WEBVTT - Ukraine, Oil, And The Supply Chain 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.600 at Bloomberg dot com slash podcast. All right, we've got many, 0:00:22.760 --> 0:00:25.960 many bricks in the wall of worry. Now let's add 0:00:26.000 --> 0:00:29.480 another one, geopolitical concerns, another significant headwind for this market 0:00:29.520 --> 0:00:31.760 to digest. Let's see how the pros are doing it. 0:00:32.000 --> 0:00:37.519 Tracy McMillian, Global head of Asset Allocation Strategy at Wells Fargo. So, Tracy, 0:00:37.560 --> 0:00:40.280 you think about this stuff on a global scale. We 0:00:40.440 --> 0:00:44.959 now have a hot war in yourp um. How does 0:00:45.000 --> 0:00:47.279 that factor into your calculus as you talk to your 0:00:47.320 --> 0:00:52.760 clients about where to allocate capple on a global scale. Yes, 0:00:53.120 --> 0:00:57.600 we we certainly have had to make um some adjustments here. 0:00:58.080 --> 0:01:02.080 But what we are killing alliance telling investors is that 0:01:02.720 --> 0:01:07.960 amid this uncertainty that is certainly being compounded by the 0:01:08.000 --> 0:01:11.280 war in Europe, to make sure that they're going back 0:01:11.319 --> 0:01:14.959 to basics thinking about what their risk tolerances, what their 0:01:15.000 --> 0:01:18.600 time horizon is, and making sure that that does align 0:01:18.920 --> 0:01:23.880 with their allocations. A short term horizon means they should 0:01:23.920 --> 0:01:28.199 probably be holding more cash here, probably more short term 0:01:28.240 --> 0:01:34.000 fixed income, and a longer term horizon, a more aggressive 0:01:34.120 --> 0:01:38.360 risk tolerance. Those investors might want to start dollar cost 0:01:38.440 --> 0:01:42.400 averaging in um We are down ten percent or more 0:01:42.640 --> 0:01:45.920 in some equities markets globally, so it might be a 0:01:45.959 --> 0:01:49.880 good time to, uh, you know, break their cash into 0:01:50.200 --> 0:01:54.240 different buckets and start dollar cost averaging into equities, especially 0:01:54.240 --> 0:01:58.440 if they're below their longer term targets. And where would 0:01:58.480 --> 0:02:01.120 you go? I mean, in terms of sectors, what do 0:02:01.160 --> 0:02:03.840 you think is a good place to buy undervalued right now? 0:02:03.960 --> 0:02:05.720 And what do you think has run too far too 0:02:05.720 --> 0:02:09.120 fast and it's still overvalued because there's still a lot 0:02:09.120 --> 0:02:14.200 of big evaluations out there. There are absolutely and you know, 0:02:14.280 --> 0:02:17.000 one of the places that that we're looking right now 0:02:17.440 --> 0:02:22.400 is information technology and communication services, so those growth areas 0:02:22.440 --> 0:02:27.200 where we see very high quality earning. We also still 0:02:27.240 --> 0:02:30.720 like financials because even though rates have come in here 0:02:31.240 --> 0:02:33.640 um as we've seen a flight to quality, we do 0:02:33.800 --> 0:02:36.960 think that the trend is higher in interest rates. So 0:02:37.000 --> 0:02:41.280 we think that financials have uh you know, come down 0:02:41.280 --> 0:02:44.760 in price. The valuations looked there and uh you know, 0:02:44.880 --> 0:02:47.400 through the course of the next six eighteen months, we 0:02:47.480 --> 0:02:50.600 see some value there. Um where we would stay away, 0:02:50.680 --> 0:02:54.120 we'd stay away from things that are more defensive. So 0:02:54.360 --> 0:02:59.720 you know, thinks of utilities um and also um consumers 0:02:59.760 --> 0:03:01.919 stay poles, consumer shape as we think are going to 0:03:02.000 --> 0:03:06.839 be hit very hard by additional commodities inflation. So those 0:03:06.880 --> 0:03:11.679 are two areas speaking of speaking of tracy, commodities inflation. 0:03:11.800 --> 0:03:15.639 Look at your oil shirt right now. Unbelievable. I mean, 0:03:16.080 --> 0:03:18.200 Greg Jarrett was just telling me that the i e. 0:03:18.280 --> 0:03:22.400 A Is going to deploy emergency oil stockpiles. Um, how 0:03:22.520 --> 0:03:25.240 much can they really deploy? Mr market asked and bid 0:03:25.400 --> 0:03:30.000 up eight percent? So now uh w t I is 0:03:30.040 --> 0:03:33.320 trading at a hundred and three dollars and forty cents 0:03:33.360 --> 0:03:38.840 a barrel. Brent is up at one oh five thirty. UM. 0:03:38.880 --> 0:03:43.200 It's just amazing to watch these games in oil. Whatever 0:03:43.200 --> 0:03:45.360 I'm going to enter, Paul, are we energy independent? I 0:03:45.360 --> 0:03:47.600 thought we were. I thought we're all going green? Tracy, 0:03:47.760 --> 0:03:53.280 have I missed the energy trade? Uh? Oil is certainly 0:03:53.600 --> 0:03:57.800 much higher than we originally thought going into this year. 0:03:57.880 --> 0:04:00.920 But things have changed, and the war in Europe is 0:04:01.000 --> 0:04:05.240 making a tight commodities market and tighter UM. So the 0:04:05.320 --> 0:04:09.880 off ramp to lower inflation, we think it could be prolonged. 0:04:10.040 --> 0:04:13.240 And a big part of that UH inflation is going 0:04:13.280 --> 0:04:16.800 to be that commodities markets and that is across the 0:04:16.800 --> 0:04:20.800 commodities complex are going to continue to be pressured higher. 0:04:22.440 --> 0:04:24.680 If we get this kind of inflation continuing, you're gonna 0:04:24.720 --> 0:04:30.920 have to be Tracy mcbillian. But it was unfair. I'm 0:04:30.960 --> 0:04:32.360 sure you hear that all the time. That will be 0:04:32.400 --> 0:04:35.279 here all week. I looked it up and mcmillian's apparently 0:04:35.279 --> 0:04:39.359 an old Scottish name referring to I guess the offspring 0:04:39.400 --> 0:04:42.880 of a bald man, or maybe it's a Gaelic like 0:04:43.000 --> 0:04:47.520 a monastery or community of Gaelic monks. What do you think, Tracy, 0:04:47.560 --> 0:04:51.839 I mean, it's a perfect name for wealth management, isn't it? Yes, 0:04:51.920 --> 0:04:54.279 it is. But I have heard from my clients UM 0:04:54.320 --> 0:04:57.400 that I should be Tracy mcfillian, So I'll have to 0:04:57.440 --> 0:04:59.960 look into that. What's the what are you look for 0:05:00.080 --> 0:05:01.720 from the State of the Union addressed tonight? We think 0:05:01.720 --> 0:05:04.840 the market is going to be paying attention to so 0:05:04.880 --> 0:05:09.200 there's certainly going to be a paying attention to any um, 0:05:09.520 --> 0:05:12.839 you know change and energy policy. I would say, uh, 0:05:12.920 --> 0:05:16.560 you know, do we need to be focusing more on 0:05:16.880 --> 0:05:22.280 energy security? Um over you know any climate objectives at 0:05:22.400 --> 0:05:25.560 this point? Um, so that that's certainly something we'll be 0:05:25.560 --> 0:05:28.200 looking for. We'll be looking for, um you know, what 0:05:28.480 --> 0:05:31.320 the plans are at this point for build back better 0:05:31.880 --> 0:05:34.760 you know, is that still alive or are we moving 0:05:34.760 --> 0:05:40.440 on to other uh initiatives? And you know, I think, um, 0:05:40.480 --> 0:05:43.200 you know, another thing that we're certainly going to be 0:05:43.200 --> 0:05:48.599 watching for is any change to our policy towards um, 0:05:48.680 --> 0:05:52.400 your Russia or Ukraine. So you know, three big things 0:05:52.560 --> 0:05:55.040 there absolutely or I think a lot of folks for 0:05:55.120 --> 0:05:58.200 with tuning in here Tonitracy McMillian, although the do pit 0:05:58.320 --> 0:05:59.839 games on tonight, so I'm gonna have to go back 0:05:59.839 --> 0:06:02.599 and fourth. But devil sale goes Tracy McMillian, head of 0:06:02.600 --> 0:06:10.320 Global Asset Allocation Strategy for Wells Fargo, giving us her thoughts. Boy, 0:06:10.400 --> 0:06:12.880 looking at oil here nine up nine percent here a 0:06:12.920 --> 0:06:15.600 hundred four hours forty cents of barrel. Let's break that down. 0:06:15.680 --> 0:06:17.520 Let's take a little bit of extra time and look 0:06:17.560 --> 0:06:19.839 at oil here. We can do that with Julia Fanzerious 0:06:19.960 --> 0:06:24.040 Bloomberg News. Oil's future reporting pretty grouped to Bloomberg Markets corresponded, Julia, 0:06:24.720 --> 0:06:28.120 what's going on today? Is this technical? What's going on? 0:06:28.160 --> 0:06:31.279 Why is oil up nine? It is not technical. It 0:06:31.400 --> 0:06:34.080 is all on the headlines right now. So starting off 0:06:34.080 --> 0:06:37.520 with the fact that traders are finally deciding that oil 0:06:37.800 --> 0:06:41.279 exports from Russia and energy supplies in general are going 0:06:41.320 --> 0:06:44.120 to be impacted by sanctions, even if it is indirectly, 0:06:44.120 --> 0:06:46.799 and today is the day where they're just realizing, Okay, 0:06:47.279 --> 0:06:49.160 this is the moment that we have to start pricing 0:06:49.160 --> 0:06:51.520 this in more. And then we saw that the i e. 0:06:51.680 --> 0:06:55.600 A decided to go and have a crude tap into 0:06:55.600 --> 0:06:58.640 their crude releases for sixty million barrels, which at first 0:06:58.640 --> 0:07:01.080 you're like, okay, so maybe crew prices should have slowed 0:07:01.080 --> 0:07:05.640 down a bit, but no, but you know, it's supercharged 0:07:05.680 --> 0:07:10.320 the rally, unbelieved supercharge the rally. And the reason is 0:07:10.360 --> 0:07:13.760 because trainers are saying, well, that's not really that much 0:07:13.800 --> 0:07:16.480 compared to Russian experts. I think it's up to six 0:07:16.560 --> 0:07:19.880 days of Russia's more than zero. It's more than zero, 0:07:20.000 --> 0:07:23.320 but it's letty, what in the heck is going on here? 0:07:23.440 --> 0:07:27.360 I mean, yeah, I get that, you realize, oh, that's 0:07:27.360 --> 0:07:29.800 not very much in wait, what we used twenty million 0:07:29.840 --> 0:07:34.080 barrels a day here, a hundred million barrels a day globally. Uh, 0:07:34.120 --> 0:07:36.840 but you knew that before this, right, and it's better 0:07:36.880 --> 0:07:39.640 than zero. Well, folks, you guys should really witness Matt 0:07:39.680 --> 0:07:44.440 Miller's face. Rain is exploding. Not even talking cars yet. 0:07:44.880 --> 0:07:47.440 I know, let's not, let's not, let's not open that door. 0:07:48.240 --> 0:07:50.920 But to Julia's point, what's interesting here is and I 0:07:50.960 --> 0:07:52.760 mean it's everything that Julie said. I asked her this 0:07:52.800 --> 0:07:55.160 before we became on the show. Why is oil supercharged 0:07:55.240 --> 0:07:58.080 right now? Because nothing has really changed? But she makes 0:07:58.080 --> 0:07:59.880 a really good point on the sanctions bit of it, 0:08:00.000 --> 0:08:02.240 because that's the part that I think a lot of 0:08:02.240 --> 0:08:04.480 people are looking at. Remember, the energy payments have been 0:08:04.480 --> 0:08:07.520 taken out of swift for the moment, or any transactions 0:08:07.560 --> 0:08:09.440 or any swift actions that they might do. But I 0:08:09.440 --> 0:08:12.600 think the assumption here is that eventually that's going to change. So, yes, 0:08:13.120 --> 0:08:17.680 you're right, oil was soaring quite a bit before. But 0:08:18.400 --> 0:08:21.559 these headlines sometimes if there you did see immediate drop 0:08:21.560 --> 0:08:24.600 on the headlines, which would be where you're simple extra 0:08:24.640 --> 0:08:28.160 supply drops oil narrative comes from, but then you really 0:08:28.200 --> 0:08:30.640 have traders reconsider and it's kind of supercharged it. And 0:08:30.680 --> 0:08:32.640 that's a pretty normal thing to see for traders, not 0:08:32.679 --> 0:08:34.640 just an oil but you see in stock markets. You 0:08:34.679 --> 0:08:37.280 see it in all assets. Right when when there's a 0:08:37.360 --> 0:08:40.880 sign that an incredibly large institution is all of a 0:08:40.880 --> 0:08:44.520 sudden freaking out, then traders go, WHOA, we're going to 0:08:44.600 --> 0:08:46.880 run out of oil, Let's buy as much as we 0:08:46.960 --> 0:08:49.400 can right now, exactly. And it was that knee jerk 0:08:49.440 --> 0:08:52.319 reaction that from the I A that then have the 0:08:52.360 --> 0:08:55.360 kne jerk reaction in the crewde markets. What's the futures markets? 0:08:55.360 --> 0:08:57.199 What are they telling you as you take a look 0:08:57.240 --> 0:09:00.240 at them now? Is just oil gonna come down? Ice 0:09:00.240 --> 0:09:02.560 going forwardard? What? Oh? No, the futures market is saying 0:09:02.640 --> 0:09:07.840 quite the opposite. We're backward dated. So we are seeing backwardation, backwardation, yeah, 0:09:07.920 --> 0:09:09.559 and that find that for me again because I'm in 0:09:09.640 --> 0:09:12.559 equad worse No. Yeah, So that means that traders are 0:09:12.559 --> 0:09:16.000 paying more money to get their hands on barrels right now, 0:09:16.240 --> 0:09:19.120 and we're not seeing that go away because supply is 0:09:19.160 --> 0:09:21.840 tight and demand is high, so these prices are not 0:09:21.840 --> 0:09:24.840 going to go down anytime soon. OPEC they're meeting tomorrow 0:09:24.880 --> 0:09:26.600 and it looks like they're also going to continue with 0:09:26.600 --> 0:09:28.960 their four hundred thousand barrels a day, and we know 0:09:29.120 --> 0:09:32.160 that they're not actually meeting that output. So still supplies 0:09:32.200 --> 0:09:34.800 are tight and demand is high. Every time oil gets 0:09:34.840 --> 0:09:37.920 to these prices or goes down drastically, I have to 0:09:38.000 --> 0:09:42.599 relearn how to look at the forward curve. CT is 0:09:42.600 --> 0:09:44.600 a great way to do. Do you see t also 0:09:44.800 --> 0:09:48.280 on the Bloomberg terminal. I was using Ohman before and 0:09:48.320 --> 0:09:50.079 trying to figure it out from there, but it's so 0:09:50.160 --> 0:09:54.760 difficult through the options market the contract. So I'm you know, 0:09:54.800 --> 0:09:56.360 I don't think about it the right way, but if 0:09:56.400 --> 0:09:58.200 you use CT you can. Actually it's right there in 0:09:58.200 --> 0:10:01.640 front of you. Paul, on any uh, I'm guessing on 0:10:01.679 --> 0:10:05.000 pretty much any commodities contract, you can just type CT 0:10:05.160 --> 0:10:08.800 go and pretty when are some of these oil companies 0:10:08.840 --> 0:10:10.800 in the shell patch, you can and say I gotta 0:10:10.800 --> 0:10:12.840 I'm gonna start drilling. Yeah, And re told us just 0:10:12.920 --> 0:10:16.840 now that the Biden administration is reminding people there are 0:10:17.000 --> 0:10:21.080 nine thousand leases out there that haven't been used. Greg Jared, 0:10:21.120 --> 0:10:26.120 at some point it is just gonna leave exactly, wildcatting exactly. Well, 0:10:26.120 --> 0:10:28.080 it comes down to the point on backwardation, right because 0:10:28.080 --> 0:10:29.800 if you actually listen to what some of these CEOs 0:10:29.800 --> 0:10:32.360 are saying, they're saying, well, yeah, we're in deep backwardation. Yeah, 0:10:32.360 --> 0:10:35.040 the spot prices are looking really good right now, but 0:10:35.080 --> 0:10:36.959 that's not sustainable. Remember, you have to look at the 0:10:36.960 --> 0:10:39.280 future's curve and if you have all that demand right now, 0:10:39.559 --> 0:10:41.440 what are good people going to buy later? So a 0:10:41.440 --> 0:10:43.960 lot of a lot of these American companies or American 0:10:44.000 --> 0:10:47.040 shale producers are looking for that backwardation to lessen just 0:10:47.160 --> 0:10:50.160 a little bit. So those spot prices aren't all your 0:10:50.280 --> 0:10:53.400 demand essentially isn't targeted in one point in time, and 0:10:53.400 --> 0:10:56.200 it's more of a longer term play and production plan. 0:10:56.640 --> 0:11:00.760 To add some Mike mcgloan Bloomberg Intelligence, Commodity strategist, he's 0:11:00.760 --> 0:11:02.560 saying we're gonna see fifty dollar oil and then not 0:11:02.600 --> 0:11:05.400 to distant future. He thinks it's gonna come back big time. 0:11:05.800 --> 0:11:08.040 Uh So that whole supply demand thing. But we appreciate 0:11:08.080 --> 0:11:11.559 getting some color here. Juliette Fanzaris, Bloomberg News. Oil's future 0:11:11.559 --> 0:11:15.200 reporter and Cretu Gupta Bloomberg Markets correspondent, just helping us 0:11:15.240 --> 0:11:16.920 break down a little bit this big move up what 0:11:16.920 --> 0:11:19.880 we've seen in energy across the energy complex. But we're 0:11:19.920 --> 0:11:22.120 we focus here on w t I crude oil, Brent 0:11:22.200 --> 0:11:24.800 crude oil brants up on seven point four percent on 0:11:25.320 --> 0:11:30.040 five dollars per barrel, so definitely some supply issues. We 0:11:30.080 --> 0:11:33.439 know the demand is there as this global economy continues 0:11:33.480 --> 0:11:36.839 to reopen, the question really is supply So interesting to 0:11:36.880 --> 0:11:42.920 see what we hear out of OPEC tomorrow. Another difficult 0:11:42.960 --> 0:11:45.360 day in the markets here as in vestors trying to 0:11:45.400 --> 0:11:49.120 digest what we're seeing on the geopolitical front, particularly out 0:11:49.120 --> 0:11:52.160 of Ukraine. Let's get the latest with Megan Hornuman, director 0:11:52.200 --> 0:11:58.880 of Portfolio Strategist Strategy Advertence, Chief Investment Strategists Adverten's Capital Advisors. Megan, 0:11:58.880 --> 0:12:01.600 thanks so much for joining us here. How do you 0:12:01.720 --> 0:12:06.880 think about your portfolio your discussions with your portfolio managers 0:12:07.160 --> 0:12:10.760 as you have to add geopolitical risk to the potential 0:12:11.120 --> 0:12:15.880 wall of worry. Ye. Absolutely. The one thing that's the 0:12:15.880 --> 0:12:18.440 most important is knowing what you own, So not just 0:12:18.520 --> 0:12:22.960 from the broad asset allocation perspective, making sure you're well diversified. 0:12:23.400 --> 0:12:26.079 Even though coming into this crisis no one wanted to 0:12:26.080 --> 0:12:29.520 touch bonds at all, we continue to advise our clients 0:12:29.520 --> 0:12:32.000 at least have some portion of the portfolio in some 0:12:32.160 --> 0:12:37.960 defensive bond positioning because they will consistently be used as 0:12:37.960 --> 0:12:41.440 a portfolio diversification tool. So in that event, you have 0:12:41.480 --> 0:12:43.840 to know what you want from the asset class perspective. 0:12:44.240 --> 0:12:47.840 Then when you delve into your whether it's regions or sectors, 0:12:47.880 --> 0:12:51.319 what is your exposure to Russia itself? Um? Investing in 0:12:51.320 --> 0:12:55.400 international equities, specifically on the developed side has been something 0:12:55.400 --> 0:12:58.439 that we haven't shied away from. So we're consistently having 0:12:58.440 --> 0:13:02.520 conversations with our manager looking at what is the company's 0:13:03.080 --> 0:13:05.880 balance sheet look like, what can they withstand from an 0:13:06.040 --> 0:13:09.840 energy or commodity increased perspective, seeing what kind of impact 0:13:09.880 --> 0:13:12.439 that may have on future earnings. So are you're going 0:13:12.520 --> 0:13:20.480 into portfolios and selling uh Russian assets and anything related 0:13:20.679 --> 0:13:24.040 to Russia? And I wonder, I mean, I can understand 0:13:24.080 --> 0:13:27.640 making that move, um obviously, but it must be difficult 0:13:27.640 --> 0:13:31.280 at a time when there probably are few buyers. Am 0:13:31.320 --> 0:13:36.679 I seeing that correctly? Yeah? Unfortunately, we have very little 0:13:36.679 --> 0:13:38.720 of any exposure to Russia. When we look at our 0:13:38.760 --> 0:13:43.080 overall asset allocation, our managers that we utilize have done 0:13:43.080 --> 0:13:46.400 that job for us before the crisis and then throughout 0:13:46.400 --> 0:13:50.080 the crisis. So I'm not necessarily concerned about the exposure 0:13:50.120 --> 0:13:52.520 to Russia itself. You have to look beyond that now, 0:13:52.920 --> 0:13:55.880 um you know, is their bigger concern and some of 0:13:55.880 --> 0:13:58.120 the other exposure that we have. The one thing that 0:13:58.240 --> 0:14:01.360 history tells us is you had mentioned selling into this. 0:14:01.720 --> 0:14:05.800 It's very dangerous to sell into geopolitical events when you 0:14:05.920 --> 0:14:08.280 don't know what kind of change, if any of this 0:14:08.480 --> 0:14:11.400 is going to have to the fundamental perspective. It's also 0:14:11.520 --> 0:14:14.800 dangerous if you don't know, um, how far the leader 0:14:14.840 --> 0:14:16.920 is going to take this, which we do not know 0:14:16.960 --> 0:14:18.800 how long, how far Putent is going to take this. 0:14:19.280 --> 0:14:21.320 The most important thing is just to make sure that 0:14:21.400 --> 0:14:25.400 you're well diversified, that your portfolio over time can withstand 0:14:25.840 --> 0:14:29.440 short term periods of volatility. We ultimately do believe that 0:14:29.480 --> 0:14:32.200 this will end up being short lived. We don't know 0:14:32.240 --> 0:14:35.280 how much pain that will occur. In the meantime, it's 0:14:35.440 --> 0:14:39.840 very difficult to watch, not just from the humanity humanitarian perspective, 0:14:39.840 --> 0:14:42.760 but also watching these daily moves in the market. So 0:14:42.800 --> 0:14:47.400 we're telling our clients consistently, so let emotions override your 0:14:47.440 --> 0:14:50.960 long term risk, your long term objective. Be very careful 0:14:51.280 --> 0:14:54.520 to be selling, because once you sell, your locking in losses, 0:14:54.600 --> 0:14:56.600 and that can be dangerous for the long run. It's 0:14:56.640 --> 0:14:59.800 proven to be dangerous for the long run. Stay invested. 0:15:00.080 --> 0:15:02.600 Have dry powder, which we do and we have had 0:15:02.680 --> 0:15:06.000 coming into this year, some dry powder to look for opportunities. 0:15:06.320 --> 0:15:09.480 Just consistently be monitoring what you own. We do believe 0:15:09.520 --> 0:15:12.000 the managers have made the right decisions within our asset 0:15:12.040 --> 0:15:15.360 allocation to mitigate some of the exposure that they may 0:15:15.360 --> 0:15:18.320 have to this crisis. And Megan, we also have a 0:15:18.400 --> 0:15:20.600 State of the Union address this evening the first by 0:15:20.640 --> 0:15:23.520 President Biden. What will you be looking for? What will 0:15:23.560 --> 0:15:28.320 your fund managers be looking for? Here? Right now? I 0:15:28.360 --> 0:15:30.920 think the one thing that that's working as unity. We've 0:15:30.960 --> 0:15:35.840 seen that just from these sanctioned perspective is the Western 0:15:35.840 --> 0:15:39.120 world forming together and putting these sanctions from the Russian 0:15:39.120 --> 0:15:41.920 government one by one um and it is the very 0:15:42.040 --> 0:15:46.560 unified approach that right now, especially with the just the 0:15:46.600 --> 0:15:49.920 tragic situations that everybody is looking at on television all 0:15:50.000 --> 0:15:53.920 day long. We need some unity and confidence. But as 0:15:53.960 --> 0:15:56.320 far as I think what people will be looking for 0:15:56.720 --> 0:15:59.320 tonight is is that, you know, bringing the conference back 0:15:59.320 --> 0:16:02.080 in the United States, because people are already speculating about 0:16:02.080 --> 0:16:04.360 what may or may not happen as a results of 0:16:04.400 --> 0:16:07.640 this with other countries, and I think that's dangerous, and 0:16:07.760 --> 0:16:10.840 so we really have to create a sense of confidence 0:16:10.920 --> 0:16:14.440 that we are unified with our other counterparts and we 0:16:15.160 --> 0:16:17.360 against what Russia is doing. I think that that will 0:16:17.400 --> 0:16:19.480 help to some degree. But people will be looking from 0:16:19.520 --> 0:16:23.720 the energy perspective, and it's difficult at this point for 0:16:23.760 --> 0:16:26.560 the administration to kind of do a three sixty on 0:16:26.600 --> 0:16:29.200 some of the green energy initiatives. But I think people 0:16:29.240 --> 0:16:31.400 will be looking on some of the things that the 0:16:31.440 --> 0:16:34.000 administration can do for the short term that can help 0:16:34.040 --> 0:16:36.880 alleviate some of the pain at the pump for for Americans. 0:16:37.080 --> 0:16:39.760 By the way, just got about thirty seconds left. But 0:16:40.160 --> 0:16:45.040 when you're looking to diversify, do you look into commodities 0:16:45.120 --> 0:16:48.000 as well? I mean typically people and retail investors think 0:16:48.040 --> 0:16:50.960 of just stocks and bonds, But do you look at gold, 0:16:51.000 --> 0:16:52.600 do you look at oil? Do you look at aggs? 0:16:52.600 --> 0:16:57.000 Like how far do you go, so we will always 0:16:57.040 --> 0:16:59.400 look at them because they're considered. We kind of lumped 0:16:59.480 --> 0:17:03.720 the commodity these into what is our alternative exposure, but 0:17:03.880 --> 0:17:08.159 instead of focusing on some of the different commodities with 0:17:08.240 --> 0:17:10.840 its crude oil goal because they're highly volatile and our 0:17:10.880 --> 0:17:13.880 clients really have more of an eighteen to twenty four 0:17:13.920 --> 0:17:16.600 month time frame. So what we would focus on is 0:17:16.640 --> 0:17:19.600 other real assets that that can give the same types 0:17:19.640 --> 0:17:23.960 of characteristics in the given our expectation for economic growth. 0:17:24.280 --> 0:17:27.080 So thinking about things like real estate or infrastructure. These 0:17:27.080 --> 0:17:29.120 are summarias the market that we would focus on. Now. 0:17:29.600 --> 0:17:32.960 I think it's it is a very risky game to 0:17:32.960 --> 0:17:37.480 be entering into oil now, specifically because people will be 0:17:37.480 --> 0:17:39.679 doing it on a speculation trade on what's going on 0:17:39.720 --> 0:17:42.080 over these all right, Megan, thank you so much for 0:17:42.200 --> 0:17:44.280 joining us giving a couple of minutes of your time. 0:17:44.280 --> 0:17:47.720 We appreciate it. Megan Hordeman, she is a chief investment 0:17:47.760 --> 0:17:53.760 strategist Adverten's Capital Advisors. This is the big take, the 0:17:53.880 --> 0:17:58.000 best of Bloomberg's in depth original reporting from around the globe. 0:17:58.080 --> 0:18:01.160 We're running on a financial system that's on old technologies. 0:18:01.280 --> 0:18:05.159 We're seeing prices reach fresh record ties what unfolds in 0:18:05.240 --> 0:18:07.679 mid terms, we will no doubt see again in the 0:18:07.720 --> 0:18:12.919 next presidential election. The Big Take on Bloomberg Radio. All right, 0:18:13.400 --> 0:18:17.520 another really cool and impressive Big Take story today out 0:18:17.600 --> 0:18:21.000 on the Terminal and on Bloomberg dot Com Slash Big 0:18:21.040 --> 0:18:23.760 Take this one. This time Bloomberg Opinion measure at President 0:18:23.760 --> 0:18:27.720 Biden's presidency across fourteen metrics. And we have the reporter 0:18:27.800 --> 0:18:29.679 here that focused on the supply chain because that's one 0:18:29.720 --> 0:18:32.760 of our favorite topics here on Bloomberg Markets, Brooks Sutherland. 0:18:32.880 --> 0:18:36.439 She's a calumnist for Bloomberg Opinion. She joins us here live, 0:18:37.080 --> 0:18:39.879 I say, live in our Bloomberg Interactor broker studio. So 0:18:40.119 --> 0:18:42.040 after a couple of years of call ins, we got 0:18:42.200 --> 0:18:45.760 broke back in the studio, Brooke. You gotta fix the 0:18:45.800 --> 0:18:49.200 supply chain for us. It's killing us. Where are we 0:18:49.359 --> 0:18:52.320 right now when you step back and we take a 0:18:52.359 --> 0:18:55.440 look at the global supply chain? Are we any closer 0:18:55.480 --> 0:18:58.160 to fixing it? We are? But I will say that 0:18:58.280 --> 0:19:01.959 nothing is moving is quickly as anybody would like, at 0:19:02.000 --> 0:19:04.280 least of all c e O s, but certainly also 0:19:05.600 --> 0:19:07.960 yes or President Biden. Um So we I mean, I 0:19:07.960 --> 0:19:12.159 will say there's been incremental positive commentary coming out of 0:19:12.240 --> 0:19:15.120 industrial CEOs where they are seeing some improvements on things, 0:19:15.119 --> 0:19:17.800 whether it be resins, uh you know, GM is saying 0:19:17.800 --> 0:19:21.000 they'll have enough semiconductors to significantly ramp up auto production 0:19:21.080 --> 0:19:24.360 this year. Rockwell Automation is also seeing some improvements and semiconductors. 0:19:24.640 --> 0:19:27.840 So there is progress, but it's taking a long time. 0:19:27.920 --> 0:19:29.800 And I think what the result is is then you 0:19:29.800 --> 0:19:32.399 have a lot of these industrial companies banking on a 0:19:32.440 --> 0:19:34.920 significantly better environment in the back half of the year. 0:19:35.280 --> 0:19:37.920 That tends to make investors very nervous. These back end 0:19:37.920 --> 0:19:40.680 waited forecasts have a way of not always playing out 0:19:40.720 --> 0:19:43.439 like we all hoped they might um and so, you know, 0:19:43.480 --> 0:19:47.160 I think it's just it's slow people. I should point 0:19:47.160 --> 0:19:49.080 out the people that you're you know, in your day, 0:19:49.359 --> 0:19:51.880 what you do every day is for Bloomer Opinion, it's 0:19:51.880 --> 0:19:55.040 cover the industrial sector of America, the heartland of America, 0:19:55.080 --> 0:19:57.119 the really cool companies. That's why we're talking about some 0:19:57.160 --> 0:19:59.600 of these companies. But the auto companies, they were the 0:19:59.640 --> 0:20:02.320 kind of the first place where consumers saw, boy, we've 0:20:02.320 --> 0:20:04.240 got a problem out there. And I think that's where 0:20:04.240 --> 0:20:06.919 consumers are really looking to see when auto production does 0:20:06.960 --> 0:20:09.280 in fact ramp up right, And you know, the hope 0:20:09.560 --> 0:20:11.720 is this year that we're going to see some big 0:20:11.760 --> 0:20:14.160 improvements in volumes. But again, I mean, I think it's 0:20:14.200 --> 0:20:17.960 anybody's guests how that actually plays out. And you know, 0:20:18.000 --> 0:20:21.359 the answer to the semiconductor problem particularly is very intractable. 0:20:21.359 --> 0:20:23.960 The way you solve it is by adding significant amounts 0:20:23.960 --> 0:20:27.000 of new supply. You cannot do that overnight. So there's 0:20:27.080 --> 0:20:29.680 a huge wave of investment underway just in the US 0:20:29.720 --> 0:20:33.159 alone to build new semiconductor plants. But this takes years, 0:20:33.240 --> 0:20:35.840 It takes along TI. I just called yesterday the GMC, 0:20:36.400 --> 0:20:41.680 my dealer up in Westchester, Empire UMU MC, and she said, 0:20:42.200 --> 0:20:45.520 I haven't seen a Yukon in months here, and if 0:20:45.600 --> 0:20:49.200 we do get one, it's not gonna have uh might 0:20:49.240 --> 0:20:52.479 not have blind spot um detection, it might not have 0:20:52.560 --> 0:20:56.000 adaptive cruise control, it might not have heated and ventilated 0:20:56.040 --> 0:20:58.920 seats because the chips just aren't there for those things. 0:20:59.160 --> 0:21:04.159 I'm also hearing about delivery issues. Verry rid Holtz just 0:21:04.240 --> 0:21:07.959 had a Toyota FJ forty shipped up from Columbia and 0:21:08.000 --> 0:21:11.800 it sat in customs for five weeks. This is the 0:21:11.840 --> 0:21:14.439 kind of thing that the president can actually impact. Is 0:21:14.480 --> 0:21:17.320 he doing stuff like that at the borders? Is he 0:21:17.600 --> 0:21:21.119 encouraging people to onshore UM production? You know, what is 0:21:21.119 --> 0:21:25.960 the administration doing in terms of actions now to try 0:21:26.000 --> 0:21:27.879 and get it going again? Sure? I mean on the 0:21:27.880 --> 0:21:30.520 semi conductor front, just one point. So the manufacturers are 0:21:30.520 --> 0:21:33.480 also redesigning their products to get around UM some of 0:21:33.520 --> 0:21:35.840 these issues where you know, you have shortages of one 0:21:35.840 --> 0:21:37.520 ship but more of a supply of others, and so 0:21:37.560 --> 0:21:39.800 they're retrofitting up. So it's not just cars. But to 0:21:39.880 --> 0:21:42.639 your point, I mean, it is actually very hard for 0:21:42.680 --> 0:21:45.399 the Biden administration to make a huge different in the 0:21:45.440 --> 0:21:47.640 supply jam because so much of this is controlled by 0:21:47.800 --> 0:21:50.600 private entities, and not just you know a handful of 0:21:50.680 --> 0:21:53.879 private entities, but an entire system that historically has not 0:21:53.880 --> 0:21:56.120 always had the best track record of talking to each other. 0:21:56.160 --> 0:22:00.080 So whether that's manufacturers, whether that's railroads, trucking company, the 0:22:00.119 --> 0:22:04.720 sport operators, the actual workers on the docks, warehouses. So 0:22:04.760 --> 0:22:07.119 what the Biden administration is said is they are trying 0:22:07.160 --> 0:22:09.400 to be a deal broker. They want to bring these 0:22:09.400 --> 0:22:11.800 different parties to the table. They want to make sure 0:22:11.800 --> 0:22:14.320 that those lines of communication are open. Now, we are 0:22:14.359 --> 0:22:17.480