1
00:00:02,720 --> 00:00:10,520
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

2
00:00:10,560 --> 00:00:14,520
Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

3
00:00:14,560 --> 00:00:17,840
Speaker 1: Eastern on Apple, Coarclay and Android Auto with the Bloomberg

4
00:00:17,880 --> 00:00:21,000
Speaker 1: Business App. Listen on demand wherever you get your podcasts,

5
00:00:21,320 --> 00:00:23,480
Speaker 1: or watch us live on YouTube.

6
00:00:24,440 --> 00:00:26,400
Speaker 2: All right, let's go right now to June Grasso, a

7
00:00:26,480 --> 00:00:29,920
Speaker 2: Bloomberg legal analyst and host of the Bloomberg Law Show,

8
00:00:30,040 --> 00:00:33,120
Speaker 2: joining us on the Supreme Court upholding the law that

9
00:00:33,240 --> 00:00:35,600
Speaker 2: threatens us TikTok shutdown.

10
00:00:35,760 --> 00:00:36,479
Speaker 3: What do you know?

11
00:00:36,840 --> 00:00:41,040
Speaker 4: So this was a unanimous decision, and what basically it

12
00:00:41,120 --> 00:00:44,520
Speaker 4: does is it says that national security concerns are more

13
00:00:44,560 --> 00:00:47,560
Speaker 4: important than any of the free speech concerns raised by

14
00:00:47,640 --> 00:00:52,080
Speaker 4: TikTok or the content creators who appealed at the Supreme Court.

15
00:00:52,120 --> 00:00:56,160
Speaker 4: And this is pretty much expected, maybe not that unanimity

16
00:00:56,280 --> 00:00:59,920
Speaker 4: of it, but during the oral arguments, justices from across

17
00:01:00,120 --> 00:01:06,320
Speaker 4: the ideological spectrum we're questioning whether TikTok really was sort

18
00:01:06,360 --> 00:01:12,280
Speaker 4: of safe, whether TikTok, the Chinese parent, might somehow use

19
00:01:12,319 --> 00:01:15,200
Speaker 4: the data of millions of Americans and store it, or

20
00:01:15,319 --> 00:01:20,160
Speaker 4: use data against Americans, or engage in propaganda campaigns on TikTok.

21
00:01:20,200 --> 00:01:24,759
Speaker 4: There were all these huge concerns raised, and there wasn't

22
00:01:24,800 --> 00:01:27,720
Speaker 4: that much concern for the free speech rights of the

23
00:01:27,720 --> 00:01:30,400
Speaker 4: one hundred and seventy million Americans who are on TikTok,

24
00:01:30,520 --> 00:01:33,720
Speaker 4: or TikTok's free speech rights or the content creators free

25
00:01:33,720 --> 00:01:38,160
Speaker 4: speech rights. So and it's not unusual, I think, because

26
00:01:38,600 --> 00:01:42,360
Speaker 4: usually when there's a case that says national security, it's

27
00:01:42,400 --> 00:01:45,720
Speaker 4: like a big red sign to judges saying, well, this

28
00:01:45,800 --> 00:01:46,640
Speaker 4: isn't my area.

29
00:01:46,680 --> 00:01:48,480
Speaker 5: This is the area for the.

30
00:01:48,440 --> 00:01:51,480
Speaker 4: Executive branch or the legislative branch. What do I know

31
00:01:51,520 --> 00:01:54,480
Speaker 4: about national security? So it tends to fall by the

32
00:01:54,480 --> 00:01:56,680
Speaker 4: wayside in the light of other concerns.

33
00:01:56,880 --> 00:01:59,440
Speaker 6: So this was largely expected, as you mentioned. And then

34
00:01:59,480 --> 00:02:02,160
Speaker 6: also we should be seeing this action actually been being

35
00:02:02,200 --> 00:02:05,160
Speaker 6: taken place on Sunday, if I'm not mistaken. What is

36
00:02:05,160 --> 00:02:08,320
Speaker 6: it like in action? Are we seeing the app being

37
00:02:08,320 --> 00:02:10,519
Speaker 6: removed from people's phones that are here in the US.

38
00:02:10,680 --> 00:02:12,640
Speaker 6: Is there any discussion about what this could look like or.

39
00:02:12,680 --> 00:02:13,359
Speaker 5: Is it an unknown?

40
00:02:13,680 --> 00:02:17,640
Speaker 4: So what will happen is TikTok, according to what its

41
00:02:17,720 --> 00:02:20,400
Speaker 4: attorney said at the Supreme Court, will go dark on

42
00:02:20,560 --> 00:02:25,320
Speaker 4: Sunday and the point of this really is to I think,

43
00:02:25,360 --> 00:02:28,360
Speaker 4: and I've read other people talking about how it's to

44
00:02:28,400 --> 00:02:30,919
Speaker 4: send the message to those one hundred and seventy million

45
00:02:30,960 --> 00:02:34,120
Speaker 4: Americans that you're not going to have TikTok anymore. But

46
00:02:34,240 --> 00:02:37,920
Speaker 4: actually TikTok can remain. If you have downloaded already, it

47
00:02:37,919 --> 00:02:40,880
Speaker 4: will remain on your phone. The problem is not with

48
00:02:41,080 --> 00:02:43,240
Speaker 4: what TikTok's going to do so much, but what the

49
00:02:43,280 --> 00:02:46,560
Speaker 4: support the companies that support the platform, like Apple and

50
00:02:46,639 --> 00:02:47,800
Speaker 4: Oracle and Google.

51
00:02:47,960 --> 00:02:49,040
Speaker 5: What are they going to do?

52
00:02:49,360 --> 00:02:54,080
Speaker 4: So there is this theory that President Electrump could say,

53
00:02:54,160 --> 00:02:56,320
Speaker 4: my Justice Department is not going to enforce this, so

54
00:02:56,400 --> 00:02:58,799
Speaker 4: don't worry Apple, don't worry Oracle, We're not going to

55
00:02:58,919 --> 00:03:01,840
Speaker 4: force this. But then are they really going to take that?

56
00:03:01,919 --> 00:03:04,880
Speaker 4: Are those companies really going to take that as assurance

57
00:03:04,960 --> 00:03:09,200
Speaker 4: when the fines would be massive, five thousand dollars per use,

58
00:03:09,280 --> 00:03:12,200
Speaker 4: So just imagine what those fines would look like the.

59
00:03:12,160 --> 00:03:13,720
Speaker 3: Person with a TikTok right now.

60
00:03:13,880 --> 00:03:17,280
Speaker 4: So people I've talked is that they doubt that that

61
00:03:17,400 --> 00:03:21,480
Speaker 4: Apple and Oracle would would actually support TikTok, and so

62
00:03:21,520 --> 00:03:25,320
Speaker 4: then TikTok would gradually lose people and it would gradually

63
00:03:25,400 --> 00:03:28,880
Speaker 4: sort of disappear, but there are other The funny thing

64
00:03:28,960 --> 00:03:33,400
Speaker 4: is that a lot of TikTok users calling themselves TikTok refugees,

65
00:03:33,400 --> 00:03:35,680
Speaker 4: are going to other platforms now, but a lot of

66
00:03:35,680 --> 00:03:37,560
Speaker 4: those platforms are Chinese owned as well.

67
00:03:38,920 --> 00:03:43,240
Speaker 2: Yeah right now, exactly so legally for the companies like

68
00:03:43,280 --> 00:03:46,240
Speaker 2: you mentioned Oracle and Apple, you can download the app

69
00:03:46,280 --> 00:03:49,640
Speaker 2: now until Sunday, you just can't update it anymore. And

70
00:03:49,480 --> 00:03:51,680
Speaker 2: that and that's where the issue is. Did they have

71
00:03:51,720 --> 00:03:52,960
Speaker 2: a legal standing.

72
00:03:53,800 --> 00:03:56,840
Speaker 5: You mean Apple or Yeah, I don't think so.

73
00:03:56,960 --> 00:03:59,680
Speaker 4: At least they weren't involved in the in the Supreme

74
00:03:59,720 --> 00:04:02,400
Speaker 4: Court as parties in the Supreme Court case, they don't

75
00:04:02,440 --> 00:04:05,080
Speaker 4: really have what I would say is legal standing. But

76
00:04:05,160 --> 00:04:08,000
Speaker 4: you know, millions of TikTok users might say that they

77
00:04:08,080 --> 00:04:11,280
Speaker 4: have legal standing, and they weren't represented at the Supreme Court.

78
00:04:11,560 --> 00:04:14,560
Speaker 4: So it wasn't so much a standing issue as just

79
00:04:14,640 --> 00:04:19,680
Speaker 4: this national security, you know, concern overweighing everything and also

80
00:04:19,760 --> 00:04:22,480
Speaker 4: what's kind of unusual, and this Justice has talked about

81
00:04:22,760 --> 00:04:26,640
Speaker 4: how there was secret evidence and we haven't seen the

82
00:04:26,680 --> 00:04:31,279
Speaker 4: evidence of that. Apparently some of the senators and the

83
00:04:31,360 --> 00:04:35,479
Speaker 4: lawmakers have seen about the dangers of TikTok, And in fact,

84
00:04:35,560 --> 00:04:38,720
Speaker 4: the circuit court, the DC appellate court that ruled unanimously

85
00:04:38,760 --> 00:04:41,640
Speaker 4: as well to keep the ban in place, didn't even

86
00:04:42,000 --> 00:04:44,719
Speaker 4: use that evidence to make its decision.

87
00:04:44,760 --> 00:04:46,760
Speaker 5: They just relied on what Congress said.

88
00:04:47,400 --> 00:04:50,719
Speaker 4: So it'd be interesting if we ever see that evidence,

89
00:04:50,760 --> 00:04:51,920
Speaker 4: if it exists.

90
00:04:52,040 --> 00:04:55,080
Speaker 6: So what could actually be done to change this decision?

91
00:04:55,080 --> 00:04:58,680
Speaker 6: You mentioned Trump? Are there any other hail mary situations

92
00:04:58,720 --> 00:04:59,960
Speaker 6: in terms of the fate of time?

93
00:05:01,200 --> 00:05:03,279
Speaker 5: Well, I mean, right now.

94
00:05:04,480 --> 00:05:07,040
Speaker 4: The president is Biden still and he has said he's

95
00:05:07,080 --> 00:05:08,880
Speaker 4: not going to or it's indicated he's not going to

96
00:05:08,880 --> 00:05:12,560
Speaker 4: do anything about TikTok. When Trump is inaugurated, will already

97
00:05:12,600 --> 00:05:15,080
Speaker 4: be the band will already be in effect. There is

98
00:05:15,120 --> 00:05:17,599
Speaker 4: a question there's a provision in the band that gives

99
00:05:17,720 --> 00:05:22,840
Speaker 4: ninety days to a president if TikTok is engaging in

100
00:05:23,560 --> 00:05:28,000
Speaker 4: sincere negotiations to sell the platform, if bytedances, and I'm

101
00:05:28,000 --> 00:05:31,120
Speaker 4: not quite sure, you know, legally speaking, whether that there

102
00:05:31,120 --> 00:05:33,280
Speaker 4: would be an issue about whether it starts to run

103
00:05:33,640 --> 00:05:35,320
Speaker 4: with Biden or starts to.

104
00:05:35,279 --> 00:05:37,680
Speaker 5: Run with Trump. Once the band's in effect, there's that.

105
00:05:39,040 --> 00:05:42,280
Speaker 4: The Washington Post has reported that Trump has suggested he

106
00:05:42,360 --> 00:05:44,200
Speaker 4: might issue an executive.

107
00:05:43,760 --> 00:05:46,000
Speaker 5: Order to put the ban on hold.

108
00:05:46,279 --> 00:05:48,880
Speaker 4: I mean that would be questionable legally, an executive order

109
00:05:49,000 --> 00:05:50,920
Speaker 4: like that, but I don't know who would oppose it

110
00:05:50,960 --> 00:05:53,760
Speaker 4: at this point. So there are and as I said,

111
00:05:53,839 --> 00:05:56,680
Speaker 4: Trump can just say to the Justice Department, don't enforce this.

112
00:05:57,600 --> 00:06:00,600
Speaker 4: You know, he spoke with the president of it today

113
00:06:00,600 --> 00:06:03,560
Speaker 4: and said they discussed TikTok and nothing more than that.

114
00:06:03,720 --> 00:06:05,840
Speaker 5: So you know, we'll see. There are things that can

115
00:06:05,880 --> 00:06:07,760
Speaker 5: be done. I mean, Congress could.

116
00:06:07,560 --> 00:06:10,600
Speaker 4: Pass another law, and you know, with the weight that

117
00:06:10,640 --> 00:06:14,240
Speaker 4: Trump has with Congress, as we've seen from these you know,

118
00:06:14,400 --> 00:06:17,440
Speaker 4: hearings and everything else, maybe they could pass another law

119
00:06:17,560 --> 00:06:20,640
Speaker 4: and you know, take to take away the ban.

120
00:06:21,080 --> 00:06:22,039
Speaker 3: June, we appreciate it.

121
00:06:22,040 --> 00:06:23,800
Speaker 2: I know it's always hard to jump in right after

122
00:06:23,839 --> 00:06:26,359
Speaker 2: breaking a Supreme Court decision, but we very much appreciate you.

123
00:06:26,440 --> 00:06:29,200
Speaker 2: June Grasshow Bloomberg legal analysts and host of the Bloomberg

124
00:06:29,279 --> 00:06:32,080
Speaker 2: Law Show. Let's get more on this now with Matthew S. Shettenhelm,

125
00:06:32,080 --> 00:06:35,800
Speaker 2: Bloomberg Intelligence media litigation analyst. He is standing by on

126
00:06:35,839 --> 00:06:38,159
Speaker 2: this news again the news Supreme Court is now upheld

127
00:06:38,160 --> 00:06:41,760
Speaker 2: the law that threatens to shut down TikTok social media

128
00:06:41,800 --> 00:06:45,159
Speaker 2: platform in the US as soon as Sunday. All right, Matthew,

129
00:06:45,200 --> 00:06:47,080
Speaker 2: were you surprised by the decision from the Supreme Court.

130
00:06:48,240 --> 00:06:49,400
Speaker 7: I was not surprised.

131
00:06:49,720 --> 00:06:54,279
Speaker 8: The oral argument last Friday was consistent with this. The

132
00:06:54,360 --> 00:06:57,120
Speaker 8: question in my mind was really was was this going

133
00:06:57,200 --> 00:06:59,640
Speaker 8: to be unanimous? I thought there was a chance TikTok

134
00:06:59,680 --> 00:07:04,159
Speaker 8: could could could win a couple justices with Looking quickly

135
00:07:04,200 --> 00:07:07,560
Speaker 8: at the opinion here, it looks like the Court wrote

136
00:07:07,560 --> 00:07:11,280
Speaker 8: a procureum, a decision for all nine justices. There were

137
00:07:11,320 --> 00:07:16,720
Speaker 8: a couple concurring opinions from Justice Soda Mayor and Justice Gorsic,

138
00:07:17,320 --> 00:07:20,440
Speaker 8: but both of those they expressed, you know, a different view,

139
00:07:20,480 --> 00:07:22,720
Speaker 8: but they went along with the judgment. So this is

140
00:07:22,720 --> 00:07:25,520
Speaker 8: a nine to zero loss for TikTok. This is this

141
00:07:25,560 --> 00:07:29,320
Speaker 8: is what we expected after the Appellate Court ruled against

142
00:07:29,360 --> 00:07:30,720
Speaker 8: TikTok earlier this year.

143
00:07:30,840 --> 00:07:32,680
Speaker 7: The Supreme Court is doing.

144
00:07:32,480 --> 00:07:36,360
Speaker 8: Exactly what that appellate court said, and so the law

145
00:07:36,600 --> 00:07:39,920
Speaker 8: remains in place. The ban takes effect on Sunday.

146
00:07:40,520 --> 00:07:43,080
Speaker 6: Well, Matthew, in your note you mentioned that Senate Minority

147
00:07:43,160 --> 00:07:46,760
Speaker 6: Leader Chuck Schumer was signing support for a ban extension.

148
00:07:47,320 --> 00:07:49,240
Speaker 6: What does it look like now that we've heard that

149
00:07:49,280 --> 00:07:51,800
Speaker 6: the Supreme Court will be upholding this ban.

150
00:07:53,000 --> 00:07:53,280
Speaker 9: Yeah.

151
00:07:53,360 --> 00:07:58,520
Speaker 8: So, so the logical way for this band to go

152
00:07:58,600 --> 00:08:02,120
Speaker 8: away is not the President issuing an executive order. The

153
00:08:02,160 --> 00:08:07,040
Speaker 8: President can't change federal laws by executive order. What he

154
00:08:07,120 --> 00:08:10,640
Speaker 8: can do is convince Congress to change course. And I

155
00:08:10,640 --> 00:08:16,080
Speaker 8: think TikTok got its first real good news yesterday when

156
00:08:16,400 --> 00:08:19,520
Speaker 8: the Democrats leader in the Senate, Chuck Schumer, came out

157
00:08:19,560 --> 00:08:23,160
Speaker 8: and said, look, there's real concerns about TikTok, and we

158
00:08:23,280 --> 00:08:25,520
Speaker 8: still need to force a sale, but let's give them

159
00:08:25,560 --> 00:08:28,400
Speaker 8: more time. And when you have Chuck Schumer for the

160
00:08:28,400 --> 00:08:32,560
Speaker 8: Democrats and President Trump for the Republicans both saying that,

161
00:08:33,240 --> 00:08:35,800
Speaker 8: to me, it's a pretty good sign that Congress is

162
00:08:35,880 --> 00:08:39,760
Speaker 8: going to find a solution to extend this, to push

163
00:08:39,760 --> 00:08:42,840
Speaker 8: it back at the very least. The problem though, is

164
00:08:42,880 --> 00:08:47,079
Speaker 8: that the timing here this takes effect on Sunday and

165
00:08:47,600 --> 00:08:51,440
Speaker 8: Congress is unless they have unanimous support in the Senate

166
00:08:51,720 --> 00:08:54,040
Speaker 8: to do this, I don't think they can do it

167
00:08:54,920 --> 00:08:57,880
Speaker 8: very quickly. It takes a matter of days to debate

168
00:08:57,920 --> 00:09:02,840
Speaker 8: these provisions, and so that the harder, harder question is

169
00:09:02,840 --> 00:09:05,839
Speaker 8: is practically when Congress can get this done with it

170
00:09:05,960 --> 00:09:08,160
Speaker 8: with the band looming and set to a take effect

171
00:09:08,240 --> 00:09:08,760
Speaker 8: on Sunday.

172
00:09:08,960 --> 00:09:11,760
Speaker 2: The other question is who would buy it? Morgan Stanley

173
00:09:11,800 --> 00:09:14,840
Speaker 2: actually saying that Amazon could be a good suitor for TikTok.

174
00:09:14,880 --> 00:09:17,440
Speaker 2: We heard the Chinese government saying that, well maybe if

175
00:09:17,480 --> 00:09:19,640
Speaker 2: they sold it to musk What do you think?

176
00:09:21,040 --> 00:09:25,520
Speaker 8: Yeah, the big question is what are they selling? And

177
00:09:25,600 --> 00:09:30,280
Speaker 8: will Byte Dance sell anything to me? Because there's real

178
00:09:30,400 --> 00:09:33,360
Speaker 8: doubts I think that that Byte Dance would would ever

179
00:09:33,520 --> 00:09:36,800
Speaker 8: agree to a sale of the algorithm, or that China

180
00:09:36,840 --> 00:09:40,000
Speaker 8: would would would concur with that. And so that's the

181
00:09:40,040 --> 00:09:43,959
Speaker 8: first question of what are we even buying here? And

182
00:09:44,280 --> 00:09:48,480
Speaker 8: and is that resulting product going to have the secret

183
00:09:48,559 --> 00:09:50,880
Speaker 8: sauce that makes TikTok what it is?

184
00:09:51,640 --> 00:09:53,920
Speaker 7: And so I find it difficult to.

185
00:09:54,800 --> 00:09:58,559
Speaker 8: Speculate about that given you know, we don't know what

186
00:09:58,559 --> 00:10:00,640
Speaker 8: what could be for sale here, and there's a real

187
00:10:00,679 --> 00:10:03,560
Speaker 8: possibility that that Byte Dances is not going to be

188
00:10:03,600 --> 00:10:04,480
Speaker 8: in a position to do a.

189
00:10:04,559 --> 00:10:05,120
Speaker 7: Sale at all.

190
00:10:05,240 --> 00:10:08,079
Speaker 8: So far there, you know, if they succeed in Congress

191
00:10:08,120 --> 00:10:12,000
Speaker 8: in pushing this back, maybe they keep playing hardball and

192
00:10:12,000 --> 00:10:15,240
Speaker 8: and not not seriously considering a sale.

193
00:10:15,720 --> 00:10:18,280
Speaker 6: Matthew, what does this mean for US competitors. Of course,

194
00:10:18,320 --> 00:10:21,160
Speaker 6: we have met us Snapchat. If we think about Instagram reels,

195
00:10:21,160 --> 00:10:23,400
Speaker 6: they're all willing to hop in on this situation.

196
00:10:24,840 --> 00:10:26,280
Speaker 7: Yeah, it's it's great news.

197
00:10:26,360 --> 00:10:28,960
Speaker 8: I mean, right now we are looking at a band

198
00:10:28,960 --> 00:10:34,440
Speaker 8: taking effect on Sunday. And if TikTok goes dark, as

199
00:10:34,480 --> 00:10:37,760
Speaker 8: TikTok's counsel told the Supreme Court, it would if the

200
00:10:37,760 --> 00:10:40,520
Speaker 8: Court did an issue as stay, those.

201
00:10:40,400 --> 00:10:42,640
Speaker 7: Users are going to need to go somewhere.

202
00:10:42,880 --> 00:10:46,600
Speaker 8: And so it's a it's a great opportunity for for Meta,

203
00:10:46,920 --> 00:10:49,880
Speaker 8: for Google, for snap for for those users are going

204
00:10:49,920 --> 00:10:53,000
Speaker 8: to need to find a new location. And and so

205
00:10:53,559 --> 00:10:56,520
Speaker 8: I do think, as I said, there's a pretty decent

206
00:10:56,559 --> 00:11:01,120
Speaker 8: possibility that Congress turns the lights back on and and

207
00:11:01,120 --> 00:11:02,760
Speaker 8: and so then maybe they go back. But this is

208
00:11:02,840 --> 00:11:07,640
Speaker 8: disruptive and so that creates an opportunity for TikTok's competitors.

209
00:11:07,840 --> 00:11:10,400
Speaker 2: Yeah, and also disruptive for all the influencers who are

210
00:11:10,440 --> 00:11:13,400
Speaker 2: making money off of TikTok, like small businesses, small businesses,

211
00:11:13,480 --> 00:11:15,760
Speaker 2: same thing, all right, Matthew, thanks a lot, Really appreciate you,

212
00:11:15,760 --> 00:11:20,640
Speaker 2: Matthew setting Helm. Bloomberg Intelligence senior litigation media analysts will

213
00:11:20,679 --> 00:11:21,240
Speaker 2: be watching that.

214
00:11:21,200 --> 00:11:22,839
Speaker 3: Are you're Are you a TikToker?

215
00:11:23,160 --> 00:11:23,920
Speaker 5: I am you are?

216
00:11:23,960 --> 00:11:24,240
Speaker 3: Okay.

217
00:11:24,360 --> 00:11:26,800
Speaker 6: I did tell Marker producer that I might sob on

218
00:11:26,880 --> 00:11:28,400
Speaker 6: air if I heard about this news.

219
00:11:28,440 --> 00:11:31,600
Speaker 3: But holding it together, you held, you held for what

220
00:11:31,600 --> 00:11:33,880
Speaker 3: would you miss the most? Like I missed the food,

221
00:11:33,960 --> 00:11:35,199
Speaker 3: the food recipes.

222
00:11:35,760 --> 00:11:38,520
Speaker 6: If I'm traveling somewhere, I look up my entire itinerary

223
00:11:38,559 --> 00:11:40,720
Speaker 6: through TikTok, people who are on the ground there telling

224
00:11:40,720 --> 00:11:41,280
Speaker 6: me what to do.

225
00:11:41,640 --> 00:11:43,640
Speaker 3: Huh. And you can't do that through like Instagram.

226
00:11:43,800 --> 00:11:46,920
Speaker 6: I don't find that the same search engine capabilities are

227
00:11:46,920 --> 00:11:47,280
Speaker 6: the same.

228
00:11:47,320 --> 00:11:49,160
Speaker 3: So I use TikTok as a search engine.

229
00:11:49,200 --> 00:11:52,560
Speaker 6: I do largely. I wrote a story about that for Bloomberg. Actually, wow,

230
00:11:52,600 --> 00:11:53,520
Speaker 6: I have to send it your way.

231
00:11:53,720 --> 00:11:55,400
Speaker 2: I have to think about this. I'm going to ruminate

232
00:11:55,440 --> 00:11:57,880
Speaker 2: on this possibility, John Techer and I do not do that.

233
00:11:58,080 --> 00:11:58,880
Speaker 7: But oh I do.

234
00:11:59,120 --> 00:12:00,719
Speaker 5: Oh I love the videos.

235
00:12:00,720 --> 00:12:03,199
Speaker 3: Oh all, I love catvideos.

236
00:12:03,880 --> 00:12:05,760
Speaker 5: Of course, I should definitely watch hours.

237
00:12:05,520 --> 00:12:07,640
Speaker 3: And hours of cavideos.

238
00:12:07,960 --> 00:12:11,840
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch the program

239
00:12:11,960 --> 00:12:14,960
Speaker 1: live weekdays at ten am Eastern on Apple CarPlay and

240
00:12:14,960 --> 00:12:17,959
Speaker 1: Android Auto with the Bloomberg Business app. You can also

241
00:12:18,080 --> 00:12:21,760
Speaker 1: listen live on Amazon Alexa from our flagship New York station.

242
00:12:22,280 --> 00:12:24,959
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

243
00:12:25,880 --> 00:12:28,120
Speaker 2: I got say the market wants to go higher because

244
00:12:28,160 --> 00:12:30,640
Speaker 2: fast Now just turned around up two percent.

245
00:12:30,720 --> 00:12:32,480
Speaker 7: After their earnings this morning.

246
00:12:32,600 --> 00:12:34,160
Speaker 3: Yep, but you mentioned it was down.

247
00:12:34,240 --> 00:12:36,800
Speaker 2: It just turned I mean, I don't see any necessarily

248
00:12:36,840 --> 00:12:40,840
Speaker 2: headlines like maybe less badu is than could have feared,

249
00:12:40,960 --> 00:12:43,240
Speaker 2: or it's getting better is helpful.

250
00:12:43,600 --> 00:12:47,720
Speaker 8: However, well, they were initially blaming you know, the downturn

251
00:12:47,800 --> 00:12:51,440
Speaker 8: in manufacturing in the US free they're woes and that

252
00:12:51,480 --> 00:12:52,280
Speaker 8: hasn't improved.

253
00:12:52,320 --> 00:12:55,320
Speaker 2: So yeah, no, exactly, that's I mean, like the momentum

254
00:12:55,360 --> 00:12:56,199
Speaker 2: is we're going to buy some.

255
00:12:56,120 --> 00:12:59,480
Speaker 6: Stocks today, like all fictors, all eleven major industry groups

256
00:12:59,480 --> 00:13:00,480
Speaker 6: are in the green right now.

257
00:13:00,559 --> 00:13:03,360
Speaker 2: Yeah, let's get some more insight on this. I'm Alex Steel,

258
00:13:03,360 --> 00:13:06,000
Speaker 2: by the way, normal Linda in for Paul Sweeney joining us,

259
00:13:06,040 --> 00:13:09,560
Speaker 2: one of the best with the internal details of the market.

260
00:13:09,840 --> 00:13:11,480
Speaker 2: I love guys like this, and I love Steve Steve

261
00:13:11,559 --> 00:13:14,760
Speaker 2: soasenagas chief Status and Interactive brokers and he joins us

262
00:13:14,760 --> 00:13:16,640
Speaker 2: now and he looks at all the stuff under the hood,

263
00:13:16,720 --> 00:13:18,680
Speaker 2: right like who's buying, who's selling, what are they doing

264
00:13:18,720 --> 00:13:21,200
Speaker 2: what options look like? The whole thing Steve is today

265
00:13:21,240 --> 00:13:23,280
Speaker 2: just to buy the equity market thing. Is there a

266
00:13:23,320 --> 00:13:24,240
Speaker 2: theme here for you?

267
00:13:25,960 --> 00:13:27,920
Speaker 9: Good morning, Alex, and I hope I can live up

268
00:13:27,920 --> 00:13:31,520
Speaker 9: to that introduction. Thank you so much, so well, but

269
00:13:32,520 --> 00:13:34,400
Speaker 9: it is pretty much we did sort of wake up

270
00:13:34,440 --> 00:13:36,720
Speaker 9: with let's let's buy the market. I think we've had

271
00:13:36,760 --> 00:13:39,480
Speaker 9: a huge change in sentiment this week, and it was

272
00:13:39,559 --> 00:13:42,240
Speaker 9: largely driven by the bond market. Think about where we

273
00:13:42,240 --> 00:13:44,800
Speaker 9: were this time last week, when we were selling off

274
00:13:44,840 --> 00:13:49,600
Speaker 9: hard because the labor economy was too good. But so

275
00:13:49,679 --> 00:13:52,360
Speaker 9: it's all been about, you know, perceptions about FED rate

276
00:13:52,400 --> 00:13:55,200
Speaker 9: cuts and FED activity. It did show you that the

277
00:13:55,240 --> 00:13:58,280
Speaker 9: market at some level cares the stock market, I should

278
00:13:58,280 --> 00:14:00,600
Speaker 9: say some level cares more about eight cuts that it

279
00:14:00,600 --> 00:14:03,160
Speaker 9: did about a strong economy. If we if we you know,

280
00:14:03,280 --> 00:14:06,000
Speaker 9: sold off on a good economic numbers. But once the

281
00:14:06,040 --> 00:14:08,959
Speaker 9: bond markets stabilized, and you know, when we're up around

282
00:14:09,160 --> 00:14:12,199
Speaker 9: four seventy or so, now we're back around for sixty

283
00:14:12,240 --> 00:14:14,880
Speaker 9: a little bit below it on the ten year. That's

284
00:14:14,920 --> 00:14:18,079
Speaker 9: really helped stock spirits a lot. This morning's numbers you

285
00:14:18,120 --> 00:14:20,480
Speaker 9: were talking about fast and all industrial production came in

286
00:14:20,600 --> 00:14:24,240
Speaker 9: way above expectations, as did housing starts. So you know,

287
00:14:24,400 --> 00:14:28,200
Speaker 9: ultimately a good economy should trump all. You know, no

288
00:14:28,280 --> 00:14:32,040
Speaker 9: pun intended about inauguration, but certainly and also you know,

289
00:14:32,080 --> 00:14:33,920
Speaker 9: I just think that that people are back in the

290
00:14:33,960 --> 00:14:37,680
Speaker 9: buying mode. And you did mention expiration today. You know,

291
00:14:37,720 --> 00:14:40,200
Speaker 9: we all focus on these new zero DTE options, but

292
00:14:40,200 --> 00:14:43,040
Speaker 9: it's important to remember that expiration means that everything is

293
00:14:43,080 --> 00:14:46,360
Speaker 9: a zero DTE option today because they're all expiring today.

294
00:14:46,960 --> 00:14:48,880
Speaker 6: Well, see, things are looking good, as you just noted.

295
00:14:48,920 --> 00:14:51,080
Speaker 6: Of course, we ended last year up more than twenty

296
00:14:51,120 --> 00:14:54,360
Speaker 6: percent and we're seeing us in the green today. But

297
00:14:54,400 --> 00:14:57,520
Speaker 6: there's also this argument that things are too expensive, valuations

298
00:14:57,560 --> 00:15:00,840
Speaker 6: are too high. Where do you fit in this idea?

299
00:15:02,760 --> 00:15:06,239
Speaker 9: Well, norah, I can't argue with the fact that valuations

300
00:15:06,240 --> 00:15:09,640
Speaker 9: are high, and and really can't say they're not too high.

301
00:15:09,720 --> 00:15:13,080
Speaker 9: But but too high is very much of a relative statement, right,

302
00:15:13,200 --> 00:15:16,400
Speaker 9: you know, too high compared to what and it's you know,

303
00:15:16,480 --> 00:15:19,160
Speaker 9: and certainly there's they're not too high for people to

304
00:15:19,240 --> 00:15:21,640
Speaker 9: want to pay for them right now. The thing about

305
00:15:21,720 --> 00:15:25,080
Speaker 9: valuations is over time, they do tend to work as

306
00:15:25,120 --> 00:15:28,840
Speaker 9: a timing measure. They stink. You can you know, markets,

307
00:15:28,880 --> 00:15:32,360
Speaker 9: markets could be irrational much longer than you can remain solvent,

308
00:15:32,440 --> 00:15:34,800
Speaker 9: and so it's very it's important to know that that

309
00:15:34,960 --> 00:15:38,440
Speaker 9: if you're buying stocks here, you are paying a real

310
00:15:38,480 --> 00:15:41,000
Speaker 9: premium for their earnings power or in some you know,

311
00:15:41,040 --> 00:15:42,880
Speaker 9: in some cases you're paying a lot even if they're

312
00:15:42,920 --> 00:15:46,720
Speaker 9: not paid earning very much. But uh, you know from

313
00:15:46,720 --> 00:15:50,680
Speaker 9: a timing measure that that can be problematic today, tomorrow,

314
00:15:50,920 --> 00:15:53,640
Speaker 9: two years from now. It's it's it's it's not. There's nothing.

315
00:15:53,680 --> 00:15:55,600
Speaker 9: There's no timing component to valuation.

316
00:15:56,120 --> 00:15:58,119
Speaker 3: So talk to me about funds and positioning.

317
00:15:58,240 --> 00:16:02,360
Speaker 2: So we got CTAs so trading advisors, they're more trend following.

318
00:16:02,400 --> 00:16:05,520
Speaker 2: We've got the all controlled funds that reallocate based on

319
00:16:05,560 --> 00:16:06,680
Speaker 2: where volatility is.

320
00:16:07,480 --> 00:16:11,880
Speaker 9: Where are those guys, You know, the trend followers are

321
00:16:11,920 --> 00:16:13,720
Speaker 9: still in place. I think they got shaken out a

322
00:16:13,760 --> 00:16:16,160
Speaker 9: little bit. But you know, if you're a short term

323
00:16:16,200 --> 00:16:19,400
Speaker 9: trend follower, certainly you're back in the game today trading

324
00:16:19,400 --> 00:16:23,560
Speaker 9: from the longside. In terms of volatility, it's been interesting

325
00:16:23,560 --> 00:16:27,200
Speaker 9: because we have had a fair amount of realized volatility recently.

326
00:16:27,960 --> 00:16:30,640
Speaker 9: You know, in the last let's say twenty sessions, we've

327
00:16:30,640 --> 00:16:32,880
Speaker 9: had pretty much nine or so where you've had the

328
00:16:33,000 --> 00:16:35,360
Speaker 9: S and P five hundred moved one percent or more.

329
00:16:35,440 --> 00:16:38,760
Speaker 9: So there has been a return of volatility. You wouldn't

330
00:16:38,800 --> 00:16:41,560
Speaker 9: know that from looking at the vics today, which you know,

331
00:16:42,000 --> 00:16:44,160
Speaker 9: I like to remind people that, you know, VIX is

332
00:16:44,240 --> 00:16:46,440
Speaker 9: not strictly a fear good, so it does play one

333
00:16:46,560 --> 00:16:49,760
Speaker 9: on TV. It is it is the market's best estimate

334
00:16:49,800 --> 00:16:52,800
Speaker 9: of volatility over the coming thirty days. And we've gone

335
00:16:52,800 --> 00:16:57,320
Speaker 9: from fairly you know, fairly high anticipation of volatility. You know,

336
00:16:57,360 --> 00:16:59,360
Speaker 9: we were about twenty one I think, you know, a

337
00:16:59,400 --> 00:17:02,520
Speaker 9: week ago, and now we have a fifteen handle. I'll

338
00:17:02,600 --> 00:17:04,719
Speaker 9: argue there's a lot of what I'm going to call

339
00:17:04,840 --> 00:17:07,760
Speaker 9: known unknowns coming at us in the coming thirty days,

340
00:17:07,800 --> 00:17:11,600
Speaker 9: whether it's you know, executive orders, whether it's earning season,

341
00:17:11,640 --> 00:17:14,960
Speaker 9: which which comes into play very strongly. You know, we

342
00:17:15,040 --> 00:17:17,040
Speaker 9: have a FED meeting in there, even though that meeting

343
00:17:17,119 --> 00:17:19,800
Speaker 9: is not really an in play FED meeting. So for

344
00:17:19,840 --> 00:17:23,119
Speaker 9: the market to flip from having a deep respect for

345
00:17:23,200 --> 00:17:28,320
Speaker 9: volatility to you know, basically you know, being very sanguine

346
00:17:28,359 --> 00:17:31,119
Speaker 9: about it is an interesting is an interesting turn of

347
00:17:31,160 --> 00:17:33,480
Speaker 9: events in just a short period of time.

348
00:17:34,040 --> 00:17:36,280
Speaker 6: Well, we just got cp I and PPI data this

349
00:17:36,359 --> 00:17:38,879
Speaker 6: week along with some other academic data. How are you

350
00:17:38,920 --> 00:17:41,800
Speaker 6: really viewing where we stand right now with inflation in

351
00:17:41,880 --> 00:17:45,160
Speaker 6: the US and how it's impacting US equity markets.

352
00:17:46,040 --> 00:17:48,840
Speaker 9: Well, I mean, certainly the markets love this number. And

353
00:17:48,880 --> 00:17:51,440
Speaker 9: again I think that that you know, when you put

354
00:17:51,440 --> 00:17:54,080
Speaker 9: in perspective the move that we had based on you know,

355
00:17:54,600 --> 00:17:59,520
Speaker 9: a nice but small beat on monthly cp I and

356
00:17:59,560 --> 00:18:02,199
Speaker 9: pp I, those are those are okay, and that's you know,

357
00:18:02,280 --> 00:18:05,240
Speaker 9: we certainly want to see inflation moderate, but you know,

358
00:18:05,240 --> 00:18:08,439
Speaker 9: we're starting to see commodity prices tick up higher. I know,

359
00:18:08,520 --> 00:18:10,879
Speaker 9: I know alex is all over commodity prices and we

360
00:18:10,960 --> 00:18:13,359
Speaker 9: have seen those tick up. And you know, it's nice

361
00:18:13,359 --> 00:18:15,400
Speaker 9: to look at the core and say, let's exclude food

362
00:18:15,400 --> 00:18:18,239
Speaker 9: and energy. But ultimately, when you talk about when you

363
00:18:18,240 --> 00:18:21,639
Speaker 9: talk to people about what constitutes inflation, they're going to

364
00:18:21,680 --> 00:18:23,359
Speaker 9: tell you about the price of gas and the price

365
00:18:23,359 --> 00:18:26,480
Speaker 9: of eggs, and you know, and you know, and that's

366
00:18:26,520 --> 00:18:30,080
Speaker 9: not to say things like you know, lumber and copper

367
00:18:30,160 --> 00:18:32,760
Speaker 9: and some other things which which have been seeing some

368
00:18:32,800 --> 00:18:37,000
Speaker 9: steady gains and probably you know, I'm not a commodities analyst,

369
00:18:37,000 --> 00:18:39,280
Speaker 9: but I can't see that pressure easing too much with

370
00:18:39,320 --> 00:18:41,720
Speaker 9: the need to build a big piece of Los Angeles

371
00:18:41,760 --> 00:18:42,760
Speaker 9: back in the coming days.

372
00:18:42,760 --> 00:18:43,479
Speaker 3: Completely right.

373
00:18:43,800 --> 00:18:45,520
Speaker 2: I was just talking Matt Miller about that when he

374
00:18:45,640 --> 00:18:49,440
Speaker 2: was on TV with me yesterday on that you need

375
00:18:49,480 --> 00:18:52,800
Speaker 2: and that's copper to lumber steal the whole thing.

376
00:18:53,160 --> 00:18:56,480
Speaker 3: Scott, you totally Steve. Sorry, I always call you Scott.

377
00:18:57,240 --> 00:19:02,280
Speaker 2: Do that, Steve, you didn't disappoint you totally nailed it. Sasnic,

378
00:19:02,359 --> 00:19:05,000
Speaker 2: chief strategist at Interactor Brokers, we appreciate you, Thank you

379
00:19:05,080 --> 00:19:06,360
Speaker 2: so very much.

380
00:19:08,119 --> 00:19:11,840
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

381
00:19:11,920 --> 00:19:15,000
Speaker 1: weekdays at ten am Eastern on Apple, Corplay and Android

382
00:19:15,000 --> 00:19:18,320
Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

383
00:19:18,359 --> 00:19:21,920
Speaker 1: you get your podcasts, or watch us live on YouTube.

384
00:19:22,720 --> 00:19:27,200
Speaker 2: Alex You alongside Marmalinda Paul Sweeni is off today. One

385
00:19:27,320 --> 00:19:30,840
Speaker 2: of the staples that we've seen in the market and

386
00:19:30,880 --> 00:19:34,480
Speaker 2: the expectations, just ask any bank CEO, is the unleashing

387
00:19:34,600 --> 00:19:37,400
Speaker 2: of m and A put in the next Trump era. Right,

388
00:19:37,440 --> 00:19:42,000
Speaker 2: you got deregulation, lower taxes and lower rates and all

389
00:19:42,040 --> 00:19:43,879
Speaker 2: of that should trigger some massive m and A. So

390
00:19:43,880 --> 00:19:46,359
Speaker 2: I wanted to get some understanding of maybe what sectors

391
00:19:46,400 --> 00:19:47,800
Speaker 2: and what that actually looks like.

392
00:19:48,119 --> 00:19:49,760
Speaker 3: Joining US now is Kristin Pothier.

393
00:19:50,080 --> 00:19:53,679
Speaker 2: She is a US sector leader for Life Sciences at

394
00:19:53,720 --> 00:19:57,359
Speaker 2: KPMG and she joins US now from Boston. So, you

395
00:19:57,400 --> 00:20:01,440
Speaker 2: guys recently issued the findings of twenty twenty five Healthcare

396
00:20:01,520 --> 00:20:03,720
Speaker 2: and Life Science's investment Outlook.

397
00:20:04,400 --> 00:20:07,640
Speaker 3: We've seen like four hundred and ninety two billion.

398
00:20:07,320 --> 00:20:09,159
Speaker 2: Dollars worth of value so far of M and A

399
00:20:09,240 --> 00:20:10,760
Speaker 2: in just the last three months.

400
00:20:11,040 --> 00:20:12,080
Speaker 3: What are you guys expecting?

401
00:20:13,960 --> 00:20:16,280
Speaker 10: Thank you and thanks Nora and Alex for having me

402
00:20:16,359 --> 00:20:19,359
Speaker 10: on the line. I am fresh from the twenty twenty

403
00:20:19,359 --> 00:20:22,200
Speaker 10: five JP Morgan Conference in San Francisco, which is where

404
00:20:22,240 --> 00:20:26,160
Speaker 10: all the healthcare and life sciences companies come to run

405
00:20:26,200 --> 00:20:29,080
Speaker 10: across Union Square together and the start the year and

406
00:20:29,160 --> 00:20:32,080
Speaker 10: do deals. And I would say that the sentiment it

407
00:20:32,119 --> 00:20:35,280
Speaker 10: is so exciting for life sciences as we go into

408
00:20:35,320 --> 00:20:37,680
Speaker 10: twenty twenty five. And there's a couple of different reasons

409
00:20:37,680 --> 00:20:40,320
Speaker 10: for that. First, M and A is back, right, and

410
00:20:40,359 --> 00:20:41,880
Speaker 10: so when you look at that, and you look at

411
00:20:41,920 --> 00:20:45,000
Speaker 10: all of the innovation that's needed for pharma to continue

412
00:20:45,000 --> 00:20:48,480
Speaker 10: to fill their pipelines for precision medicine to be able

413
00:20:48,520 --> 00:20:51,080
Speaker 10: to come to the brink, for diagnostics companies to recover,

414
00:20:51,119 --> 00:20:54,359
Speaker 10: for device companies to recover. That is the key to

415
00:20:54,440 --> 00:20:57,200
Speaker 10: what we're seeing and after a pretty tepid twenty twenty

416
00:20:57,240 --> 00:21:00,480
Speaker 10: four and some conservatism in twenty twenty four where M

417
00:21:00,560 --> 00:21:02,520
Speaker 10: and A is back and M and A is exciting

418
00:21:02,760 --> 00:21:05,399
Speaker 10: within healthcare and life sciences, and then the innovation that

419
00:21:05,440 --> 00:21:06,200
Speaker 10: it comes with.

420
00:21:06,960 --> 00:21:09,000
Speaker 6: Well, you mentioned that AI is expected to be a

421
00:21:09,040 --> 00:21:12,080
Speaker 6: significant driver of life sciences deals this year, but you

422
00:21:12,119 --> 00:21:15,760
Speaker 6: particularly point out and impact in tools and diagnostics.

423
00:21:15,800 --> 00:21:17,399
Speaker 5: Can you talk to us a little bit more about that.

424
00:21:18,680 --> 00:21:23,320
Speaker 10: Absolutely, AI is an ecosystem approach in healthcare and life sciences,

425
00:21:23,359 --> 00:21:25,639
Speaker 10: So it's not just about what it can do for

426
00:21:25,720 --> 00:21:28,520
Speaker 10: drug discovery, but it's also about how it can just

427
00:21:28,560 --> 00:21:31,439
Speaker 10: shuttle a patient from one place to another, whether it

428
00:21:31,480 --> 00:21:34,000
Speaker 10: be in basic drug discovery, all the way into through

429
00:21:34,119 --> 00:21:37,040
Speaker 10: till diligence, and all the way in through patient care.

430
00:21:37,119 --> 00:21:40,480
Speaker 10: And what we're seeing, especially in tools and diagnostics, is

431
00:21:40,840 --> 00:21:44,439
Speaker 10: those have always been those gatekeepers or those gate openers

432
00:21:44,760 --> 00:21:48,040
Speaker 10: to our therapeutics, our targeted therapeutics of the future. With

433
00:21:48,240 --> 00:21:53,480
Speaker 10: AI and AI being able to affect pathology diagnoses and

434
00:21:53,560 --> 00:21:58,359
Speaker 10: able to affect blood diagnoses. It allows us to more carefully,

435
00:21:58,520 --> 00:22:03,639
Speaker 10: more efficiently, and more rapidly shuttle patients from one place

436
00:22:03,680 --> 00:22:06,560
Speaker 10: to another, and it's really coming out to be much

437
00:22:06,600 --> 00:22:11,560
Speaker 10: more effective than human eye as well. So it's very exciting.

438
00:22:11,600 --> 00:22:14,840
Speaker 10: It was all over JP Morgan this week, and it

439
00:22:14,880 --> 00:22:17,920
Speaker 10: will continue to be something that's highly valued and highly

440
00:22:17,960 --> 00:22:20,280
Speaker 10: a part of the ecosystem healthcareline science.

441
00:22:20,119 --> 00:22:22,119
Speaker 2: Is what type of M and A do you expect?

442
00:22:22,119 --> 00:22:24,679
Speaker 2: Are these going to be transformational deals? Are they going

443
00:22:24,760 --> 00:22:28,160
Speaker 2: to be bolt on deals? What are you guys modeling out?

444
00:22:29,320 --> 00:22:32,080
Speaker 10: Yeah? Absolutely, and we're seeing a big mix this year.

445
00:22:32,359 --> 00:22:35,919
Speaker 10: As you can see, there is already several ten plus

446
00:22:35,960 --> 00:22:38,719
Speaker 10: billion dollar deals that have happened within healthcare and life

447
00:22:38,760 --> 00:22:41,320
Speaker 10: sciences over the last couple of months. As both our

448
00:22:41,320 --> 00:22:46,000
Speaker 10: pharmaceutical companies and our device companies really rechange their portfolios

449
00:22:46,040 --> 00:22:49,439
Speaker 10: and focus on that innovation, we also see a number

450
00:22:49,440 --> 00:22:53,280
Speaker 10: of bolt on deals because as those portfolios continue to shape,

451
00:22:53,560 --> 00:22:56,680
Speaker 10: there's going to be areas where a pharma company only

452
00:22:56,720 --> 00:22:59,639
Speaker 10: needs a certain piece of that innovation puzzle to be

453
00:22:59,680 --> 00:23:02,480
Speaker 10: able to come in and that's a bolt on deal. Also,

454
00:23:02,520 --> 00:23:05,000
Speaker 10: what you'll see in life sciences in general is a

455
00:23:05,040 --> 00:23:08,000
Speaker 10: lot of that innovation isn't coming from our biggest pharmas

456
00:23:08,040 --> 00:23:11,359
Speaker 10: it's coming from our smaller biotechs, and so therefore, just

457
00:23:11,400 --> 00:23:14,280
Speaker 10: by nature, those would be smaller deals. In general, you

458
00:23:14,320 --> 00:23:16,919
Speaker 10: see the volumes continue to go up and the deals

459
00:23:16,960 --> 00:23:19,919
Speaker 10: continue to be bite size and a little bit bigger

460
00:23:19,960 --> 00:23:22,280
Speaker 10: than that. But it allows us to be able to

461
00:23:22,359 --> 00:23:25,159
Speaker 10: have that detailed diligence that goes along with it and

462
00:23:25,200 --> 00:23:28,679
Speaker 10: be able to really understand what's going on with those portfolios.

463
00:23:28,400 --> 00:23:31,679
Speaker 6: Kristin, According to your firm's most recent survey, what factors

464
00:23:31,720 --> 00:23:34,080
Speaker 6: are most likely to impact the deal activity this year?

465
00:23:34,200 --> 00:23:36,720
Speaker 6: According to what you've heard from respondents.

466
00:23:37,119 --> 00:23:40,679
Speaker 10: Yeah, the number one is getting the most out of

467
00:23:40,680 --> 00:23:43,680
Speaker 10: the innovation that's coming through each one of these deals.

468
00:23:43,880 --> 00:23:46,719
Speaker 10: And what I mean by that is being able to

469
00:23:46,880 --> 00:23:50,920
Speaker 10: look at the most innovative deal making that's coming through

470
00:23:51,080 --> 00:23:53,399
Speaker 10: with the diligence that goes along with it. And so

471
00:23:53,640 --> 00:23:56,880
Speaker 10: that is one aspect of it is pure innovation, What

472
00:23:57,000 --> 00:24:00,399
Speaker 10: is innovative and what isn't innovative in the space. Second,

473
00:24:00,440 --> 00:24:03,360
Speaker 10: really is is it going to be able to highlight

474
00:24:03,480 --> 00:24:06,679
Speaker 10: an entire ecosystem and really be able to factor in

475
00:24:06,760 --> 00:24:08,679
Speaker 10: not only what the pharma is doing, but what our

476
00:24:08,720 --> 00:24:11,239
Speaker 10: physicians are doing, what our patients are doing, and what

477
00:24:11,320 --> 00:24:14,080
Speaker 10: our diagnostics companies are doing as well. That is that

478
00:24:14,160 --> 00:24:17,399
Speaker 10: second component. And then the final component that is really

479
00:24:17,440 --> 00:24:20,760
Speaker 10: important here as we think about M and A is valuation,

480
00:24:21,200 --> 00:24:25,080
Speaker 10: and there is a mix of what both our corporates

481
00:24:25,119 --> 00:24:28,360
Speaker 10: are thinking about valuation and our pees are thinking about valuation.

482
00:24:29,000 --> 00:24:32,960
Speaker 10: What we've seen is for our corporates, they are expecting

483
00:24:33,040 --> 00:24:36,240
Speaker 10: valuations to continue to go up. That's because they've been

484
00:24:36,280 --> 00:24:38,719
Speaker 10: in this market this entire time. They've been looking at

485
00:24:38,760 --> 00:24:41,560
Speaker 10: all of these different assets, and the higher the innovation,

486
00:24:41,960 --> 00:24:44,679
Speaker 10: the more the valuation continues to tick up. Maybe not

487
00:24:44,720 --> 00:24:47,600
Speaker 10: to the levels expected that we're happening in twenty twenty one,

488
00:24:47,920 --> 00:24:50,920
Speaker 10: but right around there. Our pes, though, on the other hand,

489
00:24:50,960 --> 00:24:53,639
Speaker 10: are much more conservative. What they're seeing is from a

490
00:24:53,680 --> 00:24:56,120
Speaker 10: cell side perspective, if they're going to sell the assets,

491
00:24:56,200 --> 00:24:58,240
Speaker 10: they have to be able to have valuations that are

492
00:24:58,240 --> 00:25:01,280
Speaker 10: more realistic. And on the BUI, it could just be

493
00:25:01,359 --> 00:25:04,280
Speaker 10: because they're very hopeful that the valuations will be a

494
00:25:04,320 --> 00:25:06,880
Speaker 10: little bit lower so that therefore they can come in

495
00:25:06,920 --> 00:25:09,440
Speaker 10: and continue to deal make like we've seen in the past.

496
00:25:09,960 --> 00:25:11,880
Speaker 2: So I love that you brought that up because it's

497
00:25:11,920 --> 00:25:14,280
Speaker 2: always the bid ask, right, Like that's the tough part

498
00:25:14,280 --> 00:25:15,359
Speaker 2: of getting M and A done.

499
00:25:15,400 --> 00:25:16,960
Speaker 3: And I was going to wonder with.

500
00:25:17,000 --> 00:25:19,720
Speaker 2: Healthcare in particular, like what the catalyst is, right because

501
00:25:19,760 --> 00:25:22,199
Speaker 2: for banks, we can see the deregulation and the end

502
00:25:22,200 --> 00:25:25,159
Speaker 2: of Basil three for example, or rolling back capital requirements.

503
00:25:25,280 --> 00:25:27,399
Speaker 2: That's really going to help some of the regional banks

504
00:25:27,680 --> 00:25:28,439
Speaker 2: team up together.

505
00:25:28,600 --> 00:25:28,760
Speaker 6: Right.

506
00:25:29,200 --> 00:25:32,600
Speaker 2: Healthcare in some ways doesn't have that particular catalyst. So

507
00:25:32,720 --> 00:25:34,240
Speaker 2: what do you think is going to get that bid

508
00:25:34,280 --> 00:25:34,800
Speaker 2: ask there?

509
00:25:36,480 --> 00:25:39,840
Speaker 10: I think that continued comfort in new administration coming in

510
00:25:40,200 --> 00:25:43,199
Speaker 10: and some of the relaxation of the fears that we

511
00:25:43,320 --> 00:25:46,159
Speaker 10: had in twenty twenty four going into the election, and

512
00:25:46,240 --> 00:25:50,000
Speaker 10: even just looking overall at what was happening happening internationally,

513
00:25:50,359 --> 00:25:52,639
Speaker 10: how we were thinking about innovation and being able to

514
00:25:52,760 --> 00:25:55,840
Speaker 10: bring access to patients worldwide. As we all get much

515
00:25:55,880 --> 00:26:00,119
Speaker 10: more comfortable with that space, our clients are saying that

516
00:25:59,840 --> 00:26:02,560
Speaker 10: that is going to be that catalyst. So being able

517
00:26:02,600 --> 00:26:04,600
Speaker 10: to come into this new year, and we've seen it

518
00:26:04,640 --> 00:26:06,920
Speaker 10: at JP Morgan this week, come into this new year,

519
00:26:07,000 --> 00:26:09,600
Speaker 10: get excited about the innovation that's happening, be able to

520
00:26:09,680 --> 00:26:13,680
Speaker 10: pay and realistically do that diligence and tick and tie

521
00:26:13,800 --> 00:26:17,560
Speaker 10: every single piece of the financial, the commercial, the tax

522
00:26:17,800 --> 00:26:20,400
Speaker 10: and other ramifications of each of these deals and then

523
00:26:20,400 --> 00:26:21,520
Speaker 10: get them going and moving.

524
00:26:21,920 --> 00:26:25,359
Speaker 2: Yeah, expectations though definitely high, so we'll see how that

525
00:26:25,400 --> 00:26:27,000
Speaker 2: works out. Kristin, thanks lot, It was really great to

526
00:26:27,000 --> 00:26:28,800
Speaker 2: get your perspective. I love that you were fresh off

527
00:26:28,800 --> 00:26:31,120
Speaker 2: at the JP Morgan Healthcare conference. We were there as well,

528
00:26:31,520 --> 00:26:34,200
Speaker 2: M and I definitely a focus there. Kristin Pothea joining

529
00:26:34,280 --> 00:26:37,960
Speaker 2: us from KPMG. She's the US Hector said sector lead

530
00:26:38,680 --> 00:26:39,960
Speaker 2: for life sciences.

531
00:26:40,640 --> 00:26:45,320
Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

532
00:26:45,520 --> 00:26:49,480
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

533
00:26:49,680 --> 00:26:52,960
Speaker 1: ten am to noon Eastern on Bloomberg dot com, the

534
00:26:53,080 --> 00:26:56,959
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

535
00:26:56,960 --> 00:27:00,280
Speaker 1: can also watch us live every weekday on YouTube and

536
00:27:00,480 --> 00:27:02,400
Speaker 1: always on the Bloomberg terminal