Speaker 1: This is Bloomberg Business Week. I'm Charle Masser and I'm
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Speaker 1: YouTube search Bloomberg Global News. We had many headlines today.
Speaker 1: We talked about states and cities around the US having
Speaker 1: a growing surplus of COVID nineteen vaccines, and then you
Speaker 1: had that headline coming out of CNBC, specifically the CEO
Speaker 1: of Fieser saying what we might need a third vaccine. Yeah,
Speaker 1: that's right, the CEO saying, with any year potentially need
Speaker 1: a third vaccine. It's something that we've talked a lot
Speaker 1: and asked a lot of our guests about what are
Speaker 1: the chances that this is something we are going to
Speaker 1: have to continue to inoculate ourselves against Yeah, exactly part
Speaker 1: of kind of our annual taking care of ourselves. Also,
Speaker 1: don't forget that late yesterday afternoon you had US Public
Speaker 1: Health Advisors concluding a meeting on J and J's COVID
Speaker 1: nineteen vaccine without a vote no vote, effectively extending that
Speaker 1: pause on its use while they seek more data on
Speaker 1: a rare clotting side effects. So let's get our daily
Speaker 1: check on COVID and the vaccine rollout. Dr Anna durban
Speaker 1: is Professor of International Health at the Johns Hopkins Bloomberg
Speaker 1: School of Public Health, of course, supported by Michael R. Bloomberg, founder,
Speaker 1: Bloomberg LP and Bloomberg Philanthropies. She's on the phone in Maryland.
Speaker 1: Dr Durbin, nice to have you here with us. How
Speaker 1: are you And when you look out at the COVID
Speaker 1: and vaccine rollout horizon, how does it look to you? Well,
Speaker 1: thank you very much for having me today. I think
Speaker 1: we can look at the vaccine rollout really from the
Speaker 1: point of the United States and then globally, because I
Speaker 1: think we're in two very different circumstances, particularly with the
Speaker 1: pause on the J and J vaccine and then the
Speaker 1: restrictions on news that Europe has put in place for
Speaker 1: the Astra's NFA vaccine, so so so go ahead divide
Speaker 1: it for us. The US, I'm assuming you're saying, doing
Speaker 1: pretty good and the rest of the world not so good. Exactly.
Speaker 1: In the US were very, very lucky to have options.
Speaker 1: We have the madinal vaccine, we have the Visor vaccine,
Speaker 1: we have J and J which has been UM given
Speaker 1: EAY but is currently on pause. And then we have
Speaker 1: a couple of other vaccines that are going to go
Speaker 1: before the FDA in the Nazi distant future, one of
Speaker 1: which is Astra Zeneca. But the rest of the world
Speaker 1: has really um has really depended heavily on different vaccines,
Speaker 1: on the astro Zenica vaccine, and then UM of course
Speaker 1: there's the vaccine Sputnik five from Russian and some inactivated
Speaker 1: vaccines that have been made in different countries. UM And
Speaker 1: with the concerns about the clotting, although I will and
Speaker 1: I do want to emphasize that it's a very rare
Speaker 1: um event, but it can be devastating, which is why
Speaker 1: I think it's appropriate that CDC and the Advisory committees
Speaker 1: are sort of taking a pause and getting more information
Speaker 1: to help us better understand what's going on, but that
Speaker 1: has made less vaccine available, um here in the US,
Speaker 1: but also I think globally. Hey, Dr Derby, I want
Speaker 1: to we have a lot to cover here and I
Speaker 1: really want to hit on this idea of when those
Speaker 1: who don't qualify for a vaccine will be able to
Speaker 1: get vaccinated, specifically children, because we learned today, uh from
Speaker 1: the Mercury News out in California, that Stanford is starting
Speaker 1: to test visors vaccine and babies and young children. Does
Speaker 1: this look promising to you? It looks very promising. And
Speaker 1: I want to say also Maderna has those pediatric childs
Speaker 1: planned and has started as well, not quite as young
Speaker 1: as Visor, but still in children, and I think that's
Speaker 1: very promising. I think our expectations are that we're going
Speaker 1: to start to see children being vaccinated probably late summer,
Speaker 1: early fall. Young six months is what they're testing. But yeah,
Speaker 1: they probably won't start in six months. Um well yeah,
Speaker 1: go ahead. Well I'm just wondering how you know non
Speaker 1: pandemic vaccine trials go for children as young as six months.
Speaker 1: I mean, this is the type of thing that needs
Speaker 1: they need to be followed for a long period of
Speaker 1: time to make sure there aren't effects that that come
Speaker 1: after years, right right, Well, you know it's interesting this,
Speaker 1: you know we this, uh, the way we've been testing
Speaker 1: these vaccines and children is the way we've been testing
Speaker 1: vaccines in children all along. So we always with children,
Speaker 1: were very very careful and start testing in adults first
Speaker 1: for safety, and then go down in age, gradually looking
Speaker 1: at safety and then of course immunogenicity. So this process
Speaker 1: is really not any different for the COVID vaccines. UM.
Speaker 1: I think what's interesting is of course that we're starting
Speaker 1: vaccination in adults as opposed to children. Most vaccines were
Speaker 1: used to being given to children. UM. And we will
Speaker 1: proceed carefully, so the rollout will be for instance, in
Speaker 1: adolescents and then going down to younger children, for instance
Speaker 1: five to twelve years of age, and then going down.
Speaker 1: We're not going to start in the sixth month. Dr Durvin.
Speaker 1: Let me ask you. We've got about a minute and
Speaker 1: we're gonna do some news and we'll come back and
Speaker 1: continue with you. But I can't help but feel there
Speaker 1: are people coming up to you, maybe in other's and
Speaker 1: just saying, see, I told you we did this too fast.
Speaker 1: Look at what's going on with the J and J vaccine.
Speaker 1: What do you say to them and just got about
Speaker 1: a minute. Oh, I say this this is showing us
Speaker 1: that our safety surveillance system works. So this is a
Speaker 1: very very rare event, you know, one in a million,
Speaker 1: that's not going to be picked up in clinical trials.
Speaker 1: But what we do have is what we call post
Speaker 1: life or post use surveillance for safety. And it was
Speaker 1: picked up very quickly, you know, within a month of
Speaker 1: the eu A being given. So I think what this
Speaker 1: shows this is that our safety surveillance works were able
Speaker 1: to pick up a very very rare event. We've you know,
Speaker 1: looked at it. Safety experts have said, okay, let's take
Speaker 1: a step back, let's pause, let's get more information, and
Speaker 1: we'll proceed from there. So I say, it shows that
Speaker 1: the system is working, that we picked it up, we're
Speaker 1: dealing with it, we're going to see what's happening, and
Speaker 1: we'll proceed from there. Let's get right back to Dr
Speaker 1: Anna Durbin, Professor of International Health at the Johns Hopkins
Speaker 1: Bloomberg School of Public Health, joins us on the phone
Speaker 1: from Baltimore. The Johns Hopkins Bloomberg School of Public Health
Speaker 1: is supported by Michael or Bloomberg, founder of Bloomberg LP
Speaker 1: and Bloomberg Philanthropies. Dr Durbin, I want to talk a
Speaker 1: little bit about data and numbers. We did just here
Speaker 1: from Charlie from Dr Amish Adulga, one of your colleagues
Speaker 1: at the Bloomberg School of Public Health. He comes on
Speaker 1: quick Take each week, and one thing that he's talked
Speaker 1: about is that we shouldn't necessarily judge things by the
Speaker 1: way that, uh, the cases are going up still, because
Speaker 1: it's not necessarily the right metric anymore because so many
Speaker 1: vulnerable populations have been inoculated. So even though we're seeing
Speaker 1: a rising cases, we're actually not seeing a rise in
Speaker 1: deaths and potentially a fourth wave here. Um, what do
Speaker 1: you make of the fact that cases are going up
Speaker 1: but but deaths are going down. Well, I think he's
Speaker 1: exactly right, and I think there's a couple of things
Speaker 1: that we look at to sort of explain why the
Speaker 1: numbers of cases are going up. We've been in this
Speaker 1: pandemic a year. The vaccine rollout has started, and I
Speaker 1: think people are are becoming more optimistic and sort of
Speaker 1: seeing light at the end of the tunnel and going
Speaker 1: out doing more UM, maybe wearing masks a little bit less.
Speaker 1: And then we also have the emergence, of course of
Speaker 1: the B one one seven variant, particularly in Michigan UM,
Speaker 1: which we know is more transmissible. The good news is
Speaker 1: that most of the vulnerable population, or a great deal
Speaker 1: of the vulnerable population, has been vaccinated. So we are
Speaker 1: seeing fewer deaths, fewer hospitalizations, which is very very good news.
Speaker 1: And I think that also always brings me back to
Speaker 1: when we talk about vaccine efficacy, and you know, people
Speaker 1: try to compare numbers, and I think what gets lost
Speaker 1: in some of that discussion is that what we're really
Speaker 1: trying to prevent is diseased. We're trying to prevent severe disease,
Speaker 1: prevent hospitalization, prevent death. And I think as all adults
Speaker 1: moved towards being vaccinated, we're really going to see that
Speaker 1: take effect. It does also feel like Dr Durbin at
Speaker 1: the we're getting to a point where we have this
Speaker 1: toolkit of things to deal with the virus. UH, We've
Speaker 1: got several vaccines right preventing people from getting the worst
Speaker 1: of COVID cases and keeping them out of the hospitals.
Speaker 1: I mean, we've really come a long way in thirteen months.
Speaker 1: We have come a tremendous way in in thirteen months.
Speaker 1: I think it's really unprecedented, and I think we've learned
Speaker 1: a lot. We've learned a lot about, um, what to
Speaker 1: do in a pandemic, what we've done right, what we've
Speaker 1: done wrong. I think how important leadership and messaging is
Speaker 1: around different public health practices. And it's interesting because they
Speaker 1: have a lot of colleagues and friends who say, even
Speaker 1: when the pandemic is over, they're going to wear a
Speaker 1: mask when they go to the grocery store because they
Speaker 1: saw the effect on influences and other things. So, you know,
Speaker 1: we've come a long way, and um, it's it's we
Speaker 1: still have a ways to go, but I think I
Speaker 1: think we're going to get there, and I think the
Speaker 1: summer's going to look a lot better for everyone. There's
Speaker 1: this exclusive story that we talked about a little earlier
Speaker 1: by our own Anna Edney and Drew Armstrong talking about
Speaker 1: unused vaccines piling up across the US as some regions resist.
Speaker 1: How do we get that last portion of Americans, those
Speaker 1: ones who are hesitant to get the vaccine and what
Speaker 1: happens if we don't. Let's start with what happens if
Speaker 1: we don't like what happens here? So I think what
Speaker 1: happens if we don't As we continue to see transmission, UM,
Speaker 1: we may see more variants arise, and I think what
Speaker 1: that's going to do is lead to UM requiring or
Speaker 1: or having to be vaccinated. UM again, get a third shot, UM,
Speaker 1: or even you know, a year from now, get another shot,
Speaker 1: because as long as we have ongoing transmission, I think
Speaker 1: we're going to keep vaccinating those people who are willing
Speaker 1: to get vaccinated. And I think, you know, that's where
Speaker 1: we get to the global picture, the worldwide picture. UM.
Speaker 1: You know, the rest of the world is not going
Speaker 1: to be vaccinated for quite a while. And that's why
Speaker 1: I think we are going to need a third shot,
Speaker 1: a booster shot, if you will, because as long as
Speaker 1: the rest of the world is not vaccinated, or as
Speaker 1: long as we have ongoing transmission, we're going to need vaccination.
Speaker 1: And probably though also every year just got thirty seconds here, yeah,
Speaker 1: well every year for a while and control this pandemic,
Speaker 1: and we'll see there may be emergence of other coronaviruses.
Speaker 1: But I think you're right, we'll be vaccinated for at
Speaker 1: least the next year or two. All right, great day,
Speaker 1: get some time with you. Thank you so much. I
Speaker 1: know you guys are all busy. Dr Anna Durbin. She's
Speaker 1: Professor of International Health at Johns Hopkins Bloomberg School of
Speaker 1: Public Health, of course, supported by Michael R. Bloomberg, founder,
Speaker 1: Bloomberg ALP and Bloomberg Philanthropies. On the phone from Maryland.
Speaker 1: I like the idea of, you know, thinking about this
Speaker 1: from the perspective of we don't have to get a
Speaker 1: booster every year for the rest of our lives, and
Speaker 1: maybe this is something well we have to do for
Speaker 1: a couple of years or even a year. Yeah, until
Speaker 1: the next virus. Oh, come on, Carl, I was gonna
Speaker 1: end on a good note a little. Yeah, you you
Speaker 1: think a lot about that next pandemic. This is Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes. Tim
Speaker 1: Stinovich from Bloomberg Radio. Well. President Biden is among the
Speaker 1: latest to ignite or reignite the global effort to create
Speaker 1: a united front to prevent multinational corporations from playing one
Speaker 1: country off against another million. It's all about Tim dodging taxes. Yeah,
Speaker 1: they're big question is, how do you do this in
Speaker 1: a way that every gets everyone around the world to
Speaker 1: work together and avoid what's been happening really since the
Speaker 1: nineteen eighties. Combine moment is what we need. Hey, this
Speaker 1: is a story in the magazine this week. Let's get
Speaker 1: more on it. Bloomberg business Week Economics editor Peter coy
Speaker 1: on the phone in New Jersey, along with Bloomberg Business
Speaker 1: Week editor Joel Webber on the access line in Brooklyn. Joel,
Speaker 1: we love our tax stories here at Bloomberg. Yeah, and
Speaker 1: we love it so much. Business Week made this the
Speaker 1: International UH cover because I thought it was really an
Speaker 1: interesting insight into sort of a pretty significant change in
Speaker 1: the zeitgeist around corporate taxes and UM. What we've been
Speaker 1: seeing UM is sort of an unfrustated moment where rich
Speaker 1: nations and poor nations are are sort of getting on
Speaker 1: a similar page, which is we need to raise corporate
Speaker 1: taxes and UH sort of end up penalizing those countries,
Speaker 1: the the Irelands of the world that attempts to sort
Speaker 1: of like set a lower bar. So so Peter talked
Speaker 1: to us more about this, this race against UH, the
Speaker 1: UH taxes going to zero right, sort of the race
Speaker 1: against the race to the bottom. Yeah, exactly, there you go.
Speaker 1: There's a natural tendency for countries to seek advantage by
Speaker 1: cutting rates because then companies will shift their profits to
Speaker 1: your jurisdiction and you'll be able to get something out
Speaker 1: of it. It might be a low rate, but it's
Speaker 1: better than you would have gotten if it's probably weren't
Speaker 1: there at all. Sometimes it's real operations, factory and the
Speaker 1: song which is semi legit. But sometimes it's purely really
Speaker 1: hoarded profits. It'll be like you'll you'll say, all your
Speaker 1: patents are in the Cayman Islands because of the zero
Speaker 1: corporate income tax rate. And these games have been going
Speaker 1: on for years. Governments have been trying to plug the holes,
Speaker 1: but the corporations have smart tax lawyers, and every time
Speaker 1: one hole gets plugged, another one gets opened. So we've
Speaker 1: had this, as we say, race to the bottom going
Speaker 1: on for a long time, and corporate income tax from
Speaker 1: it affects domestic tax rates as well, because you can't
Speaker 1: tax your own companies very highly if they're well aware
Speaker 1: that they can escape it by going abroad. So there's
Speaker 1: an impact on the sovereign government. Yeah, you call it
Speaker 1: a game of cat and mouse. Also, I'm wondering about incentives, though, Peter,
Speaker 1: because there is this incentive for for one country to
Speaker 1: attract a business, of course, So how do you align
Speaker 1: incentives in a way that prevents companies or countries excuse me,
Speaker 1: from creating policies that undercut some sort of international ena. Well,
Speaker 1: first of all, there's no rule that says you can't
Speaker 1: have a low tax rate the But what it does
Speaker 1: say is that they're called it the guilty rule, which
Speaker 1: I love. It's spelled g I L T I, but
Speaker 1: it's pronounced guilty as in caught you cut, you cheating
Speaker 1: that if it's uh, it's intangible income such as from patents, trademarks,
Speaker 1: so on that, and it's in a low tax jurisdiction.
Speaker 1: The the U S or any other higher tax jurisdiction
Speaker 1: can tax it up to a certain level above what
Speaker 1: the local jurisdiction chooses to tax. And once you have
Speaker 1: that in place, it's sorty moves the incentive to move
Speaker 1: to the low tax jurisdiction because the taxes are going
Speaker 1: to follow you wherever you go. So, Peter, the one
Speaker 1: big change here, obviously is the Biden administration, And I'm
Speaker 1: want to talk about that, and why don't we use
Speaker 1: Kimberly classing as a way to talk about that? Who
Speaker 1: is she Kimberly Classing? I interviewed her for an article
Speaker 1: in seventeen kind of about this theme, but at the
Speaker 1: time there wasn't a lot of progress, and she was
Speaker 1: sort of a voice crying in the wilderness. Shosa economics
Speaker 1: professor Read College in Portland. She's said, you know, well,
Speaker 1: I believe Joel uh And and Read is also you know,
Speaker 1: the left of left. Yeah, it is. It's a kind
Speaker 1: of a lefty school. Since then, she moved to u
Speaker 1: c l A Law school in January. This January, five
Speaker 1: days after she arrived there, she got the call from
Speaker 1: the White House, or not the White House yet, but
Speaker 1: the incoming administration saying we want you on our team
Speaker 1: at Treasury. So suddenly, this this person who was kind
Speaker 1: of as josh as on the outside looking in, is
Speaker 1: very much on the inside looking out and helping make policy,
Speaker 1: testifying before Congress, and and helping wholly the Biden administration,
Speaker 1: which under Trump had been sort of resisting some of
Speaker 1: the efforts by the O E. C. D in the
Speaker 1: Group of is now very much in concert with those
Speaker 1: other countries and with the poor countries as well. There's
Speaker 1: a hundred thirty nine rich and poor countries together trying
Speaker 1: to come up with a joint policy. So and how
Speaker 1: has the Biden approach been received abroad? It's it's it's
Speaker 1: been received well because there are a lot of countries that,
Speaker 1: you know, they may be engaged to the race to
Speaker 1: the in the race to the bottom, but they don't
Speaker 1: like it. They'd much rather have a race to the top,
Speaker 1: or at least some kind of stability. So, for example,
Speaker 1: the Finance Minister of France, Bruno lemaire Um, has basically said,
Speaker 1: you know, this is looking like it could be a
Speaker 1: revolution attacks revolution, that's what he called it. So yeah,
Speaker 1: the overall they don't agree with everything the Biden administration
Speaker 1: wants to do, but they sense tonally that they're they're
Speaker 1: more in sync than they have been in a long time. Well,
Speaker 1: I kidded coming into this, Peter, that kind of a
Speaker 1: Kumbaya moment when it comes to taxes globally, I feel
Speaker 1: like we're just this time where it's just hard to
Speaker 1: get anything done and get everybody to cooperate on something.
Speaker 1: So likely that we do ultimately get something done and
Speaker 1: how quickly if we do. I do believe that it's
Speaker 1: likely something is going to happen here. There have been
Speaker 1: previous efforts. So there was another effort that was concluded
Speaker 1: in that went some of the way towards what we're
Speaker 1: getting at now, but they felt it wasn't enough, so
Speaker 1: they went back to the drawing board and they had
Speaker 1: the second effort, which is more comprehensive, more countries involved.
Speaker 1: So there was a great quote from Pascal's sentim with
Speaker 1: a director of OAS Center for Tax Policy and Administration
Speaker 1: who said, you know, there's no plan B if the
Speaker 1: project fails, but there's a plan C chaos. So Peter,
Speaker 1: if if something does happen very briefly, we only have
Speaker 1: thirty seconds left. Um, what does it mean for the
Speaker 1: bottom line of for U S companies and global companies.
Speaker 1: Are they going to see higher taxes or they're going
Speaker 1: to have to have these lawyers come in and find loopholes.
Speaker 1: Bottom line is that it won't be quite so easy
Speaker 1: to find loopholes, so taxes will go up modestly, But
Speaker 1: but the US companies will not be affected. US headquarter
Speaker 1: mostly net will be less affected because they have a
Speaker 1: harder higher tax race to start with, it's the companies
Speaker 1: that have been most effectively escaping taxation who will fule
Speaker 1: at the most, which does include some of us companies. Well,
Speaker 1: it's a great read and something that's certainly has caught
Speaker 1: everybody's attention. Anything with taxes. Um, Peter, thank you, Thank you.
Speaker 1: Peter Koy, Economics editor, the international cover a Bloomberg Business
Speaker 1: Week this week, and Joe Weber are thanks to you
Speaker 1: as well. This is Bloomberg Business Week with Carol Messer
Speaker 1: and Bloomberg Quick Takes. Tim Stinovic from Bloomberg Radio. Well,
Speaker 1: we did have another IPO today this year also, it's
Speaker 1: been a busy ipo. Calendar mobile apps company app leven
Speaker 1: and existing shareholder kk are pricing an initial public off
Speaker 1: ferring at the midpoint of a marketed range, raising two
Speaker 1: billion eighty dollars of share. Stock began trading day a
Speaker 1: little bit of a delayed open, and they did open
Speaker 1: trading below their offering price. Right now, the stock at
Speaker 1: sixty fifty a share down. About let's get into the
Speaker 1: business and what's ahead for app Love and the CEO
Speaker 1: and co founder Adam Ferrugi joins us. Now he's on
Speaker 1: the phone from the nastac Adam. Nice to have you
Speaker 1: here with us. How are you. Thanks, thanks for having
Speaker 1: me doing well well. Tell us a bit about your company,
Speaker 1: and you guys didn't go the traditional route of kind
Speaker 1: of tapping VC money and venture funds. You went the
Speaker 1: leverage loan market. Just tell us about your your whole
Speaker 1: approach to bringing this company and building out this startup. Yeah,
Speaker 1: for sure. We we built a technology platform to help
Speaker 1: app developers get their apps discovered, and we started in
Speaker 1: two thousand twelve in market. We've been profitable ever since
Speaker 1: and the business today drives our partners over three billion
Speaker 1: app installs. To customer is the consumer, and we have
Speaker 1: software in the middle that does matching make sure the
Speaker 1: consumer discovers the best content. So wait, do me a
Speaker 1: favorite break it down, because I think somebody's listening and like,
Speaker 1: I don't know this world that he said, explain it.
Speaker 1: So have you worked with a client, Pick a client
Speaker 1: if you can, or just be generic, but what you
Speaker 1: might do for them. Let's say you built an app,
Speaker 1: and you built this cool new game and you needed
Speaker 1: to find users for it. When we started, we built
Speaker 1: an app and we put it on an app store
Speaker 1: and couldn't get it discovered. So we built this platform
Speaker 1: to let you go onto our platform, market your app
Speaker 1: to consumers, and then get them to understand what you're
Speaker 1: promoting and download the app and engage with it. We
Speaker 1: now see over four million daily active users on our platform,
Speaker 1: and we're matching them up with apps from our partners
Speaker 1: three billion times a year plus. How do consumers interact
Speaker 1: with the apps that your service recommends on a long
Speaker 1: term basis? Right? It's one thing. My phone is full
Speaker 1: of apps that I just do not use anymore that
Speaker 1: I've downloaded once. What are the metrics that you have?
Speaker 1: It's the consumer sees the app through a commercial, typically
Speaker 1: anywhere from five to thirty seconds, think like a television commercial,
Speaker 1: highlighting what the app has to offer. Our software in
Speaker 1: the middle is matching up consumers that are going to
Speaker 1: become customers of that app developer. We do a great
Speaker 1: job of predicting what the consumers are actually going to
Speaker 1: be interested in, and we deliver performance to our advertisers.
Speaker 1: How do you do that in a way that uses
Speaker 1: data so that what I would see recommended to me
Speaker 1: might be different. What than what Carol C. Is recommended
Speaker 1: to her. What's the data that you're using? Yeah, what's
Speaker 1: interesting is in two thousand eighteen, we expanded our platform
Speaker 1: by launching our own content. We published and and have
Speaker 1: bought over two hundred games. The games are played by
Speaker 1: over two hundred million people every single month. And then
Speaker 1: so that gives us great audience insights. We know what
Speaker 1: our customer is interested in. That data, which is our
Speaker 1: own and engagement data through the customer accessing our games,
Speaker 1: feeds into our machine learning recommendation engine we call acts
Speaker 1: on and that does the matchmaking. How does games tell
Speaker 1: you a lot about me? Or tim? What tells us
Speaker 1: a lot? Or when someone transacts in one of our games?
Speaker 1: You're just playing a game does not tell us a
Speaker 1: whole lot. But if you go and spend ten dollars
Speaker 1: on a game. Let's say one of our popular games
Speaker 1: is a game called Project Makeover excuse heavily female, If
Speaker 1: you spend ten dollars in that game, our systems can
Speaker 1: figure out what other types of apps you're going to
Speaker 1: be likely to engage with. We can probably guess that
Speaker 1: you're going to also be interested in e commerce shopping app.
Speaker 1: What does what does innovation look like in this space
Speaker 1: and in terms of gaming, focusing out on that rather
Speaker 1: than like an e commerce shopping app, because we have
Speaker 1: seen the rise of in app purchases within games. But
Speaker 1: I mean, what makes what makes a game stick? And
Speaker 1: then how do you continue to build on that? These
Speaker 1: games are great access points to the will app ecosystem
Speaker 1: has given us the most affordable and accessible form of entertainment,
Speaker 1: which is this mobile gaming ecosystem. It's a billion dollar
Speaker 1: market still growing ten per cent plus year over year,
Speaker 1: and these games continue to be live updated. So so
Speaker 1: if if you play Project make Over every two weeks,
Speaker 1: our developer adds content to it for you to engage with,
Speaker 1: just like a favorite TV show would add an episode
Speaker 1: every week. And so we see people engaging with our
Speaker 1: games for years. All Right, I know you're not the CFO.
Speaker 1: I know you're not the financial guy. But are you
Speaker 1: a little disappointed that the stock is below the offering
Speaker 1: price today? You're a smart guy. You know that this
Speaker 1: is not what you kind of hope for in a debut. Uh, Like,
Speaker 1: we built a great company. We raised two billion dollars successfully.
Speaker 1: We're much more long term focused. Some of the best
Speaker 1: technology platform companies have had rough starts to the market
Speaker 1: as people start understanding why a platform is so powerful.
Speaker 1: We've got a business. We have four daily active users
Speaker 1: on our platform, and then we have our own content
Speaker 1: being engaged with by two million of them, and just
Speaker 1: you put these pieces together, you can create a lot
Speaker 1: of growth into the future. We're excited about our prospects.
Speaker 1: We're coming off for best growth year and best growth
Speaker 1: quarter of all time, and we're thinking about this business
Speaker 1: three five years from now. Where is it stock going
Speaker 1: to be? Not today? Okay, Adam, Once and for all,
Speaker 1: we have thirty seconds left answer the question the origins
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Speaker 1: but it's an eight dollar domain name. It did lead
Speaker 1: us to a great ticker app. We've been talking about
Speaker 1: this in the newsroom. Um, listen, come back and let
Speaker 1: us know the growth metrics as you guys move forward,
Speaker 1: because we'd love to hear a little bit more about it.
Speaker 1: We've been talking with Adam Ferugie. He is the CEO
Speaker 1: co founder of Apple Love and making its debut today
Speaker 1: uh Stock. As I mentioned about here in its first
Speaker 1: day of being a publicly held company at sixty four
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Speaker 1: but you let me drive? No, no, no, who's going
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Speaker 1: I want to drive, Just drive, baby, the questions drying.
Speaker 1: This is the drive to the globe coming. Thanks, we'll
Speaker 1: drying us Dawn on Bloomberg Radio. All right, everybody, it
Speaker 1: is time for the drive to the close. Just a
Speaker 1: little more than nine minutes left in today's trading day.
Speaker 1: Let's get to it with Kelsey Barrow, fixed in come
Speaker 1: portfolio manager focusing on US rates and inflation sectors at
Speaker 1: JP Morgan Asset Management, on the phone from Hoboken, New Jersey. Kelsey,
Speaker 1: nice to have you here with him and myself. When
Speaker 1: you look at today's market, I thought it was an
Speaker 1: interesting one. We saw stocks up, and we saw bonds
Speaker 1: up and yields backing off. Explain that to me, especially
Speaker 1: especially when it comes to the fixed income trade. Yeah. Absolutely,
Speaker 1: this is a really interesting day to be on with you,
Speaker 1: So thank you for having me Carol and Tim, so
Speaker 1: I would say it was a data tsunami. We started
Speaker 1: out with record strong marked retail sales, and one thing
Speaker 1: that set out to me with the retail sales report
Speaker 1: is actually now every sector, every category within the report
Speaker 1: is above pre COVID levels except for restaurants. So of course,
Speaker 1: looking at that data and then looking at these thirty
Speaker 1: year treasury yields, which is down eight basis points on
Speaker 1: the day, you think it'd be a disconnect. But for us,
Speaker 1: we see this as as somewhat not surprising, particularly because
Speaker 1: if you think about last quarters which US treasury yields,
Speaker 1: it was the worst quarter for government bonds since the
Speaker 1: nineteen eighties. So this is a bit of a validation
Speaker 1: trade here. The data is confirming the strong recovery, and
Speaker 1: now that we've gone past the volatility inducing events the
Speaker 1: retail sales report, this pp I report, to our power
Speaker 1: speaking earlier in the week, people are dipping their toes
Speaker 1: into the fixing home markets again. So how much higher
Speaker 1: do interest rates go this year? So after this consolidation phase,
Speaker 1: we do think that yields are going to be higher
Speaker 1: over the balance of the year. Uh, we think that
Speaker 1: two on the tenure is a reasonable stopping point to
Speaker 1: expect over over a period of time once we see
Speaker 1: how the recovery continues through the summer. Wait, let me
Speaker 1: go back to this. So you're saying that maybe we
Speaker 1: overreacted in terms of the fixed income market, the treasury market,
Speaker 1: uh last quarter, and that's obviously was playing out in
Speaker 1: terms of the performance when we start rates move up
Speaker 1: so much and then now we're just kind of calming
Speaker 1: down and understanding, yeah, the economy is getting back on track.
Speaker 1: This is what we expected, and that was already priced
Speaker 1: into the fixed income market. Yeah. So I think that
Speaker 1: when I look back at the move in guilt, it
Speaker 1: was historic about a ad basis point rise last quarter,
Speaker 1: and there is an opportunity for foreign investors, particularly to
Speaker 1: look at our market and say things have gotten more
Speaker 1: attractive here from evaluation perspective, and maybe it's time that
Speaker 1: we put a few chips on the table. But it
Speaker 1: is really well wait, wait, I want to just jump in.
Speaker 1: Is it a case that things have calmed down and
Speaker 1: this real worry about rates moving you know, well above
Speaker 1: two percent, inflation getting out of control, that's not happening.
Speaker 1: So I think you hit the nail on the head
Speaker 1: with the inflation conversation. So I think that we have
Speaker 1: been concerned about what what inflation would bring over the
Speaker 1: next few prints. And while the CPI report was strong,
Speaker 1: I look at the six months run rate on core
Speaker 1: c p I at one and a half percent, and
Speaker 1: that's not runaway inflation at least for now. I've been
Speaker 1: wondering about the role of fixed income in portfolios and
Speaker 1: if there is still that traditional need for it for
Speaker 1: many of your clients, given what interest rates have done,
Speaker 1: what they're doing now, and where they're expected to go. Absolutely,
Speaker 1: and I think we all lived with fields are a
Speaker 1: little bit higher in this environment. But we do still
Speaker 1: see this as a positive environment for the fixed income markets,
Speaker 1: particularly when the FED is still a good backdrop and
Speaker 1: default are falling, which is a good good backdrop for
Speaker 1: credit spread. So where do you want to be along
Speaker 1: the curve here? So when I think about the treasury curve,
Speaker 1: it has steepened a fair bit already, but it could
Speaker 1: continue to steep in as the economy recovers. So where
Speaker 1: you're going to get the most protection is in the
Speaker 1: front end, the front ends, So you want to do
Speaker 1: the shorter end here, Yeah, because eventually we do see
Speaker 1: YOUELD continuing to rise. Uh, and that's where you're going
Speaker 1: to get the protection. What is the time frame there?
Speaker 1: You say, eventually? But but but what are you forecasting?
Speaker 1: So we see two percent on the tenure for a
Speaker 1: year end um and after a period of consolidation, which
Speaker 1: is essentially what we think we're experiencing right now, that
Speaker 1: that is going to start talking about papering. They set
Speaker 1: the bar quite high to discuss papering. We are all
Speaker 1: wondering what substantial progress actually means. We think it's going
Speaker 1: to mean a number of months of job growth. So
Speaker 1: the one million print we got last months, that's great.
Speaker 1: We're going to have to get a string more of those,
Speaker 1: and then they're going to start considering, uh, where we're
Speaker 1: going to be on the past normalization? Well, I mean,
Speaker 1: in general, do you feel like, um kelsey, things are
Speaker 1: kind of going maybe as we hoped. I mean, obviously
Speaker 1: there's been a lot of stimulus pumped into the economy,
Speaker 1: whether it's from fiscal poll to see, whether it's through
Speaker 1: the Fed uh and easy money moving around here. But listen,
Speaker 1: this is what we wanted, right. We didn't want the
Speaker 1: economy to stay down for too long, because then it's
Speaker 1: much more difficult to get up. Is it kind of
Speaker 1: recovering in a productive and uh kind of normal and
Speaker 1: organized way, so that we don't have to be worried
Speaker 1: necessarily about inflation getting out of control. Absolutely, Fiscal policy
Speaker 1: and monetary policy makers have done a great job. They
Speaker 1: have responded quickly. Um. In fact, when I look at
Speaker 1: the coal in g d P during the depth of
Speaker 1: the crisis, it was around two trillions. The fiscal response
Speaker 1: has been more than double that whole. With infrastructure it
Speaker 1: could be easily three times the original whole. So we
Speaker 1: are there to experience the recovery. It is coming through
Speaker 1: as we expected. Um. And at the same time, I
Speaker 1: think structurally inflation can remain contained. So what do you
Speaker 1: say to a client who comes at you and says,
Speaker 1: I want to go all equities because I just don't
Speaker 1: see any opportunity and fixed income and we only about
Speaker 1: thirty seconds. Absolutely well, as I said before, I think
Speaker 1: we all wish yields are were higher, but there's still
Speaker 1: a diversification benefit from being in fixed income on the
Speaker 1: days where things are not going well, which would be
Speaker 1: not like today, but on a day when as these
Speaker 1: are struggling. We still see value, hedging value and having
Speaker 1: some fixed income in a portfolio. Just quickly fifteen twenty seconds,
Speaker 1: corporates any what's your position there. So we are very
Speaker 1: comfortable with credit spreads at this time, particularly because we
Speaker 1: see default rates falling this year. In fact, when I
Speaker 1: look at the amount of defaults we've seen so far
Speaker 1: in the high yield market, it's about two point three billions.
Speaker 1: That's an annualized rate of just point six percent, so
Speaker 1: significantly lower than we experienced lash year. Right, we just
Speaker 1: had a headline JP Morgan itself setting a bond sale
Speaker 1: at thirteen billion, the biggest ever for a bank. So
Speaker 1: you're own company certainly out there in the credit market, Kelsey,
Speaker 1: Thank you so much, klcy Barrow. She's fixed income portfolio manager,
Speaker 1: JP Morgan Asset Management, on the phone from Hoboken, New Jersey.
Speaker 1: Thanks week. Brisdoomberg is bliss. This massive, Carol We Brisdoomberg
Speaker 1: is bliss. This