WEBVTT - Debt Ceiling, Retail, Noom, and Netflix (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.960 my co host Matt Miller. Every business day we bring 0:00:07.000 --> 0:00:11.560 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.600 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:20.520 at Bloomberg dot com slash podcast. 0:00:20.880 --> 0:00:22.439 I let's getting a little bit more insight on the 0:00:22.480 --> 0:00:24.560 macro front and the developments here. Because it's that debt 0:00:24.560 --> 0:00:28.160 ceiling debate. It's taking over the markets, I would argue, 0:00:28.200 --> 0:00:32.760 overshadowing some of the other stories like inflation, Chinese growth, geopolitics. 0:00:32.800 --> 0:00:34.519 There's a lot of doom and gloom out there, but 0:00:34.600 --> 0:00:37.280 let's not dwell on the bad. Let's bring in Bloomberg 0:00:37.280 --> 0:00:41.080 Intelligence analysts, Audrey child Freeman, our chief g ten FX 0:00:41.080 --> 0:00:45.400 strategist over at Bloomberg Intelligence, and Dwayne Wright, senior government 0:00:45.440 --> 0:00:48.240 analysts with BI as well. Dwayne, I want to start 0:00:48.240 --> 0:00:51.080 with you and talk to us a little bit about 0:00:51.120 --> 0:00:54.360 the developments here. I believe M Kevin McCarthy has now 0:00:54.440 --> 0:00:59.040 said that there are negotiations happening this morning. But what's 0:00:59.200 --> 0:01:01.360 the sticking point? What can't they agree on. 0:01:02.360 --> 0:01:06.080 Well, thanks. I think it's the same conversation we've been 0:01:06.120 --> 0:01:08.800 having over the last or we've been hearing about over 0:01:08.840 --> 0:01:12.000 the last couple of weeks, and this is yet another 0:01:12.120 --> 0:01:14.760 mini storm that we think will end up before we 0:01:14.800 --> 0:01:19.240 get to the calm. It ends up being around what 0:01:19.400 --> 0:01:23.200 level of spending cuts do Republicans want and then they're 0:01:23.240 --> 0:01:27.000 willing to accept. What level of spending cuts are Democrats 0:01:27.080 --> 0:01:28.039 willing to agree to? 0:01:28.120 --> 0:01:28.840 And there's about one. 0:01:28.840 --> 0:01:32.440 Hundred and thirty billion dollars golf between the two parties. 0:01:32.959 --> 0:01:35.280 You know, we're talking about going back to last year's 0:01:35.280 --> 0:01:40.959 spending or working from this year spending. There's other policies 0:01:41.000 --> 0:01:46.080 at play related to unspent COVID money. There's what to 0:01:46.080 --> 0:01:50.880 do about defense spending. As much as Republicans want to 0:01:51.000 --> 0:01:55.160 dial down or dial back the spending on discretionary spent funding, 0:01:55.960 --> 0:01:58.600 they also want to increase spending on the defense side, 0:01:58.640 --> 0:02:00.560 which Democrats have said is is a bit of a 0:02:00.600 --> 0:02:03.760 non starter. And then you have all these other policies 0:02:03.800 --> 0:02:07.800 that deal with some of the social safety net programs. 0:02:08.160 --> 0:02:13.240 Should we have work requirements for healthcare, specifically in the 0:02:13.280 --> 0:02:16.840 Medicaid program? Democrats have said no, and Republicans want to 0:02:16.880 --> 0:02:20.680 expand on work requirements into healthcare. So a lot of 0:02:20.200 --> 0:02:24.160 the sticking points that we saw that we're all in 0:02:24.240 --> 0:02:28.160 the Republican House past bill that Democrats said no to, 0:02:29.120 --> 0:02:32.200 those are still on the table, and those are still 0:02:32.240 --> 0:02:34.400 the sticking points that they're trying to work through. 0:02:35.639 --> 0:02:36.000 Audrey. 0:02:36.520 --> 0:02:38.440 I want to bring you in here because we've seen 0:02:38.560 --> 0:02:42.320 the dollar rising for the most part over the course 0:02:42.360 --> 0:02:45.600 of the month of May, Bloomberg Dollar Index up again today. 0:02:46.440 --> 0:02:49.639 I want to get your take how are markets pricing 0:02:49.680 --> 0:02:53.400 in these debt ceiling concerns, specifically around the dollar. 0:02:55.919 --> 0:02:59.920 So the dollar rebound has to be seen really up 0:03:00.120 --> 0:03:05.320 to quite a long period of under performance, and the 0:03:05.360 --> 0:03:09.520 market a couple of weeks, a few weeks ago, as 0:03:09.560 --> 0:03:14.000 you said, started to look quite underweight dollar, and I suspect, 0:03:14.080 --> 0:03:16.480 you know, if you go into this as the debt 0:03:16.800 --> 0:03:23.959 ceiling deadlines looms and uncertainty continues to increase with regard 0:03:24.000 --> 0:03:26.880 to that matter, I suspect that there will be an 0:03:26.919 --> 0:03:32.720 incentive to close those underweight dollar position and just wait 0:03:32.760 --> 0:03:37.120 and see what happens, because there's an element of uncertainty 0:03:37.320 --> 0:03:41.920 on the impact that default would have on the dollar. Obviously, 0:03:42.200 --> 0:03:46.200 it's negative, it's structurally negative. It adds onto the whole 0:03:46.280 --> 0:03:50.800 theme of the dollarization. However, in the near term, if 0:03:50.800 --> 0:03:54.480 that leads to financial market ternal which I suspect it would, 0:03:55.480 --> 0:03:59.040 and that means funding problems that could actually push the 0:03:59.080 --> 0:04:02.560 dollar higher. So I kind of feel that's one of 0:04:02.600 --> 0:04:06.520 the reasons why the dollar has been pushing higher in 0:04:06.600 --> 0:04:09.280 the past, in the past few weeks, but I feel 0:04:09.280 --> 0:04:12.280 there's no strong conviction at the moment in the market. 0:04:12.680 --> 0:04:15.200 Yeah, it feels purely defensive essentially, when you're looking at 0:04:15.280 --> 0:04:17.120 kind of the way some of the speculative funds are 0:04:17.160 --> 0:04:20.600 positioning Audie to follow upon that. Though, as soon as 0:04:20.640 --> 0:04:24.880 this dollar debate kind of disappears, or there's a solution 0:04:25.040 --> 0:04:28.239 or resolution of some sort, it's a no brainer trade 0:04:28.320 --> 0:04:31.520 and unwinding of that essentially dollar weakness. 0:04:33.240 --> 0:04:37.640 I think. So, However, compared to two or three months ago, 0:04:38.120 --> 0:04:41.280 where you know, it was the compelling trade to have on, 0:04:41.760 --> 0:04:44.880 there's a kind of fresh element of uncertainty creeping into 0:04:44.920 --> 0:04:49.120 the market. In particular, I would mention the pace of 0:04:49.160 --> 0:04:53.680 the Chinese economic recovery and the implications that would have 0:04:53.800 --> 0:04:57.920 for the global economic outlook for currencies like the euro 0:04:58.160 --> 0:05:02.240 the US dollar. So the answer to your question is yes, 0:05:03.000 --> 0:05:05.880 but I don't. I think there's a little it's a 0:05:05.920 --> 0:05:09.240 little bit less straightforward than it was. Let's say, you know, 0:05:09.360 --> 0:05:12.120 in kind of early early January. 0:05:13.400 --> 0:05:15.440 Duine, I want to bring you back in here. Talk 0:05:15.520 --> 0:05:20.159 us through the timeline for the next couple of Oh boy, 0:05:20.200 --> 0:05:22.440 we're running very close to that X date, that June 0:05:22.480 --> 0:05:24.320 first X date. Talk us through the timeline of what 0:05:24.320 --> 0:05:26.039 you're hearing from wamakers. 0:05:26.760 --> 0:05:31.360 Well, they're still talking, and I think there's a big 0:05:31.480 --> 0:05:34.240 question as to whether June first is the real X 0:05:34.360 --> 0:05:37.600 date or if it's something after that. You know, up 0:05:37.600 --> 0:05:40.800 to maybe last week or early this week, the Secretary 0:05:41.200 --> 0:05:44.600 jan had been very strong in terms of saying June 0:05:44.600 --> 0:05:46.720 one is the X date, and then kind of got 0:05:46.720 --> 0:05:50.200 a little squishy, which I think served as a bit 0:05:50.200 --> 0:05:54.960 of a pressure release valve as far as these conversations go. 0:05:55.480 --> 0:05:58.680 But there there are going to be at some point 0:05:58.800 --> 0:06:01.760 over the next week or so that pressure is going 0:06:01.760 --> 0:06:04.359 to ramp up as we get to June first, and 0:06:04.400 --> 0:06:09.240 potentially maybe get past June first. And you got to 0:06:09.240 --> 0:06:11.840 think about it from a procedural standpoint. In the House 0:06:11.880 --> 0:06:15.159 and even in the Senate, once a deal is reached 0:06:15.160 --> 0:06:18.200 between the President and the Speaker, it's going to take 0:06:18.200 --> 0:06:21.240 about three days to get out of the House. And 0:06:21.279 --> 0:06:24.960 that's because Speaker McCarthy has said any bill that gets 0:06:25.000 --> 0:06:28.080 passed out of the House longmakers will have three days 0:06:28.120 --> 0:06:31.520 to review. So you have to build in seventy two hours. 0:06:32.080 --> 0:06:34.159 You don't have to build in some more time to 0:06:34.240 --> 0:06:37.440 potentially get it through a Senate that may not want 0:06:37.480 --> 0:06:40.080 to move on it as quickly, depending on whether you're 0:06:40.120 --> 0:06:42.160 on the right or left, and you don't like the 0:06:42.240 --> 0:06:44.800 deal and you want to slow things down. And so 0:06:45.560 --> 0:06:48.000 I think as we're looking at the timeline over the 0:06:48.080 --> 0:06:52.000 next several days, you really need to start to see 0:06:52.080 --> 0:06:57.080 something happen by around the first in order to really 0:06:57.160 --> 0:07:01.640 get a bill don it and really stave off potential default. 0:07:03.120 --> 0:07:06.159 The X date, I think such a crucial thing to 0:07:06.160 --> 0:07:09.200 talk about, because yes, it's June first, regarding headlines right now, 0:07:09.200 --> 0:07:12.720 the Janney Ellen reaffirms that June first deadline. But at 0:07:12.760 --> 0:07:13.720 the end of the day, look at what some of 0:07:13.760 --> 0:07:15.800 these Wall Street banks are saying. The range goes from 0:07:15.880 --> 0:07:18.960 June first to June fifteenth, and then you have the 0:07:19.320 --> 0:07:21.360 real market bears. You're saying, actually the real X state 0:07:21.400 --> 0:07:24.320 for the markets is May twenty six, so right before 0:07:24.320 --> 0:07:29.240 that Memorial Day weekend. Audrey Child Freeman of Bloomberg Intelligence, 0:07:29.240 --> 0:07:32.800 we think he has always along with Dwayne Wright, thank 0:07:32.880 --> 0:07:37.200 you as well, our senior government analyst with Bloomberg Intelligence. Folks. 0:07:37.280 --> 0:07:39.240 The doom and gloom is just going to ramp up 0:07:39.280 --> 0:07:39.560 from here. 0:07:39.640 --> 0:07:41.360 Is making me a little bit scared, as he was 0:07:41.360 --> 0:07:44.400 talking about all those how long it needs in order 0:07:44.480 --> 0:07:46.320 to just get past these procedural votes. 0:07:46.400 --> 0:07:48.560 Yes, I feel bad for those staffers. Stick with us. 0:07:48.600 --> 0:07:49.600 This is Bloomberg. 0:07:51.120 --> 0:07:55.000 You're listening to the teenth ken'sher live program Bloomberg Markets 0:07:55.040 --> 0:07:58.120 weekdays at ten am Eastern on Bloomberg dot Com, the 0:07:58.200 --> 0:08:01.760 iHeartRadio app, and the Bloomberg Business or listen on demand 0:08:01.800 --> 0:08:03.320 wherever you get your podcast. 0:08:05.360 --> 0:08:08.760 Let's bring in some experts here. Diana Rossero, Pana equity 0:08:08.800 --> 0:08:12.240 research analyst over at Bloomberg Intelligence, joins us alongside a 0:08:12.280 --> 0:08:16.760 personal favorite of mine and a Dallas resident. Again another 0:08:17.080 --> 0:08:20.800 reason to love him, Brendan Case, our Bloomberg News retail reporter. 0:08:20.880 --> 0:08:23.360 Brendan I want to start with you here the difference 0:08:23.360 --> 0:08:27.920 between a slowing consumer and a collapsing consumer. Are we 0:08:27.960 --> 0:08:28.400 there yet? 0:08:30.320 --> 0:08:32.880 Well, I think that we have to stick with slowing 0:08:33.040 --> 0:08:35.440 for the moment, and we're definitely seeing signs of that 0:08:36.040 --> 0:08:39.920 all over the place, you know, starting with Target and Walmart, 0:08:40.120 --> 0:08:45.120 you know, saying that last week, plenty of additional signs. Now. 0:08:46.000 --> 0:08:49.920 Pet Co reported results today. Not a huge company obviously, 0:08:49.960 --> 0:08:53.000 but sort of an interesting category because people tend to 0:08:53.040 --> 0:08:56.080 spend pretty heavily on their pets. And there again, you know, 0:08:56.080 --> 0:08:58.760 they're seeing strong business in the essentials such as food, 0:08:58.880 --> 0:09:03.120 but a pullback from the kind of toys and leashes 0:09:03.280 --> 0:09:07.000 that people would buy more of in good times. I 0:09:07.000 --> 0:09:11.319 don't think that we're ready to talk about a collapse yet, 0:09:11.360 --> 0:09:14.280 but I do think it's a watch item. And you know, 0:09:14.360 --> 0:09:16.520 I don't think that anybody would say that we've hit 0:09:16.800 --> 0:09:17.920 bottom at this point. 0:09:19.080 --> 0:09:23.840 Diana Brendan just mentioned some of that discrepancy we've seen 0:09:23.920 --> 0:09:27.160 between us spending on things like food, both for humans 0:09:27.200 --> 0:09:31.560 and for pets. It turns out as well against the 0:09:31.640 --> 0:09:35.240 sort of discretionary items, whether it's leashes, collars, and toys 0:09:35.240 --> 0:09:40.839 at Petco or electronics perhaps at places like Walmart. I mean, 0:09:40.880 --> 0:09:44.319 how much pressure does this actually put on the companies 0:09:45.000 --> 0:09:47.959 in terms of margin, like, aren't they happy that things 0:09:48.000 --> 0:09:49.960 that people are still buying their stuff? 0:09:51.679 --> 0:09:57.000 Yes? So basically what I got from the call earlier 0:09:57.080 --> 0:10:02.960 this morning from Petco was that there's a bifurcation of 0:10:03.000 --> 0:10:07.680 the consumer. You have consumers that are very dedicated to 0:10:07.920 --> 0:10:12.080 the health and wellness of their pets, and even on 0:10:14.000 --> 0:10:18.880 consumables such as food, you have people trying to buy 0:10:19.000 --> 0:10:25.400 premium food, which obviously is more expensive than regular pet food. 0:10:25.559 --> 0:10:30.200 So there's that, but there's also that seeking for value 0:10:30.320 --> 0:10:34.480 that you see for Target and Walmart. Now this is 0:10:35.160 --> 0:10:38.679 obviously the second part. The seeking value is a little 0:10:38.679 --> 0:10:46.200 bit problematic for companies because usually the essentials are lower margin. 0:10:46.280 --> 0:10:49.480 They tend to be lower margin compared to the discretionary category. 0:10:49.600 --> 0:10:53.520 So you will see, in addition to labor and all 0:10:53.559 --> 0:10:56.760 of the supply chain costs increasing in the past couple 0:10:56.760 --> 0:10:59.920 of years, you see an added pressure of lower margin 0:11:00.280 --> 0:11:02.160 items being more in demand. 0:11:03.520 --> 0:11:08.160 So that is then necessarily a function of that kind 0:11:08.160 --> 0:11:10.839 of recessionary call. It feels like essentially that you're going 0:11:10.840 --> 0:11:13.959 to start tracking the higher end consumer to more perhaps 0:11:14.000 --> 0:11:17.400 generic goods, at least in the case of Walmart for example, 0:11:17.960 --> 0:11:22.480 When does that slow completely from from the consumer's point 0:11:22.480 --> 0:11:22.880 of view. 0:11:24.920 --> 0:11:28.560 Well, I think it has to do with consumer sentiment, 0:11:29.120 --> 0:11:35.320 has a lot in play obviously unemployment or lack thereof. 0:11:36.240 --> 0:11:41.920 It seems that obviously this is an unusual economic quote 0:11:41.960 --> 0:11:47.240 unquote downturn because unemployment seems to be quite low compared 0:11:47.240 --> 0:11:51.240 to you know, previous recessions or slow Dance or something 0:11:51.280 --> 0:11:54.080 like that. So yeah, I would say it's mostly on 0:11:54.440 --> 0:11:59.000 a consumer consumer sentiment, and I think how comfortable they 0:11:59.040 --> 0:12:01.679 feel with the feature sure and their ability to pay 0:12:01.720 --> 0:12:02.840 their bills going forward. 0:12:03.880 --> 0:12:06.520 Brendan, what have you heard from some of these executives 0:12:06.559 --> 0:12:09.840 about the potential for the consumer to just like simply 0:12:10.000 --> 0:12:14.080 hit a wall, stop going to stores, stop going online 0:12:14.120 --> 0:12:19.600 simply because the inflationary pressures on their pocketbook are too much, 0:12:19.880 --> 0:12:24.240 or or what would it take. Essentially, have any executives 0:12:24.320 --> 0:12:26.600 kind of address this, You. 0:12:26.559 --> 0:12:29.520 Know, I don't think that that that is something that 0:12:29.520 --> 0:12:33.240 they've really wrung the alarm bell about. They're talking much 0:12:33.280 --> 0:12:37.680 more about slowing and if you take a step back 0:12:37.720 --> 0:12:41.040 from some of the kind of the big mass market 0:12:41.040 --> 0:12:43.360 retailers for one second, you know, there's still signs of 0:12:43.360 --> 0:12:45.840 strength out there too, you know, sort of surprisingly strong 0:12:45.920 --> 0:12:49.200 sales at Abercrombie and Fitch. You know, we've heard about 0:12:49.200 --> 0:12:53.120 this morning. You know, there's signs of progress even at 0:12:53.520 --> 0:12:57.200 Cohl's right now, so more of a mixed bag than 0:12:58.120 --> 0:13:01.600 a sense of things falling apart. But it said, if 0:13:01.600 --> 0:13:04.359 you listen to Walmart and Target, they're both pretty cautious 0:13:04.440 --> 0:13:09.199 about the second half. And I think that one thing 0:13:09.240 --> 0:13:14.040 that's going through their minds is that the rate increases 0:13:14.080 --> 0:13:17.640 from the FED tightening financial conditions. You know, a lot 0:13:17.679 --> 0:13:20.040 of that is probably still an effect that we have 0:13:20.240 --> 0:13:25.040 yet to feel the full force of. And so you know, 0:13:25.080 --> 0:13:29.720 there they are taking a very cautious view, albeit without 0:13:30.000 --> 0:13:33.680 talking about consumers just flat out hitting a wall. 0:13:34.440 --> 0:13:38.760 Yeah, when you think of that sort of looking ahead timeline, 0:13:39.320 --> 0:13:42.440 do you draw any consensus from what you've heard about 0:13:42.960 --> 0:13:47.320 when things might start looking up again? 0:13:49.200 --> 0:13:52.360 It feels like it's too soon to talk about that. 0:13:53.000 --> 0:13:55.160 You know. It feels like the question that's in the 0:13:55.160 --> 0:13:59.840 front of the mind for the big retailers is okay, 0:14:00.040 --> 0:14:02.200 is this going to get worse? You know, do we 0:14:02.280 --> 0:14:06.840 end up having a recession? If so, when it doesn't 0:14:06.880 --> 0:14:13.200 feel as though they are talking yet about kind of 0:14:13.240 --> 0:14:17.200 seeing you know, rays of light in the distant horizon. 0:14:17.240 --> 0:14:21.760 It feels much more like, you know, watchful, waiting, lots 0:14:21.760 --> 0:14:25.560 of caution and just not wanting to not wanting to 0:14:25.600 --> 0:14:26.400 promise too much. 0:14:27.120 --> 0:14:29.680 So Diana, in our last minute or so here talk 0:14:29.680 --> 0:14:32.320 to us about today's earning story with Cole's kss is 0:14:32.360 --> 0:14:34.000 the taker folks hied by about eight and a half 0:14:34.040 --> 0:14:37.880 percent for the stock Diana about forty five seconds. What 0:14:37.880 --> 0:14:38.440 did Coles do? 0:14:38.560 --> 0:14:38.720 Right? 0:14:40.720 --> 0:14:41.720 Yeah, I think. 0:14:41.680 --> 0:14:45.080 Going back to what we said earlier, is the consumer 0:14:45.200 --> 0:14:51.960 seeking value and having that alternative for them. It seems 0:14:52.000 --> 0:14:55.600 that that drove a lot of their sales as well, So, 0:14:56.960 --> 0:15:00.560 you know, like going back to what Brennan said, it's 0:15:00.720 --> 0:15:05.560 it's consumers just being cautious and the executive of these 0:15:05.560 --> 0:15:10.680 companies recognizing that we're you know, it's difficult out there 0:15:11.120 --> 0:15:13.680 right now, and I think it's going to be darker 0:15:13.720 --> 0:15:16.600 before it starts to be light again. 0:15:18.000 --> 0:15:20.360 Brendan ten seconds, putting on the spot anythin ad. 0:15:21.800 --> 0:15:24.720 I'm going to watch Best Buying Costco on Thursday. A 0:15:24.720 --> 0:15:28.400 lot of signals there about discretionary spending and higher end consumers. 0:15:28.800 --> 0:15:31.240 Well, we will definitely have you both back. We thank 0:15:31.280 --> 0:15:34.360 you as always, Diana, Rossaropena, equity research analyst over at 0:15:34.400 --> 0:15:38.960 Bloomberg Intelligence, and Brendan Case, our star retail reporter over 0:15:39.000 --> 0:15:39.920 in Dallas, Texas. 0:15:40.280 --> 0:15:43.400 You're listening to the tape cancer our live program, Bloomberg 0:15:43.480 --> 0:15:47.080 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:15:47.120 --> 0:15:49.200 tune in app, Bloomberg dot Com. 0:15:48.920 --> 0:15:50.360 And the Bloomberg Business App. 0:15:50.400 --> 0:15:53.200 You can also listen live on Amazon Alexa from our 0:15:53.240 --> 0:15:58.280 flagship New York station, Just say Alexa Play Bloomberg eleven thirty. 0:15:58.920 --> 0:15:59.120 Yeah. 0:15:59.120 --> 0:16:03.080 I've been so excited for this discussion, Creaty, because we're 0:16:03.120 --> 0:16:09.560 going to talk about NOOM and the potential for weight 0:16:09.600 --> 0:16:13.280 loss drugs to be part of this overall discussion on health. 0:16:13.320 --> 0:16:16.960 We bring in Linda Anagawa, chief of Medicine, as well 0:16:17.000 --> 0:16:19.920 as our Sam Fizzelli. He's a senior pharma analyst with 0:16:20.120 --> 0:16:28.360 Bloomberg Intelligence. Linda, you were brought on to to expand 0:16:28.720 --> 0:16:32.680 the ability of NOOM to bring in these weight loss drugs. 0:16:33.440 --> 0:16:35.600 Take us through the thinking here, because this isn't NOOM 0:16:35.680 --> 0:16:42.160 all about discipline and improving your healthiness of your lifestyle, 0:16:42.560 --> 0:16:45.680 and yet we're turning to medication potentially to bring down 0:16:45.960 --> 0:16:50.080 weight in people who are obese. 0:16:50.280 --> 0:16:50.520 Yeah. 0:16:50.560 --> 0:16:51.200 Absolutely. 0:16:51.520 --> 0:16:55.440 I'll tell you about NeoMed, where a program dedicated to 0:16:55.480 --> 0:16:58.800 fighting the disease of obesity using all of the best 0:16:58.840 --> 0:17:03.160 available scientific tools that we have. And what makes us 0:17:03.280 --> 0:17:08.159 unique is that we are still combining our suite of 0:17:09.119 --> 0:17:15.000 personalized psychological tools along with telehealth services to help people 0:17:15.040 --> 0:17:18.720 achieve not just the lasting weight loss, but also the 0:17:18.800 --> 0:17:21.600 improved health outcomes. 0:17:23.640 --> 0:17:28.520 I mean, that's so interesting because these gop one drugs 0:17:28.640 --> 0:17:32.040 seem to really be a game changer in the overall 0:17:32.080 --> 0:17:37.800 idea of weight loss. Whether it's ozempig, whether it's the 0:17:37.880 --> 0:17:43.720 various other options out there, how do you fit these 0:17:43.920 --> 0:17:50.960 in for someone who's coming to noom med. So the 0:17:50.960 --> 0:17:55.080 introduction of the new, highly effective anti obesity medicines, without 0:17:55.080 --> 0:17:59.080 a doubt, have revolutionized this landscape for sustainable weight loss, 0:18:00.080 --> 0:18:03.720 you know, but for the millions of Americans taking these medications, 0:18:04.720 --> 0:18:09.800 lasting success is really not often achievable without having that 0:18:10.040 --> 0:18:14.280 anchor in behavioral change. I mean, as a doctor, I've 0:18:14.400 --> 0:18:17.960 prescribed these medications hundreds of times and I've seen some 0:18:18.000 --> 0:18:22.760 people even gain weight on them. So new med really 0:18:22.760 --> 0:18:25.200 has the only clinical program that's built on our best 0:18:25.240 --> 0:18:30.040 in class flagship behavior change platform. And that gives us 0:18:30.080 --> 0:18:35.160 an incredibly powerful way to address both the biology as 0:18:35.280 --> 0:18:41.040 well as the psychology that's necessary in the fight against obesity. 0:18:42.359 --> 0:18:46.040 I want to bring in Sam Fizzelli here. He leads 0:18:46.119 --> 0:18:51.320 our pharma coverage over at Bloomberg Intelligence. Sam double question here, 0:18:51.440 --> 0:18:53.520 first set the stage for us in terms of the 0:18:53.600 --> 0:18:57.040 landscape of the industry and of these products, and then 0:18:57.080 --> 0:18:58.879 you know, feel free to ask one to question yourself. 0:18:59.200 --> 0:19:02.920 Oh sure, thank you, thanks for having me on. So obviously, 0:19:03.320 --> 0:19:06.639 there's been drugs that have been in development or used 0:19:06.920 --> 0:19:10.600 for many years for obesity, but very few of them 0:19:10.600 --> 0:19:15.440 have actually been successful, really commercially until recently because the 0:19:15.480 --> 0:19:18.159 percentage of weight loss that they were giving, perhaps some 0:19:18.200 --> 0:19:20.159 of the side effect issues that they had were just 0:19:20.200 --> 0:19:24.800 basically not going conducive to use. Now we've got these 0:19:24.840 --> 0:19:27.760 drugs which have got pretty good safety at least in 0:19:27.880 --> 0:19:30.920 diabetic patients, have been used for years, not that these 0:19:30.920 --> 0:19:33.680 doses though, and now you get significant efficacy. And I 0:19:33.760 --> 0:19:37.359 think doctor Anagawa you've mentioned in the company's mentioned in 0:19:37.359 --> 0:19:40.800 the press release the twelve point odd percent twelve point 0:19:40.840 --> 0:19:43.560 four percent, I think that you get with we go 0:19:43.720 --> 0:19:46.239 V at sixty eight weeks whereas now soon we're going 0:19:46.280 --> 0:19:51.440 to have Lily's to zeppetite or which is the same 0:19:51.480 --> 0:19:55.040 agent used in Munjaro for diabetes, which is clocking it 0:19:55.119 --> 0:19:57.840 around eighteen percent proceed word just at weight loss. So 0:19:57.880 --> 0:20:00.639 these are significant numbers, and I think both companies are 0:20:00.640 --> 0:20:02.880 trying to even push it further. Where do you think 0:20:02.880 --> 0:20:06.560 that would go in terms of the level of interest 0:20:06.600 --> 0:20:08.480 Do you think there would be major switching or do 0:20:08.480 --> 0:20:11.760 you think there's so much demand that between the two drugs, 0:20:11.800 --> 0:20:13.879 people will take whatever they can get their hands on. 0:20:15.920 --> 0:20:19.880 You know, I think that the landscape of these medications 0:20:19.920 --> 0:20:24.680 is going to continue to evolve. Absolutely. Turzeppetite is going 0:20:24.720 --> 0:20:28.280 to take us another step forward in what we are 0:20:28.400 --> 0:20:31.760 able to offer our patients suffering from this disease. What 0:20:31.960 --> 0:20:36.320 Neom's really looking to though, is not even what's immediately available, 0:20:36.520 --> 0:20:41.000 but what's coming down the horizon in the next two years, 0:20:41.240 --> 0:20:47.120 five years. And I think fundamentally, at the core of things, 0:20:47.640 --> 0:20:53.120 we still have to remember, sorry that as good as 0:20:53.160 --> 0:20:58.080 the drug trials look, they were all done with lifestyle 0:20:58.280 --> 0:21:02.800 change hand and hand, and so that still fundamentally has 0:21:02.880 --> 0:21:03.720 to be our anchor. 0:21:05.200 --> 0:21:09.000 Oh, I absolutely agree. I think the you know, there's 0:21:09.000 --> 0:21:11.800 no point just reducing food intake and not changing a 0:21:11.880 --> 0:21:15.560 lifestyle to try and get more exercise, more correct eating. 0:21:15.680 --> 0:21:20.160 So and that's I'm assuming the main push that you're 0:21:20.160 --> 0:21:23.600 putting in there, but actually thinking about drugs because at 0:21:23.600 --> 0:21:26.400 the end of the day, I'm a drug analyst. If 0:21:26.440 --> 0:21:30.320 you think forward and you see these the combination of 0:21:30.400 --> 0:21:33.200 lifestyle and the drugs, do you think it will make 0:21:33.240 --> 0:21:36.720 a big difference to people if they didn't have to 0:21:36.760 --> 0:21:39.960 inject themselves and one day there were some orals available. 0:21:40.000 --> 0:21:43.120 Do you think that's that would be a big plus 0:21:43.200 --> 0:21:46.960 for fitting into the whole regime that you were thinking about. 0:21:48.359 --> 0:21:51.920 I definitely do. And there certainly are drugs in development 0:21:52.080 --> 0:21:56.760 that have oral formulations, and not only will those probably 0:21:56.800 --> 0:22:00.720 be more acceptable to patients, my other hope is that 0:22:00.880 --> 0:22:04.639 they might be less expensive as well, which would allow 0:22:04.800 --> 0:22:08.600 us to improve access to them or broadly. 0:22:10.240 --> 0:22:14.320 Doctor Linda, I mean, I want to ask, because the 0:22:14.440 --> 0:22:16.320 thing about these drugs, I guess the bad side of 0:22:16.320 --> 0:22:19.760 these drugs is that once you're on them, it seems 0:22:19.800 --> 0:22:21.840 like you're on them forever, or else you gain the 0:22:21.880 --> 0:22:26.120 weight back. How do you at noon think about this, 0:22:26.760 --> 0:22:29.480 because you know, if these drugs become a part of 0:22:29.520 --> 0:22:33.280 that treatment option. It feels weird to be on these 0:22:33.359 --> 0:22:37.000 drugs forever, especially when you know the weight loss that 0:22:37.040 --> 0:22:40.680 you're hoping for. Maybe not you know that large. 0:22:42.320 --> 0:22:46.359 It's a great question. New's point of view is that 0:22:47.800 --> 0:22:51.600 we may be able to drive even better health improvements 0:22:52.040 --> 0:22:56.480 than the drugs alone, because we've got significant published, peer 0:22:56.560 --> 0:23:02.040 reviewed studies in over fifty journals that show that our 0:23:02.200 --> 0:23:07.800 principles of psychological change, when applied to our patients and users, 0:23:07.880 --> 0:23:12.000 actually drive better long term outcomes than the standard of care. 0:23:12.680 --> 0:23:16.200 So I think the jury is out on whether every 0:23:16.240 --> 0:23:19.240 single patient will absolutely need these medications. 0:23:19.240 --> 0:23:27.399 Lifelong doctor, you interestingly segued into the idea of outcomes. 0:23:27.480 --> 0:23:35.720 We are awaiting some controlled, sizeable data for cardiovascular risk 0:23:36.320 --> 0:23:41.040 reduction of these drugs potentially. Do you think that's clearly 0:23:41.040 --> 0:23:44.199 if you then add better eating and more exercise to that, 0:23:44.240 --> 0:23:47.160 you're going to amplify that benefit. But do you think 0:23:47.240 --> 0:23:50.840 that's really important that the drugs do show that they're 0:23:50.880 --> 0:23:56.200 reducing cardival vascular risk. Do you think that your patients 0:23:56.359 --> 0:23:57.960 physicians are all looking for that. 0:24:00.040 --> 0:24:04.679 Absolutely? I mean, weight is really just one barometer and 0:24:04.760 --> 0:24:09.200 it's not the greatest barometer of overall health. So if 0:24:09.280 --> 0:24:14.880 there's clear cardiovascular risk reduction, I think hopefully that will 0:24:14.880 --> 0:24:20.080 make the case for coverage by payers stronger, because that's 0:24:20.200 --> 0:24:23.800 one of the things that does steiny us in our 0:24:23.880 --> 0:24:25.879 attempt to treat this disease of obesity. 0:24:27.240 --> 0:24:30.360 So one of the issues with these new drugs has 0:24:30.400 --> 0:24:38.440 been supply shortages because people who don't necessarily qualify as 0:24:39.760 --> 0:24:43.960 obese in a sense have been pushing for these drugs. 0:24:44.040 --> 0:24:46.919 I mean, take Hollywood, or take just people who have 0:24:47.000 --> 0:24:50.760 a couple extra pounds. How do you see this from 0:24:50.880 --> 0:24:56.240 New Med's perspective as being can you deliver this drug 0:24:56.560 --> 0:25:00.480 for people who you know, maybe don't have some of 0:25:00.520 --> 0:25:05.359 these same medical concerns caused by obesity. 0:25:06.040 --> 0:25:12.800 New Med is really committed to strict qualification of any 0:25:12.880 --> 0:25:16.359 of our patients who may be seeking a prescription from us, 0:25:16.880 --> 0:25:19.199 and one of the ways that we do this is 0:25:19.240 --> 0:25:23.320 not just greeting people by BMI, but utilizing video visits, 0:25:23.400 --> 0:25:27.200