

828
00:40:10,800 --> 00:40:16,360
Speaker 12: they're going to bring in Quicksilver, Errol, Postall Madden limited

829
00:40:16,400 --> 00:40:19,120
Speaker 12: to in Roxy, So those are also going to be

830
00:40:19,239 --> 00:40:22,240
Speaker 12: helping on the apparel sides. So with the overall revamp

831
00:40:22,320 --> 00:40:24,920
Speaker 12: that they're doing on apparel, and some of their private

832
00:40:25,000 --> 00:40:29,200
Speaker 12: brands are actually they resonate pretty well, like for in Babies,

833
00:40:29,239 --> 00:40:33,640
Speaker 12: they have Jumping Beans that does really well. So it's

834
00:40:33,680 --> 00:40:35,600
Speaker 12: really a host of a lot of things that they've

835
00:40:35,600 --> 00:40:37,359
Speaker 12: done with the stores. If you go in them now,

836
00:40:37,400 --> 00:40:42,120
Speaker 12: they're a lot brighter. The culture there has really been boosted.

837
00:40:42,200 --> 00:40:45,040
Speaker 12: We've noticed a difference just from a year ago on

838
00:40:45,239 --> 00:40:49,160
Speaker 12: how much the stores have been transformed, and so that's helping.

839
00:40:50,280 --> 00:40:52,640
Speaker 3: Yeah, that's so interesting. When I went and I was

840
00:40:52,680 --> 00:40:55,279
Speaker 3: looking in you know, kids grow like weeds, right my

841
00:40:55,360 --> 00:40:57,080
Speaker 3: daughter's nines. I was looking for pants and I was like,

842
00:40:57,120 --> 00:40:59,200
Speaker 3: oh my god, they have Nike. I was like, genuinely

843
00:40:59,239 --> 00:41:01,880
Speaker 3: like it. I had lots of those moments whilst walking around.

844
00:41:02,360 --> 00:41:03,520
Speaker 1: I'm gonna have to check it out.

845
00:41:04,480 --> 00:41:06,920
Speaker 6: It's also a place where I think you could still

846
00:41:06,960 --> 00:41:08,880
Speaker 6: bring back your Amazon stuff.

847
00:41:09,040 --> 00:41:13,040
Speaker 3: Yes, yes, yes, yes that too. That's an excellent point.

848
00:41:13,280 --> 00:41:16,160
Speaker 3: So okay, we're listing the good stuff. So Mary, why

849
00:41:16,800 --> 00:41:19,560
Speaker 3: why is a stock down two point six percent? Like,

850
00:41:19,800 --> 00:41:22,640
Speaker 3: I just feel like it's getting beat up a little bit,

851
00:41:22,760 --> 00:41:26,960
Speaker 3: and I'm wondering then the why.

852
00:41:25,440 --> 00:41:28,200
Speaker 12: You know, So you were you raised a good point.

853
00:41:28,520 --> 00:41:30,520
Speaker 12: You you brought up earlier that they're going to be

854
00:41:30,560 --> 00:41:35,319
Speaker 12: missing consensus estimates for operating margin next year. And part

855
00:41:35,360 --> 00:41:37,759
Speaker 12: of that is because we had a new ruling that

856
00:41:37,800 --> 00:41:44,319
Speaker 12: came out from the Consumer Financial Bureau saying okay, we're

857
00:41:44,320 --> 00:41:47,000
Speaker 12: going to cap late fees on credit cards to eight dollars.

858
00:41:47,640 --> 00:41:50,520
Speaker 12: So when that's going to have a negative impact for

859
00:41:50,600 --> 00:41:54,280
Speaker 12: department stores generally, because they tend to have the biggest exposure,

860
00:41:54,560 --> 00:41:57,160
Speaker 12: and so Coles was one of them, they generate a

861
00:41:57,160 --> 00:42:01,279
Speaker 12: fair amount of income from their credit card portfolio, and

862
00:42:01,360 --> 00:42:04,640
Speaker 12: so they guided today that that income will be down

863
00:42:04,760 --> 00:42:07,719
Speaker 12: mid teams and that's about one hundred and thirty five

864
00:42:07,840 --> 00:42:10,839
Speaker 12: ish million is what we're estimating the impact this year.

865
00:42:11,160 --> 00:42:14,879
Speaker 12: And that's not the fullier impact, but they do they

866
00:42:14,920 --> 00:42:18,560
Speaker 12: introduced a co branded card and in twenty twenty five

867
00:42:18,600 --> 00:42:20,560
Speaker 12: they hope to be able to offset the loss of

868
00:42:20,640 --> 00:42:24,840
Speaker 12: income that you know they'll experience. But we'll see. But

869
00:42:24,880 --> 00:42:26,960
Speaker 12: that's one of the reasons why you're going to see

870
00:42:26,960 --> 00:42:29,840
Speaker 12: some pressure on the margin side is due to that

871
00:42:31,760 --> 00:42:33,600
Speaker 12: that ruling that came out.

872
00:42:34,560 --> 00:42:37,880
Speaker 1: So what's the consumer favorite these days? I mean, we

873
00:42:37,960 --> 00:42:41,000
Speaker 1: see you've listed all these interesting brands turning up at Coal's,

874
00:42:41,040 --> 00:42:43,080
Speaker 1: but is that enough to get the consumers through the door,

875
00:42:43,200 --> 00:42:45,080
Speaker 1: or you know, can you think more broad Can you

876
00:42:45,120 --> 00:42:47,240
Speaker 1: tell us a little bit more broadly about the retail space.

877
00:42:47,320 --> 00:42:50,240
Speaker 1: Is there are there other shops that consumers are preferring

878
00:42:50,280 --> 00:42:50,840
Speaker 1: these days?

879
00:42:52,800 --> 00:42:55,360
Speaker 12: Yeah, well, clearly off price and when you think about

880
00:42:55,400 --> 00:42:59,200
Speaker 12: what's happening here with Coals, they're buying more frequently, which

881
00:42:59,239 --> 00:43:01,560
Speaker 12: is more of an off price strategy. They're all the

882
00:43:01,560 --> 00:43:05,480
Speaker 12: buying occurs on a weekly Basis's ing Tom Kingsbury who's

883
00:43:05,520 --> 00:43:09,920
Speaker 12: the CEO. He is the one who turned Burlington Stores

884
00:43:10,080 --> 00:43:13,359
Speaker 12: into the fast growing off price retailer that it is,

885
00:43:13,760 --> 00:43:16,680
Speaker 12: so has he lends a lot of credibility and a

886
00:43:16,760 --> 00:43:19,920
Speaker 12: number of the initiatives that he's already employed is already

887
00:43:20,040 --> 00:43:25,880
Speaker 12: demonstrating improvement. And so yes, you're seeing the consumer, especially

888
00:43:25,880 --> 00:43:28,880
Speaker 12: the consumer that's attracted to Coals. They also shop at

889
00:43:28,920 --> 00:43:31,600
Speaker 12: off price, and off price has been a big winner

890
00:43:31,760 --> 00:43:35,399
Speaker 12: for that value consumer. And then other retailers that are

891
00:43:35,400 --> 00:43:39,400
Speaker 12: doing well are those that are executing and really delivering

892
00:43:39,400 --> 00:43:43,000
Speaker 12: on the merchandise. And so I'm speaking to apparel retailers

893
00:43:43,040 --> 00:43:47,759
Speaker 12: like an Abercrombie Urban Outfitters with their anthropology and their

894
00:43:47,800 --> 00:43:51,640
Speaker 12: free people brands. So it's really it's kind of a

895
00:43:51,680 --> 00:43:54,760
Speaker 12: tale of two stories. Those that are executing are delivering

896
00:43:54,800 --> 00:43:58,640
Speaker 12: on results, and here we're in a transition phase at

897
00:43:58,640 --> 00:44:00,759
Speaker 12: Coals and they're hoping to be able to turn the

898
00:44:00,880 --> 00:44:04,840
Speaker 12: tide of declining sales for this department store operator. And

899
00:44:04,880 --> 00:44:07,920
Speaker 12: they do have one benefit. They're off the mall, not

900
00:44:08,160 --> 00:44:11,200
Speaker 12: in the mall, and that that makes them different. So

901
00:44:11,239 --> 00:44:13,799
Speaker 12: it's easier, you know, to get into the parking lot,

902
00:44:13,840 --> 00:44:15,799
Speaker 12: get into the store, and get you know and get

903
00:44:15,800 --> 00:44:19,480
Speaker 12: out again. So it's easier access. And like you pointed out,

904
00:44:19,520 --> 00:44:22,799
Speaker 12: they have Amazon returns. It's not additive to sales, but

905
00:44:22,840 --> 00:44:25,840
Speaker 12: it does bring in traffic. True, and then more importantly

906
00:44:25,960 --> 00:44:28,200
Speaker 12: so FORA has been the biggest driver.

907
00:44:28,560 --> 00:44:32,200
Speaker 3: True, really good stuff. Really appreciate that, Mary Ross Gilbert,

908
00:44:32,239 --> 00:44:35,200
Speaker 3: Bloomberg Intelligence and Equity analysts covering retail. Right, you go

909
00:44:35,239 --> 00:44:38,240
Speaker 3: return something, you go buy something. I mean that's literally

910
00:44:38,400 --> 00:44:40,960
Speaker 3: my mom's entire life shopping.

911
00:44:41,120 --> 00:44:42,960
Speaker 1: It's a very solid business strategy and.

912
00:44:43,000 --> 00:44:44,839
Speaker 3: Return it and then I'm going to buy something when

913
00:44:44,840 --> 00:44:45,560
Speaker 3: I'm also there.

914
00:44:45,840 --> 00:44:50,360
Speaker 2: This is the Bloomberg Intelligence Podcast, available on Apples, Spotify,

915
00:44:50,560 --> 00:44:53,480
Speaker 2: and anywhere else you will get your podcasts. Listen live

916
00:44:53,560 --> 00:44:57,160
Speaker 2: each weekday ten am to noon Eastern on Bloomberg dot com,

917
00:44:57,280 --> 00:45:00,640
Speaker 2: the Ihar radio app, tune In, and the Bloomberg Business app.

918
00:45:00,800 --> 00:45:03,800
Speaker 2: You can also watch us live every weekday on YouTube

919
00:45:04,000 --> 00:45:05,880
Speaker 2: and always on the Bloomberg terminal