1 00:00:02,920 --> 00:00:10,840 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,840 --> 00:00:15,000 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:15,040 --> 00:00:17,520 Speaker 1: Eastern on Apple car Playing and Broid Auto with the 4 00:00:17,520 --> 00:00:21,400 Speaker 1: Bloomberg Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,640 --> 00:00:24,480 Speaker 1: or watch us live on YouTube. 6 00:00:25,120 --> 00:00:25,439 Speaker 2: Hold on. 7 00:00:25,520 --> 00:00:28,880 Speaker 3: We got a Supreme Court ruling. The Supreme Court allows 8 00:00:29,000 --> 00:00:33,320 Speaker 3: emergency abortions in Idaho for now. And this was the 9 00:00:33,320 --> 00:00:37,239 Speaker 3: case that if the woman's life was not in danger 10 00:00:37,920 --> 00:00:42,320 Speaker 3: but was compromised, would it be legal for a doctor 11 00:00:42,960 --> 00:00:45,600 Speaker 3: to wind up performing that abortion. It looks like the 12 00:00:45,680 --> 00:00:50,000 Speaker 3: Supreme Court allows emergency abortions in Idaho for now. June 13 00:00:50,000 --> 00:00:52,040 Speaker 3: Grasso is still sitting with us in the studio, June, 14 00:00:52,320 --> 00:00:52,960 Speaker 3: give me your take. 15 00:00:53,320 --> 00:00:56,040 Speaker 4: So this is a sort of kick the can down 16 00:00:56,120 --> 00:00:59,760 Speaker 4: the road decision, because what they're saying is that the 17 00:00:59,800 --> 00:01:04,600 Speaker 4: case was improvidently granted. So it's dismissed because improvnently granted, 18 00:01:04,640 --> 00:01:06,960 Speaker 4: we call it a dig, and that means that we 19 00:01:06,959 --> 00:01:09,320 Speaker 4: shouldn't have taken the case in the first place. And 20 00:01:09,360 --> 00:01:13,360 Speaker 4: the justices were split three three three, So the three 21 00:01:13,440 --> 00:01:19,120 Speaker 4: liberals thought that the federal law supersedes the Idaho state law. 22 00:01:19,520 --> 00:01:22,680 Speaker 4: The three concurrences, which were the justices in the middle. 23 00:01:22,760 --> 00:01:24,640 Speaker 4: This really shows you the setup of the court. The 24 00:01:24,800 --> 00:01:29,640 Speaker 4: justice in the middle, the Chief Justice, Barrett and Kavanaugh 25 00:01:30,160 --> 00:01:32,559 Speaker 4: said we you know, we shouldn't go forward with this case. 26 00:01:32,560 --> 00:01:34,720 Speaker 4: We should send it back. But they didn't. They didn't 27 00:01:34,800 --> 00:01:38,120 Speaker 4: endorse any particular theory. They said, this case has changed 28 00:01:38,120 --> 00:01:41,960 Speaker 4: since we got it, and the three in dissent Alito 29 00:01:42,080 --> 00:01:46,320 Speaker 4: Thomas van Gorsich said, no, the state should have the 30 00:01:46,440 --> 00:01:50,200 Speaker 4: right to say that you can't have abortions unless it's 31 00:01:50,360 --> 00:01:51,640 Speaker 4: the mother's life is in danger. 32 00:01:51,800 --> 00:01:53,240 Speaker 2: So the setup was really weird. 33 00:01:53,480 --> 00:01:57,080 Speaker 4: Now it goes back to the Ninth Circuit and there's 34 00:01:57,120 --> 00:01:59,920 Speaker 4: more litigation. This could come up again, and the issue 35 00:02:00,360 --> 00:02:04,440 Speaker 4: will come up again, probably because Texas has a similar law, 36 00:02:04,480 --> 00:02:08,560 Speaker 4: and the Fifth Circuit, which is so conservative, has not allowed, 37 00:02:09,000 --> 00:02:12,279 Speaker 4: you know, has not allowed the federal law to supersede 38 00:02:12,280 --> 00:02:16,079 Speaker 4: the state law. So Justice Skatanji Brown Jackson wrote, really, 39 00:02:16,120 --> 00:02:21,360 Speaker 4: I thought compelling concurrence saying that you know, we're not 40 00:02:21,560 --> 00:02:26,280 Speaker 4: making decisions here, we're just kicking. She actually said, we're punting, yeah, punting. 41 00:02:26,600 --> 00:02:29,880 Speaker 4: And meanwhile, the people like doctors and women don't know 42 00:02:29,919 --> 00:02:31,880 Speaker 4: what the rules are because we're not making okay. 43 00:02:31,919 --> 00:02:32,480 Speaker 2: So that was my question. 44 00:02:32,560 --> 00:02:34,240 Speaker 3: So if I'm a doctor in Idaho and I have 45 00:02:34,280 --> 00:02:35,919 Speaker 3: a woman that comes to me in the emergency room 46 00:02:35,960 --> 00:02:39,160 Speaker 3: who is ill that I can help with an abortion, 47 00:02:39,240 --> 00:02:41,480 Speaker 3: but she's not dying, can I do it or not? 48 00:02:41,560 --> 00:02:43,960 Speaker 4: Now you can do it. You couldn't do it yesterday, 49 00:02:43,960 --> 00:02:44,720 Speaker 4: and you can do it today. 50 00:02:44,760 --> 00:02:46,760 Speaker 2: Now you can do it today and maybe not in 51 00:02:46,800 --> 00:02:47,200 Speaker 2: a month. 52 00:02:47,280 --> 00:02:49,640 Speaker 4: And that was one of the things that the Justice 53 00:02:49,720 --> 00:02:53,160 Speaker 4: Kagan wrote about that there has been so much, so 54 00:02:53,200 --> 00:02:55,680 Speaker 4: many problems on the ground. Women have had to be 55 00:02:55,880 --> 00:02:59,640 Speaker 4: flown out because doctors this is criminal penalties for doctors 56 00:03:00,040 --> 00:03:03,400 Speaker 4: five years. So doctors were afraid to make the decision 57 00:03:03,840 --> 00:03:05,520 Speaker 4: is this woman, you know, is there life in. 58 00:03:06,520 --> 00:03:07,280 Speaker 2: Jeopardy or not? 59 00:03:07,600 --> 00:03:09,079 Speaker 3: Or women had to wait until they went into like 60 00:03:09,120 --> 00:03:11,000 Speaker 3: septic shike in order to get the trade. 61 00:03:11,080 --> 00:03:14,960 Speaker 4: Even Justice Barrett, who you know is uh is very 62 00:03:15,080 --> 00:03:19,800 Speaker 4: you know, very conservative on the issue of abortion, talked 63 00:03:19,800 --> 00:03:22,840 Speaker 4: about that what about sepsis and things so and what 64 00:03:22,960 --> 00:03:25,000 Speaker 4: was funny in the in the in the arguments where 65 00:03:25,040 --> 00:03:27,400 Speaker 4: the women on the court were so much in tune, 66 00:03:27,400 --> 00:03:30,600 Speaker 4: which was with what was happening on the ground, And 67 00:03:30,760 --> 00:03:34,040 Speaker 4: you know, here where you have Alito, Well, he's talking 68 00:03:34,040 --> 00:03:37,320 Speaker 4: about the there's a there's two words in the statute 69 00:03:37,400 --> 00:03:39,600 Speaker 4: unborn child, and if you put it in context, it 70 00:03:39,640 --> 00:03:43,200 Speaker 4: doesn't mean the feetus should But he his dissent is 71 00:03:43,280 --> 00:03:47,640 Speaker 4: all about you know, it says unborn child. So it's 72 00:03:47,680 --> 00:03:49,720 Speaker 4: it's more along the lines of what he wrote in 73 00:03:49,760 --> 00:03:50,560 Speaker 4: the Dobbs decision. 74 00:03:51,000 --> 00:03:51,720 Speaker 2: That's all I'll say. 75 00:03:51,840 --> 00:03:55,760 Speaker 5: What's what's the next next thing from the courts on 76 00:03:56,040 --> 00:03:59,280 Speaker 5: this abortion issue is? I mean, there are other cases 77 00:03:59,320 --> 00:04:01,760 Speaker 5: because I mean this one as it kicked the can 78 00:04:01,800 --> 00:04:04,520 Speaker 5: down the road. It's a punting type scenario. So it 79 00:04:04,640 --> 00:04:06,640 Speaker 5: just it feels like we're just gonna be bouncing back 80 00:04:06,680 --> 00:04:09,760 Speaker 5: and forth between the states and the federal And. 81 00:04:09,680 --> 00:04:12,520 Speaker 2: That's why anyone who thought that, you know, what. 82 00:04:12,640 --> 00:04:16,320 Speaker 4: Justice Kavanaugh wrote in the Dobbs decision was, Okay, we're 83 00:04:16,360 --> 00:04:18,599 Speaker 4: done with this now. Abortion the issue is for the 84 00:04:18,680 --> 00:04:24,039 Speaker 4: states and there are that's just too simple and it 85 00:04:24,080 --> 00:04:26,280 Speaker 4: doesn't it doesn't work in real life. So here two 86 00:04:26,360 --> 00:04:29,040 Speaker 4: years after that, we have you know, two cases having 87 00:04:29,080 --> 00:04:31,800 Speaker 4: to dealing with this, and both of them, if you 88 00:04:31,839 --> 00:04:33,920 Speaker 4: think about it, both of them kicked the can down 89 00:04:33,960 --> 00:04:36,440 Speaker 4: the road. Because the myth of pristone case. They went 90 00:04:36,480 --> 00:04:39,440 Speaker 4: off on the procedural issue of standing. So that's coming back. 91 00:04:39,240 --> 00:04:41,800 Speaker 3: To oh yeah, all right, Jude, we really appreciate it. 92 00:04:41,880 --> 00:04:43,960 Speaker 3: Thank you so much. Jene Grasso, no doubt we'll be 93 00:04:43,960 --> 00:04:46,040 Speaker 3: sitting here with me. Will pause at the beach. She'll 94 00:04:46,080 --> 00:04:48,719 Speaker 3: be here with me tomorrow at ten am. I was 95 00:04:48,760 --> 00:04:51,200 Speaker 3: just introducing Nathan Dean as we got this ruling. He's 96 00:04:51,200 --> 00:04:53,600 Speaker 3: senior policy analyst over at Bloomberg Intelligence, and I was 97 00:04:53,640 --> 00:04:57,479 Speaker 3: asking Nathan about the presidential debate tonight. Who sits in 98 00:04:57,480 --> 00:04:59,400 Speaker 3: the White House and who is in the Senate is 99 00:04:59,440 --> 00:05:02,880 Speaker 3: critical for who is on the Supreme Court, for example, 100 00:05:02,960 --> 00:05:04,520 Speaker 3: and these kind of decisions make it all the more 101 00:05:04,520 --> 00:05:06,799 Speaker 3: important on who's going to be sitting in the White House. 102 00:05:07,120 --> 00:05:10,520 Speaker 3: The expectation game is key. How have President Trump and 103 00:05:10,640 --> 00:05:15,440 Speaker 3: President Biden set the expectations going into tonight at nine pm? 104 00:05:16,160 --> 00:05:19,320 Speaker 6: So I think every candidate it goes into a presidential debate, 105 00:05:19,360 --> 00:05:21,240 Speaker 6: going back to the last fifteen years, always tries to 106 00:05:21,360 --> 00:05:24,880 Speaker 6: underperform or at least announce in advance that they're going to, 107 00:05:25,040 --> 00:05:28,360 Speaker 6: you know, keep expectations low, because then if they perform well, 108 00:05:28,400 --> 00:05:30,920 Speaker 6: then it just seems that much greater. But there's really 109 00:05:30,920 --> 00:05:33,560 Speaker 6: two things that we are telling our investors or clients 110 00:05:33,600 --> 00:05:36,080 Speaker 6: to look at to is. The first is just the 111 00:05:36,080 --> 00:05:38,880 Speaker 6: fear of the headline risk. You know, assuming that there 112 00:05:38,880 --> 00:05:42,280 Speaker 6: are policy debates tonight. At the debate, you know, if 113 00:05:42,320 --> 00:05:44,359 Speaker 6: you see something like President Trump double down on his 114 00:05:44,440 --> 00:05:47,039 Speaker 6: statement of a sixty percent tariff on all goods coming 115 00:05:47,040 --> 00:05:49,559 Speaker 6: from China, well that's already been baked into the market, 116 00:05:49,560 --> 00:05:52,960 Speaker 6: But anticipate a headline risk tomorrow. The other thing is 117 00:05:52,960 --> 00:05:55,520 Speaker 6: is that any statement from either President by nor President 118 00:05:55,560 --> 00:05:57,880 Speaker 6: Trump is saying I'm going to do this or I'm 119 00:05:57,880 --> 00:06:00,440 Speaker 6: going to do that, always just remember to put how 120 00:06:00,520 --> 00:06:02,080 Speaker 6: is this going to get through Washington? 121 00:06:02,160 --> 00:06:02,520 Speaker 1: Had on? 122 00:06:02,839 --> 00:06:06,039 Speaker 6: Is it going to be executive order, regulation, legislation? And 123 00:06:06,120 --> 00:06:09,279 Speaker 6: a lot of times that statement just doesn't actually equate 124 00:06:09,360 --> 00:06:12,000 Speaker 6: to the reality of the situation where they can say 125 00:06:12,040 --> 00:06:14,839 Speaker 6: lots of things, but depending on how the Congress plays 126 00:06:14,880 --> 00:06:17,760 Speaker 6: out and how the regulators play out, ultimately the impact 127 00:06:17,800 --> 00:06:18,679 Speaker 6: could be much less. 128 00:06:19,640 --> 00:06:22,719 Speaker 5: What do you think investors should focus on the most 129 00:06:22,839 --> 00:06:25,320 Speaker 5: in this debate here? Policy wise? 130 00:06:26,120 --> 00:06:28,760 Speaker 6: So there's two things. The first is the geopolitical aspect, 131 00:06:28,880 --> 00:06:31,440 Speaker 6: because the power of the presidency is a lot more 132 00:06:31,520 --> 00:06:35,320 Speaker 6: powerful when it comes to geopolitical, national security, and trade. 133 00:06:35,480 --> 00:06:39,279 Speaker 6: So any statement from President Trump or President Biden on Ukraine, Taiwan, 134 00:06:39,600 --> 00:06:42,040 Speaker 6: tariffs and so forth like that certainly should be paid 135 00:06:42,040 --> 00:06:43,840 Speaker 6: attention to and then put in the back of your 136 00:06:43,839 --> 00:06:46,120 Speaker 6: brain as we get closer to the election, because more 137 00:06:46,160 --> 00:06:49,480 Speaker 6: statements will come. The other is tax related because the 138 00:06:50,000 --> 00:06:53,159 Speaker 6: Trump era at tax cuts from twenty seventeen expire for 139 00:06:53,240 --> 00:06:56,000 Speaker 6: individuals at the end of twenty twenty five. So no 140 00:06:56,040 --> 00:06:58,720 Speaker 6: matter who wins as president, the House in Waste Means 141 00:06:58,720 --> 00:07:00,960 Speaker 6: Committee and the presidency is going to be focused on 142 00:07:01,080 --> 00:07:03,359 Speaker 6: tax next year. Now it's going to be individual and 143 00:07:03,400 --> 00:07:05,840 Speaker 6: I think for most individuals their tax rate is not 144 00:07:05,880 --> 00:07:08,760 Speaker 6: going to go up. But if you are exposed to evs, 145 00:07:08,920 --> 00:07:11,480 Speaker 6: like if you have investments in Rivian or Tesla for example, 146 00:07:11,680 --> 00:07:14,000 Speaker 6: that could come up under a Trump presidency. High net 147 00:07:14,000 --> 00:07:16,840 Speaker 6: worth individuals could see higher taxes under a Biden presidency. 148 00:07:17,000 --> 00:07:18,800 Speaker 6: So next year is definitely going to be about tax 149 00:07:18,840 --> 00:07:20,280 Speaker 6: and somebody to pay attention to tonight. 150 00:07:20,640 --> 00:07:23,880 Speaker 3: Which is so interesting because a lot of the argument 151 00:07:23,960 --> 00:07:25,560 Speaker 3: is like, oh, well, what they say on that campaign 152 00:07:25,640 --> 00:07:27,920 Speaker 3: trail is not going to actually materialize, or it'll be 153 00:07:27,960 --> 00:07:31,000 Speaker 3: sort of you know, muted or won't actually wind up happening, 154 00:07:31,040 --> 00:07:34,120 Speaker 3: which makes it so hard for investors to understand how 155 00:07:34,160 --> 00:07:38,040 Speaker 3: to price any of this. What's your best recommendation here? 156 00:07:38,920 --> 00:07:41,400 Speaker 6: So I view it as just an incremental step. So 157 00:07:41,480 --> 00:07:43,600 Speaker 6: if you think of like the you know, if you 158 00:07:43,640 --> 00:07:45,920 Speaker 6: think that President Trump or President Biden comes out at 159 00:07:45,920 --> 00:07:48,160 Speaker 6: a high level and says like I want to do this, 160 00:07:48,480 --> 00:07:51,560 Speaker 6: but over time, expectations lower, and so forth, you'll get 161 00:07:51,560 --> 00:07:54,320 Speaker 6: additional information as they go through the campaign trail. Look, 162 00:07:54,520 --> 00:07:57,280 Speaker 6: tonight's that Maate is not going to set the stone 163 00:07:57,280 --> 00:08:00,640 Speaker 6: in anything in terms of policy. But statement tonight, plus 164 00:08:00,680 --> 00:08:02,920 Speaker 6: a statement tomorrow, plus a statement at the next debate, 165 00:08:03,120 --> 00:08:05,480 Speaker 6: so forth, you'll begin to get a better picture of 166 00:08:05,520 --> 00:08:08,160 Speaker 6: what ultimately could happen. So I'm not gonna say that 167 00:08:08,200 --> 00:08:10,240 Speaker 6: you know you're gonna see massive headlines tomorrow saying the 168 00:08:10,280 --> 00:08:12,760 Speaker 6: markets are moving based off of this. But you know, 169 00:08:12,840 --> 00:08:14,520 Speaker 6: we've told a lot of our clients. If you have 170 00:08:14,640 --> 00:08:17,000 Speaker 6: an associate that wants to stay up late tonight, have 171 00:08:17,080 --> 00:08:19,360 Speaker 6: the association to take a look at it, watch this, 172 00:08:19,440 --> 00:08:20,760 Speaker 6: and then send you a report in the morning. 173 00:08:21,360 --> 00:08:23,679 Speaker 5: All right, I'll get you can send me my report. 174 00:08:23,680 --> 00:08:25,840 Speaker 5: You've got my email address because I'm not understating I'm 175 00:08:26,120 --> 00:08:28,760 Speaker 5: watching this. I don't think the Yankees are on anyway. 176 00:08:28,920 --> 00:08:31,600 Speaker 7: Nathan Dean off tomorrow, you technically can. 177 00:08:31,800 --> 00:08:33,959 Speaker 5: You're right, You're hey, thank you for pointing that I 178 00:08:33,960 --> 00:08:35,760 Speaker 5: want not have to get up at four twenty. Okay, 179 00:08:35,840 --> 00:08:39,000 Speaker 5: very good, Nathan Dean Senior Polo Sanos for Bloomberg Intelligence. 180 00:08:39,040 --> 00:08:41,959 Speaker 5: He's down there in DC for better or worse. That's 181 00:08:41,960 --> 00:08:44,520 Speaker 5: where he's located here. So are you gonna watch the 182 00:08:44,520 --> 00:08:45,079 Speaker 5: debate tonight? 183 00:08:46,600 --> 00:08:46,840 Speaker 1: Yes? 184 00:08:46,920 --> 00:08:49,800 Speaker 3: No, I mean like I don't want to, but like 185 00:08:49,840 --> 00:08:51,720 Speaker 3: I want to, and I feel like I have to. 186 00:08:51,920 --> 00:08:54,680 Speaker 5: Although you know, with the ground rules, no audience, no 187 00:08:55,000 --> 00:08:56,840 Speaker 5: the moot and MIC's, it's not gonna be as much 188 00:08:56,920 --> 00:08:59,480 Speaker 5: drama as it could be, which is why I think 189 00:08:59,480 --> 00:09:01,719 Speaker 5: some people watch it just for the drama. 190 00:09:01,400 --> 00:09:04,720 Speaker 3: Maybe, But I am actually interested, you know, if any 191 00:09:04,800 --> 00:09:08,079 Speaker 3: kind of policy is actually discussed, like if it's gonna 192 00:09:08,080 --> 00:09:09,040 Speaker 3: be barbs thrown back and. 193 00:09:09,000 --> 00:09:10,800 Speaker 1: Forth, I can tell you who the loser is going 194 00:09:10,880 --> 00:09:13,440 Speaker 1: to be intelligent, discourse. 195 00:09:13,040 --> 00:09:16,800 Speaker 3: Intelligent, but like, but you know, I don't know. Yes, 196 00:09:16,880 --> 00:09:19,400 Speaker 3: I'll probably turn it on, okay until we have family 197 00:09:19,440 --> 00:09:20,040 Speaker 3: reading time. 198 00:09:19,920 --> 00:09:20,800 Speaker 5: At around nine thirty. 199 00:09:20,840 --> 00:09:21,520 Speaker 7: Definitely reading. 200 00:09:21,679 --> 00:09:23,360 Speaker 3: I'll give it half an hour. I'll give it half 201 00:09:23,360 --> 00:09:25,600 Speaker 3: an hour, and then we'll circle back before that family reading. 202 00:09:27,160 --> 00:09:31,040 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 203 00:09:31,120 --> 00:09:34,680 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 204 00:09:34,679 --> 00:09:37,839 Speaker 1: Auto with the Bloomberg Business. You can also listen live 205 00:09:37,960 --> 00:09:41,120 Speaker 1: on Amazon Alexa from our flagship New York station, Just 206 00:09:41,200 --> 00:09:46,000 Speaker 1: Say Alexa play Bloomberg eleven thirty. 207 00:09:45,520 --> 00:09:47,800 Speaker 5: Alex Deal Paul Sweeney live here in our Bloomberg Interactive 208 00:09:47,800 --> 00:09:50,320 Speaker 5: Brokers studio, or streaming live on YouTube as well. 209 00:09:50,400 --> 00:09:51,560 Speaker 7: So heent over to YouTube dot. 210 00:09:51,440 --> 00:09:54,800 Speaker 5: Com and search Bloomberg Podcast. I'll get a new guy 211 00:09:55,320 --> 00:09:57,520 Speaker 5: in here today, a new guy. We'll see how he does. 212 00:09:57,600 --> 00:09:59,960 Speaker 3: Jake Silverman, Jordans, Sorry, Jake, it's going to be fine. 213 00:10:01,040 --> 00:10:03,320 Speaker 5: It was an analyst Bloomberg Intelligence. I did not hire them, 214 00:10:03,320 --> 00:10:06,040 Speaker 5: so I can't vouch for him. Hire everybody else. He 215 00:10:06,080 --> 00:10:08,319 Speaker 5: comes to the technology Stace. We got a great, great 216 00:10:08,360 --> 00:10:11,640 Speaker 5: technology team all around the world. Everywhere you need tech 217 00:10:11,679 --> 00:10:14,160 Speaker 5: people to be Silicon Valley, Asia, New York, we got 218 00:10:14,200 --> 00:10:18,880 Speaker 5: them as well. Micron Technologies, the largest US maker of 219 00:10:19,040 --> 00:10:22,400 Speaker 5: computer memory chips is John Talker's just reporting dropped after 220 00:10:22,600 --> 00:10:24,760 Speaker 5: it's forecast disappointed investors. 221 00:10:25,080 --> 00:10:27,040 Speaker 7: Uh so we got an issue there about this chip maker. 222 00:10:27,240 --> 00:10:29,160 Speaker 5: Jake, thanks so much for joining us here in studio. 223 00:10:29,880 --> 00:10:32,440 Speaker 5: Give us the Micron technology story. How were their earnings? 224 00:10:32,559 --> 00:10:33,840 Speaker 5: Why is this TOC trading word is? 225 00:10:34,000 --> 00:10:35,960 Speaker 7: Yeah, thanks so much for having me on. Yeah. So 226 00:10:36,920 --> 00:10:40,360 Speaker 7: three Q was a beat, but the stocks up. 227 00:10:40,280 --> 00:10:43,000 Speaker 8: Over sixty percent or prior to earnings, was up over 228 00:10:43,040 --> 00:10:45,520 Speaker 8: sixty percent a year today. So coming into the quarter, 229 00:10:45,640 --> 00:10:50,440 Speaker 8: expectations were fairly high. And so when we've seen a 230 00:10:50,480 --> 00:10:54,880 Speaker 8: beaten raise beaten rays. As pricing has improved, supply has 231 00:10:54,920 --> 00:10:58,600 Speaker 8: been pretty tight intentionally by all of the memory suppliers 232 00:10:58,840 --> 00:11:01,920 Speaker 8: over the last year or so because there was a 233 00:11:01,960 --> 00:11:05,319 Speaker 8: severe demand reduction back in twenty twenty three, and now 234 00:11:05,320 --> 00:11:09,280 Speaker 8: as we're looking into twenty twenty four, supply is tight, 235 00:11:09,520 --> 00:11:13,439 Speaker 8: demand has stabilized now is beginning to recover quarter to quarter. 236 00:11:13,840 --> 00:11:18,520 Speaker 8: So investors, the market was really expecting another beaten Rays. 237 00:11:18,600 --> 00:11:22,120 Speaker 8: I think coming into three Q with the outlook being 238 00:11:22,160 --> 00:11:25,120 Speaker 8: related to four Q so being a sort of inline 239 00:11:25,120 --> 00:11:28,120 Speaker 8: guide at least on revenue, I think was pretty disappointing. 240 00:11:28,160 --> 00:11:30,600 Speaker 8: And you also have the AI aspect, which I think 241 00:11:30,679 --> 00:11:33,520 Speaker 8: adds to a little bit of that multiple expansion that 242 00:11:33,559 --> 00:11:35,440 Speaker 8: we're seeing, and so I think that that plays a 243 00:11:35,440 --> 00:11:36,840 Speaker 8: part into those expectations. 244 00:11:36,880 --> 00:11:39,240 Speaker 3: So well, if we just separate for a second, if 245 00:11:39,280 --> 00:11:42,160 Speaker 3: we can, like you have the AI growth story, which 246 00:11:42,320 --> 00:11:45,280 Speaker 3: still was delivering on all cylinders from Micron, and then 247 00:11:45,280 --> 00:11:47,640 Speaker 3: there's the actual boring stuff like the things that go 248 00:11:47,679 --> 00:11:50,479 Speaker 3: into your phone and your computer and things like that. 249 00:11:50,480 --> 00:11:55,439 Speaker 3: That market has been has troughed. But the pickup is 250 00:11:55,520 --> 00:11:57,960 Speaker 3: when the question is do we learn anything about when 251 00:11:57,960 --> 00:11:59,960 Speaker 3: we might see a real recovery in that, because my 252 00:12:00,080 --> 00:12:01,120 Speaker 3: front still needs. 253 00:12:00,920 --> 00:12:01,480 Speaker 7: That, right. 254 00:12:01,640 --> 00:12:03,880 Speaker 8: Yeah, So that was actually what was more important about 255 00:12:03,960 --> 00:12:07,680 Speaker 8: the tight supply story from twenty twenty three up until 256 00:12:07,720 --> 00:12:09,680 Speaker 8: now and then continuing through the rest of this year 257 00:12:09,679 --> 00:12:11,960 Speaker 8: and probably in the next year as well. The AI 258 00:12:12,040 --> 00:12:14,959 Speaker 8: part of the story was pretty nascent up until more recently, 259 00:12:14,960 --> 00:12:17,640 Speaker 8: and we're still only now starting to see AI revenue 260 00:12:17,679 --> 00:12:21,960 Speaker 8: actually inflect high bandwidth memory revenue for HBM THREEE, their 261 00:12:22,000 --> 00:12:25,160 Speaker 8: product that's being sold into in Nvidia's H two hundred GPU, 262 00:12:25,520 --> 00:12:27,679 Speaker 8: that's only that was only about a little more than 263 00:12:28,200 --> 00:12:32,559 Speaker 8: one hundred million this quarter, So there's other AI products 264 00:12:32,559 --> 00:12:35,120 Speaker 8: as well, but yeah, we're starting to see demand. I 265 00:12:35,160 --> 00:12:40,440 Speaker 8: think stabilizing for smartphones, PCs, traditional servers, and we're expecting 266 00:12:40,480 --> 00:12:43,199 Speaker 8: some growth throughout the rest of this year, primarily on 267 00:12:43,240 --> 00:12:46,280 Speaker 8: the back of seasonal demand. So yeah, I think that 268 00:12:46,320 --> 00:12:48,920 Speaker 8: those are definitely areas that investors are certainly going to 269 00:12:48,920 --> 00:12:53,200 Speaker 8: be looking for, and if that demand doesn't necessarily materialize, 270 00:12:53,240 --> 00:12:55,640 Speaker 8: then the pricing might not increase at the magnitude at 271 00:12:55,640 --> 00:12:58,800 Speaker 8: which the market is expecting, which would impact revenue and 272 00:12:58,800 --> 00:12:59,880 Speaker 8: margin growth throughout the rest. 273 00:13:00,440 --> 00:13:02,319 Speaker 5: I don't know a lot about the semiconductor business, and 274 00:13:02,360 --> 00:13:03,760 Speaker 5: I want to keep it that way, But what I 275 00:13:03,840 --> 00:13:06,199 Speaker 5: do know is it's a cyclical business. You got to 276 00:13:06,240 --> 00:13:07,400 Speaker 5: get those cycles right. 277 00:13:07,760 --> 00:13:10,160 Speaker 7: Does AI change the cyclicality? Do you think? 278 00:13:10,480 --> 00:13:12,480 Speaker 5: Do we know enough to say that maybe it don't 279 00:13:12,480 --> 00:13:14,280 Speaker 5: make it less cyclical or maybe more so. 280 00:13:15,240 --> 00:13:18,160 Speaker 8: Yeah, it's a very good question. It's difficult to say 281 00:13:18,240 --> 00:13:21,319 Speaker 8: right now. I think because this AI build out for 282 00:13:21,440 --> 00:13:24,760 Speaker 8: AI infrastructure, it's so early, so we don't really know 283 00:13:24,800 --> 00:13:27,120 Speaker 8: what that cycle will look like. But this is certainly 284 00:13:27,120 --> 00:13:31,160 Speaker 8: a secular driver in the near term. AI infrastructure buildouts 285 00:13:31,160 --> 00:13:35,120 Speaker 8: from the hyperscalers are continuing. There's potentially some upward bias 286 00:13:35,160 --> 00:13:37,920 Speaker 8: to those estimates and those expenditures this year, and so 287 00:13:37,960 --> 00:13:41,040 Speaker 8: as long as that continues, that should have like a 288 00:13:41,160 --> 00:13:45,880 Speaker 8: multifold impact on Micron because there's another aspect, which is, 289 00:13:45,920 --> 00:13:48,360 Speaker 8: first of all, there's a couple aspects. First of all, 290 00:13:48,559 --> 00:13:52,240 Speaker 8: HBM is margin acreative, and some of those other products 291 00:13:52,240 --> 00:13:54,640 Speaker 8: that are related to AI are also margin acreative, so 292 00:13:54,880 --> 00:13:58,880 Speaker 8: talking about high capacity DRAM module, solid state drives, but 293 00:13:59,120 --> 00:14:04,000 Speaker 8: HBM more so. But also HBM takes up additional wafer capacity. 294 00:14:03,640 --> 00:14:06,000 Speaker 3: High band with memory, yes. 295 00:14:05,360 --> 00:14:09,920 Speaker 8: High bandwid memory, sorry HBM, but that also takes up 296 00:14:10,040 --> 00:14:10,439 Speaker 8: way it. 297 00:14:10,360 --> 00:14:12,080 Speaker 3: Took me like ten minutes. That will remember that, so 298 00:14:12,320 --> 00:14:13,600 Speaker 3: you don't want to say nice, yes. 299 00:14:13,480 --> 00:14:16,760 Speaker 8: Sorry, I go in and out of h memory. 300 00:14:16,800 --> 00:14:17,400 Speaker 7: No, thank you. 301 00:14:18,480 --> 00:14:21,960 Speaker 8: So but also it takes up additional wafer capacity for 302 00:14:23,080 --> 00:14:26,960 Speaker 8: high bandwidth memory, so about three times as much. So 303 00:14:27,000 --> 00:14:30,960 Speaker 8: that actually, as you shift capacity away from standard memory 304 00:14:31,000 --> 00:14:34,560 Speaker 8: towards HBM, that has a specific impact on the actual 305 00:14:34,600 --> 00:14:38,480 Speaker 8: supply allocation. So as that demand continues to increase, that 306 00:14:38,560 --> 00:14:42,440 Speaker 8: actually takes supply away from traditional markets as well. So 307 00:14:42,840 --> 00:14:45,360 Speaker 8: ultimately you have a two fold impact where you have 308 00:14:45,480 --> 00:14:49,760 Speaker 8: margin expansion, but you also have pricing probably increasing even 309 00:14:49,800 --> 00:14:53,520 Speaker 8: if demand is somewhat stable because the supply comes offline 310 00:14:53,880 --> 00:14:57,960 Speaker 8: from traditional end markets and goes towards AI well. 311 00:14:58,000 --> 00:15:01,400 Speaker 3: Also to the cyclical point too. As long as AI 312 00:15:01,520 --> 00:15:04,600 Speaker 3: chips keep getting better and better with each iteration, doesn't 313 00:15:04,640 --> 00:15:07,440 Speaker 3: that take away some of the near term cyclicality, Like 314 00:15:07,800 --> 00:15:10,280 Speaker 3: because by the time you get your old chip, then 315 00:15:10,280 --> 00:15:12,080 Speaker 3: the new chip is like that much more awesome, so 316 00:15:12,200 --> 00:15:14,000 Speaker 3: you have to go buy it, and at some point 317 00:15:14,080 --> 00:15:14,880 Speaker 3: that runs out. 318 00:15:15,320 --> 00:15:18,720 Speaker 8: So I just yeah, it's difficult to determine actually what 319 00:15:18,800 --> 00:15:21,320 Speaker 8: the magnitude of the cyclicality will be up or down. 320 00:15:21,520 --> 00:15:23,600 Speaker 8: I think what this is really going to do right now, 321 00:15:23,640 --> 00:15:25,960 Speaker 8: at least in the near term, will extend the current 322 00:15:26,080 --> 00:15:29,960 Speaker 8: up cycle. So the peak is difficult to determine when 323 00:15:30,000 --> 00:15:32,240 Speaker 8: that will happen. I mean, you can always guess. I 324 00:15:32,240 --> 00:15:34,680 Speaker 8: don't think people are very accurate at guessing peaks and 325 00:15:34,720 --> 00:15:38,480 Speaker 8: troughs at least multiple quarters out. But you know, in 326 00:15:38,520 --> 00:15:42,080 Speaker 8: this case, as long as there's those secular demand drivers, 327 00:15:42,880 --> 00:15:45,320 Speaker 8: we think the cycle can continue its upward trajectory. 328 00:15:45,840 --> 00:15:48,200 Speaker 7: Jake, great stuff. Yeah, we can bring him back right. 329 00:15:48,240 --> 00:15:49,040 Speaker 2: Oh yeah, he was great. 330 00:15:49,080 --> 00:15:49,640 Speaker 7: He was really good. 331 00:15:49,680 --> 00:15:49,840 Speaker 6: Yeah. 332 00:15:49,960 --> 00:15:54,240 Speaker 5: Yeah, another tech voice, which we desperately need because we can't. 333 00:15:54,160 --> 00:15:55,880 Speaker 7: Keep going back from man deep at on a rock. 334 00:15:56,200 --> 00:15:58,680 Speaker 3: I mean, you know, boring, they have other jobs. 335 00:15:58,960 --> 00:16:01,520 Speaker 7: Thank you so much, all right, Jake Silverman semi conduct around. 336 00:16:01,520 --> 00:16:03,880 Speaker 5: Also Bloomberg Intelligence joining us here on our Bloomberg Interactive 337 00:16:03,880 --> 00:16:06,000 Speaker 5: brokers to you talking about the chip business. 338 00:16:07,520 --> 00:16:11,400 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 339 00:16:11,480 --> 00:16:14,560 Speaker 1: weekdays at ten am Eastern on Affo, Cardplay and Android 340 00:16:14,560 --> 00:16:17,680 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 341 00:16:17,720 --> 00:16:21,560 Speaker 1: you get your podcasts, or watch us live on YouTube. 342 00:16:22,400 --> 00:16:24,520 Speaker 3: Are joining us sound Kate Richards, founder and CEO of 343 00:16:24,600 --> 00:16:28,240 Speaker 3: Warwick Investment Group. So, Warwick Investment is the largest PE 344 00:16:28,360 --> 00:16:30,080 Speaker 3: firm in the US that's founded and led by a 345 00:16:30,080 --> 00:16:33,440 Speaker 3: woman founder and it focuses on real assets like natural 346 00:16:33,480 --> 00:16:36,440 Speaker 3: resources in real estate. I've known Kate for a long while, 347 00:16:36,480 --> 00:16:38,240 Speaker 3: it feels, but I haven't seen you in forever in 348 00:16:38,240 --> 00:16:38,600 Speaker 3: a day. 349 00:16:39,720 --> 00:16:41,800 Speaker 2: How are you great? Thanks for having me. 350 00:16:41,880 --> 00:16:43,440 Speaker 9: I think that the fact that I haven't seen you 351 00:16:43,600 --> 00:16:46,400 Speaker 9: is probably sort of reflective of what most people haven't seen, 352 00:16:46,440 --> 00:16:49,120 Speaker 9: which is commodities in their portfolio over the past decade. 353 00:16:49,240 --> 00:16:50,720 Speaker 3: Oh way to turn that in. 354 00:16:50,800 --> 00:16:51,440 Speaker 7: I like this. 355 00:16:52,400 --> 00:16:55,280 Speaker 3: So what we're seeing in the trend is a people 356 00:16:55,320 --> 00:16:58,400 Speaker 3: want to own commodities in their portfolio, but like not 357 00:16:58,480 --> 00:17:00,560 Speaker 3: all commodities, but be very specific. But we almos seen 358 00:17:00,560 --> 00:17:02,640 Speaker 3: a ton of m and a big guys with the 359 00:17:02,680 --> 00:17:05,000 Speaker 3: medium guys, medium guys, with medium guys, small guys and 360 00:17:05,000 --> 00:17:08,159 Speaker 3: small guys. How do you think this winds up playing out? 361 00:17:08,240 --> 00:17:09,679 Speaker 3: And what are the opportunities set for you? 362 00:17:10,119 --> 00:17:10,840 Speaker 2: I think two things. 363 00:17:10,840 --> 00:17:13,399 Speaker 9: So number one, we're probably at the beginning of a 364 00:17:13,440 --> 00:17:16,520 Speaker 9: new commodity price super cycle. And the first one was 365 00:17:16,560 --> 00:17:20,760 Speaker 9: two thousand to twenty fifteen driven by urbanization and industrialization 366 00:17:20,840 --> 00:17:21,280 Speaker 9: in China. 367 00:17:21,560 --> 00:17:23,320 Speaker 2: This one's driven by the energy transition. 368 00:17:23,840 --> 00:17:27,359 Speaker 9: And what's ironic is that it's obviously increasing demand for 369 00:17:27,400 --> 00:17:32,040 Speaker 9: battery metals like nickel, lithium, copper, maybe cobalt. And secondly 370 00:17:32,080 --> 00:17:35,920 Speaker 9: that it's actually increasing demand for hydrocarbons because the energy 371 00:17:35,920 --> 00:17:38,680 Speaker 9: transition is hydro carbon intensive. And if you need any 372 00:17:38,680 --> 00:17:40,280 Speaker 9: evidence of that, you can look at what happened with 373 00:17:40,400 --> 00:17:43,000 Speaker 9: China last year, the largest ev market in the world, 374 00:17:43,200 --> 00:17:46,520 Speaker 9: where hydrocarbon demand actually went up. And so the cautionary 375 00:17:46,520 --> 00:17:49,760 Speaker 9: tale is looking at gasoline demand trends, which in China 376 00:17:49,800 --> 00:17:53,080 Speaker 9: went down last year, and equating that to price trajectory 377 00:17:53,080 --> 00:17:56,200 Speaker 9: for oil or demand for oil, So I think that's 378 00:17:56,240 --> 00:17:59,200 Speaker 9: really something that's important. It's a subtlety, but whatever's happening 379 00:17:59,200 --> 00:18:02,160 Speaker 9: with EV's and what what ever's happening with gasoline trends? 380 00:18:02,200 --> 00:18:04,760 Speaker 9: Because of v adoption, you can't relate to the price 381 00:18:04,760 --> 00:18:09,800 Speaker 9: of oil or demand for oil. But even that being said, 382 00:18:09,840 --> 00:18:12,600 Speaker 9: oil and gasoline where at all time highs in terms 383 00:18:12,640 --> 00:18:13,560 Speaker 9: of demand last year. 384 00:18:13,760 --> 00:18:16,760 Speaker 7: Well, Alex as you know, is the energy expert, I 385 00:18:16,800 --> 00:18:17,080 Speaker 7: am not. 386 00:18:18,600 --> 00:18:21,480 Speaker 5: What's your view of this energy transition because it seems 387 00:18:21,520 --> 00:18:23,680 Speaker 5: like just if I just think about evs to kind 388 00:18:23,680 --> 00:18:25,439 Speaker 5: of take it a tick down a little bit over 389 00:18:25,440 --> 00:18:26,520 Speaker 5: the last couple of years. 390 00:18:26,560 --> 00:18:27,399 Speaker 7: How do you guys view that? 391 00:18:27,720 --> 00:18:30,520 Speaker 9: Well, I think that you know, we deal in communities 392 00:18:30,520 --> 00:18:32,720 Speaker 9: that don't want to talk about energy transition at all, 393 00:18:33,000 --> 00:18:34,480 Speaker 9: and then on the mining side of our life, we 394 00:18:34,480 --> 00:18:37,479 Speaker 9: deal in communities that will not talk about hydrocarbons as 395 00:18:37,520 --> 00:18:40,920 Speaker 9: an ongoing source of energy in the world, and both 396 00:18:40,960 --> 00:18:42,160 Speaker 9: of those are unrealistic. 397 00:18:42,640 --> 00:18:46,120 Speaker 2: We talk about energy as kaleidoscopic, and. 398 00:18:46,080 --> 00:18:49,359 Speaker 9: You will have certain jurisdictions like the East Coast, the 399 00:18:49,359 --> 00:18:51,920 Speaker 9: West coast of the US, the OECD, certainly Europe that 400 00:18:51,960 --> 00:18:54,520 Speaker 9: will skew more renewable in terms of power and more 401 00:18:54,560 --> 00:18:57,359 Speaker 9: ev in terms of vehicles, and then you will have 402 00:18:57,400 --> 00:19:00,320 Speaker 9: groups that do not. And I think the problem is 403 00:19:00,359 --> 00:19:03,639 Speaker 9: that in sitting in the OECD and reading all of 404 00:19:03,680 --> 00:19:06,960 Speaker 9: the kind of typical like New York Times, Wall Street Journal, 405 00:19:07,080 --> 00:19:10,760 Speaker 9: FT economists, maybe Bloomberg Axios, you sort of think like, oh, 406 00:19:10,760 --> 00:19:15,520 Speaker 9: the energy transition is happening, and conventional vehicles and conventional. 407 00:19:15,080 --> 00:19:16,160 Speaker 2: Fuels are going out of business. 408 00:19:16,240 --> 00:19:18,280 Speaker 9: The problem is that if we look at the last 409 00:19:18,320 --> 00:19:21,840 Speaker 9: twenty two years, the OECD, which is about four in 410 00:19:21,880 --> 00:19:24,600 Speaker 9: a million people, has taken demand for hidercarbons down two 411 00:19:24,600 --> 00:19:27,480 Speaker 9: million barrels a day, and the nano ACD has taken 412 00:19:27,560 --> 00:19:30,200 Speaker 9: hydercarbon demand up twenty five million barrels a day. 413 00:19:30,480 --> 00:19:32,440 Speaker 2: So it's just a law of large numbers. 414 00:19:32,600 --> 00:19:34,880 Speaker 9: And the fact is that if you wanted to say 415 00:19:35,080 --> 00:19:37,399 Speaker 9: no traditional energy, that's unrealistic. 416 00:19:37,480 --> 00:19:39,600 Speaker 2: We don't have enough copper in the world to supply that. 417 00:19:39,760 --> 00:19:42,120 Speaker 9: But if you wanted to say no renewables, we don't 418 00:19:42,119 --> 00:19:44,520 Speaker 9: have enough oil or energy to supply the world. So 419 00:19:44,560 --> 00:19:46,919 Speaker 9: it has to be kaleidoscopic. And it's really in all 420 00:19:46,920 --> 00:19:49,880 Speaker 9: of the above energy solution, including nuclear, which last year 421 00:19:49,920 --> 00:19:52,480 Speaker 9: came into the conversation as carbon. 422 00:19:52,160 --> 00:19:54,640 Speaker 2: Free, kaleidoscopic. I'm totally stealing this one. 423 00:19:54,760 --> 00:19:58,919 Speaker 3: Yeah, so Kate. When we have this interest though in 424 00:19:58,920 --> 00:20:02,720 Speaker 3: the energy space among energy companies, does that make exit 425 00:20:02,720 --> 00:20:04,040 Speaker 3: strategies more appealing for you? 426 00:20:04,119 --> 00:20:06,360 Speaker 2: Like are you buying more? Are you selling more? Right now? 427 00:20:06,400 --> 00:20:08,520 Speaker 3: Because for a while it felt like assets in private 428 00:20:08,520 --> 00:20:10,760 Speaker 3: equity when related to energy was stuck. 429 00:20:11,040 --> 00:20:13,000 Speaker 2: It was going nowhere fast. 430 00:20:13,240 --> 00:20:16,879 Speaker 9: So in twenty eighteen, we had a number of oiling 431 00:20:16,880 --> 00:20:18,800 Speaker 9: gas companies one could probably argue too many. 432 00:20:18,880 --> 00:20:19,399 Speaker 2: In the US. 433 00:20:19,760 --> 00:20:22,359 Speaker 9: Sixty percent of the oiling gas companies that existed in 434 00:20:22,359 --> 00:20:24,960 Speaker 9: twenty eighteen don't exist today because of M and A. 435 00:20:25,280 --> 00:20:28,240 Speaker 2: So there has been massive consolidation in this space. And 436 00:20:28,280 --> 00:20:29,480 Speaker 2: we're probably not going. 437 00:20:29,240 --> 00:20:31,920 Speaker 9: Back to the seventies where it was like the seven Sisters, 438 00:20:31,920 --> 00:20:33,640 Speaker 9: you know, seven big companies, but we might be going 439 00:20:33,680 --> 00:20:37,520 Speaker 9: back to fifteen companies. So definitely there is consolidation. And 440 00:20:37,560 --> 00:20:40,440 Speaker 9: that consolidation was localized in the Permian basin in West 441 00:20:40,440 --> 00:20:43,199 Speaker 9: Texas until this year. And I would say now the 442 00:20:43,200 --> 00:20:46,000 Speaker 9: Permian's pretty consolidated, and now it's going to other basins 443 00:20:46,000 --> 00:20:48,280 Speaker 9: in the US. So this is sort of a cross 444 00:20:48,280 --> 00:20:51,520 Speaker 9: base in US consolidation story. That's number one. Number two, 445 00:20:51,600 --> 00:20:54,760 Speaker 9: it's definitely cheaper to buy assets. So twenty you know, 446 00:20:54,960 --> 00:20:58,080 Speaker 9: fourteen fifteen, we would pay seven to ten times EBITDA. 447 00:20:58,320 --> 00:21:01,120 Speaker 9: We're buying assets now for one to three times ebit. 448 00:21:00,960 --> 00:21:02,679 Speaker 3: Do it doesn't mean that you're sorry. Sorry, doesn't mean 449 00:21:02,720 --> 00:21:04,560 Speaker 3: that you're selling assets for that too, though. 450 00:21:05,280 --> 00:21:07,719 Speaker 9: It does not mean that because in a lot of cases, 451 00:21:07,720 --> 00:21:10,280 Speaker 9: people need to pay for inventory because the reason, like 452 00:21:10,320 --> 00:21:12,840 Speaker 9: to your point, why are the midcaps buying small caps 453 00:21:12,880 --> 00:21:13,800 Speaker 9: or why are the small. 454 00:21:13,520 --> 00:21:14,440 Speaker 2: Caps trying to buy? 455 00:21:14,480 --> 00:21:16,440 Speaker 9: Like why is this game of pac man happening where 456 00:21:16,440 --> 00:21:18,240 Speaker 9: it's either get consolidated or consolidate? 457 00:21:18,440 --> 00:21:20,159 Speaker 2: It's because people are short inventory. 458 00:21:20,320 --> 00:21:22,679 Speaker 9: So in your private portfolio, if you have inventory, or 459 00:21:22,800 --> 00:21:24,960 Speaker 9: if you're a public company and inventory, you are attractive 460 00:21:25,240 --> 00:21:28,480 Speaker 9: and it's it's a game to get bigger before. 461 00:21:28,280 --> 00:21:30,200 Speaker 2: All of the chips are sort of held by big 462 00:21:30,280 --> 00:21:30,960 Speaker 2: public companies. 463 00:21:31,040 --> 00:21:35,199 Speaker 5: You mentioned nuclear, What is a a what is a 464 00:21:35,240 --> 00:21:39,040 Speaker 5: reasonable nuclear policy from your perspective, because I'm hearing more 465 00:21:39,040 --> 00:21:41,280 Speaker 5: about the technology changing now we don't have to build 466 00:21:41,280 --> 00:21:43,520 Speaker 5: these monster reactors, the little ones. 467 00:21:44,880 --> 00:21:46,199 Speaker 7: Yeah, that seems reason to me. 468 00:21:46,359 --> 00:21:49,080 Speaker 9: So I actually think there's a really interesting fight that's 469 00:21:49,119 --> 00:21:54,040 Speaker 9: sort of like brewing between big tech and LNG exporters frankly, 470 00:21:54,080 --> 00:21:56,840 Speaker 9: because big tech knows that they are massive power consumers 471 00:21:56,960 --> 00:22:00,679 Speaker 9: and they need power quickly, especially if you're depositing that. 472 00:22:00,720 --> 00:22:04,199 Speaker 2: It's like this AI fight nationally, that's a national interest. 473 00:22:04,560 --> 00:22:07,119 Speaker 9: So if you talk to big tech, they'll say, you know, 474 00:22:07,200 --> 00:22:10,159 Speaker 9: AI ushers in a nuclear renaissance, and it's not that 475 00:22:10,240 --> 00:22:13,560 Speaker 9: hard because we have these small modular nuclear reactors. 476 00:22:13,600 --> 00:22:15,800 Speaker 2: This is an existing technology. It's on submarines all over 477 00:22:15,800 --> 00:22:16,160 Speaker 2: the world. 478 00:22:16,760 --> 00:22:18,840 Speaker 9: The fact is you'll probably see some of that, but 479 00:22:18,880 --> 00:22:20,480 Speaker 9: you will also probably see some of it go. 480 00:22:20,359 --> 00:22:22,719 Speaker 2: To natural gas and some more go to renewables. 481 00:22:22,760 --> 00:22:24,840 Speaker 9: I think that big tech is probably going to have 482 00:22:24,880 --> 00:22:29,160 Speaker 9: to embrace many like a kaleidoscopic power outlets. 483 00:22:30,160 --> 00:22:34,399 Speaker 5: We haven't put any nuclear plants in operation like like 484 00:22:35,480 --> 00:22:39,119 Speaker 5: right right, Yeah, So to say I'm going to power 485 00:22:39,240 --> 00:22:42,080 Speaker 5: this data center with a small nuclear plant, that is 486 00:22:42,119 --> 00:22:43,000 Speaker 5: a huge deal. 487 00:22:43,160 --> 00:22:44,160 Speaker 2: Yeah. 488 00:22:44,200 --> 00:22:44,320 Speaker 10: You know. 489 00:22:44,400 --> 00:22:47,199 Speaker 9: There's also probably not the uranium to power a nuclear 490 00:22:47,200 --> 00:22:49,960 Speaker 9: renaissance right now, particularly with the House and Senate now 491 00:22:50,119 --> 00:22:52,880 Speaker 9: restricting twenty percent of the uranium market to be imported 492 00:22:52,880 --> 00:22:54,919 Speaker 9: into the US. And that matters because the US is 493 00:22:54,920 --> 00:22:58,159 Speaker 9: the largest consumer of uranium and we are now like 494 00:22:58,200 --> 00:22:59,800 Speaker 9: as of twenty twenty seven or twenty two eight, not 495 00:22:59,840 --> 00:23:02,320 Speaker 9: allowed to buy uranium from Kazakhstanta, Russia. 496 00:23:02,400 --> 00:23:05,399 Speaker 3: So yeah, but to your point, Paul, they are considering 497 00:23:05,800 --> 00:23:09,000 Speaker 3: restarting a nuclear plant that was closed that's quite big. 498 00:23:09,080 --> 00:23:12,199 Speaker 3: And the SMRs, these small modular reactors, they're just the 499 00:23:12,240 --> 00:23:16,560 Speaker 3: economics are so wide, like you just can't make the 500 00:23:16,560 --> 00:23:18,920 Speaker 3: economics work yet. Okay, But I like that you brought 501 00:23:19,000 --> 00:23:21,200 Speaker 3: the uranium factor because what we are seeing is oil 502 00:23:21,240 --> 00:23:24,080 Speaker 3: companies going to mining, particularly with lithium. 503 00:23:24,080 --> 00:23:25,320 Speaker 2: And I'm wondering if like there's a. 504 00:23:25,280 --> 00:23:28,200 Speaker 3: Way that you are thinking about your oil and your 505 00:23:28,440 --> 00:23:32,080 Speaker 3: like real play, like the hard asset plays, Like is 506 00:23:32,119 --> 00:23:32,560 Speaker 3: there a play? 507 00:23:32,560 --> 00:23:33,640 Speaker 2: Are there plays for you there? 508 00:23:33,880 --> 00:23:34,080 Speaker 5: Yeah? 509 00:23:34,160 --> 00:23:36,800 Speaker 9: I think well, for definitely, so oil and gas companies 510 00:23:36,840 --> 00:23:40,080 Speaker 9: are actively looking at lithium because we extract lithium when 511 00:23:40,119 --> 00:23:42,760 Speaker 9: we bring water out of the ground in saltwater brine 512 00:23:42,800 --> 00:23:45,800 Speaker 9: across the US, So that is definitely a play. The 513 00:23:45,880 --> 00:23:47,520 Speaker 9: other thing is that a lot of the mining companies 514 00:23:47,560 --> 00:23:49,879 Speaker 9: don't know how to lease acreage to do mind expansion, 515 00:23:49,960 --> 00:23:51,840 Speaker 9: and that's something that oil and gas companies. 516 00:23:51,520 --> 00:23:52,200 Speaker 2: Are very good at. 517 00:23:52,280 --> 00:23:54,919 Speaker 9: So I actually think you're seeing this like merger of 518 00:23:54,960 --> 00:23:57,879 Speaker 9: the natural resources Brethren in a lot of ways, and 519 00:23:57,920 --> 00:24:01,439 Speaker 9: the similarities are fascinating because like mining and oil and 520 00:24:01,440 --> 00:24:05,280 Speaker 9: gas globally have both decreased capex forty percent since the 521 00:24:05,320 --> 00:24:08,280 Speaker 9: twenty thirteen twenty fourteen timeframe, and mining and oil and 522 00:24:08,320 --> 00:24:11,440 Speaker 9: gas companies also are only spending forty percent of cash 523 00:24:11,480 --> 00:24:14,600 Speaker 9: flow on capex today and they're both essential for the 524 00:24:14,680 --> 00:24:17,280 Speaker 9: energy transition. So I think you're probably going to start 525 00:24:17,320 --> 00:24:20,600 Speaker 9: to see a lot more intersection of conversation around oil 526 00:24:20,600 --> 00:24:23,720 Speaker 9: and gas and mining companies, just as these natural resources 527 00:24:23,960 --> 00:24:26,840 Speaker 9: businesses that haven't really been super relevant for the past 528 00:24:26,880 --> 00:24:29,240 Speaker 9: ten years but are increasingly very relevant. 529 00:24:29,480 --> 00:24:31,160 Speaker 2: Cool, right, super cool? 530 00:24:31,440 --> 00:24:31,600 Speaker 4: Good. 531 00:24:31,920 --> 00:24:32,919 Speaker 3: Kate appreciate it. 532 00:24:33,200 --> 00:24:34,080 Speaker 2: So don't be a stranger. 533 00:24:34,080 --> 00:24:35,480 Speaker 3: You don't have to be here to do this, so 534 00:24:35,520 --> 00:24:38,960 Speaker 3: we can definitely chat remotely as well. Kate Richard, founder 535 00:24:39,000 --> 00:24:41,920 Speaker 3: and CEO of Warwick Investment Group. It's sort of how 536 00:24:41,920 --> 00:24:43,679 Speaker 3: do you make money in the energy transition and how 537 00:24:43,680 --> 00:24:45,760 Speaker 3: that's going to wind up playing out and where the 538 00:24:45,760 --> 00:24:48,240 Speaker 3: supply shortfall is going to be. Paul, What's so interesting 539 00:24:48,280 --> 00:24:53,000 Speaker 3: as we talk about oil reduction use, particularly in developed nations, 540 00:24:53,280 --> 00:24:55,320 Speaker 3: it doesn't mean it's going to zero, and I feel 541 00:24:55,320 --> 00:24:57,520 Speaker 3: like that's a reset, a little bit like it can decline, 542 00:24:57,600 --> 00:24:59,760 Speaker 3: but we're still using it. It's not like we're going 543 00:24:59,760 --> 00:25:00,560 Speaker 3: in nothing. 544 00:25:00,480 --> 00:25:03,400 Speaker 7: Okay, I mean, it's just it's gonna be a kaleidoscopic solution. 545 00:25:03,480 --> 00:25:06,439 Speaker 3: I'm never gonna be able to say that word again. Kaleidoscopic, Tucker, 546 00:25:06,480 --> 00:25:07,800 Speaker 3: did you look it up? Did you have time? 547 00:25:07,960 --> 00:25:10,879 Speaker 1: Sounds too much like kolonoscopy. 548 00:25:11,720 --> 00:25:15,000 Speaker 3: Colona, Scott Colin, Now you're messing me up. I'm never 549 00:25:15,000 --> 00:25:18,080 Speaker 3: gonna it does not sound like kolonoscopy. 550 00:25:18,320 --> 00:25:22,200 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 551 00:25:22,280 --> 00:25:25,800 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 552 00:25:25,800 --> 00:25:28,600 Speaker 1: Otto with the Bloomberg Business app. You can also listen 553 00:25:28,720 --> 00:25:31,800 Speaker 1: live on Amazon Alexa from our flagship New York station, 554 00:25:32,200 --> 00:25:36,720 Speaker 1: Just Say Alexa playing Bloomberg eleven thirty. 555 00:25:36,680 --> 00:25:42,000 Speaker 5: Walgreens Boots disappointing results stock down twenty three percent here 556 00:25:42,359 --> 00:25:46,960 Speaker 5: fifty two week low the LOESSNS nineteen ninety seven, So 557 00:25:47,119 --> 00:25:49,560 Speaker 5: a big move there. Let's bring a Jonathan Palmery follows 558 00:25:49,600 --> 00:25:53,720 Speaker 5: all this stuff for Bloomberg Intelligence. Jonathan, what's going on 559 00:25:53,800 --> 00:25:55,479 Speaker 5: with our our friends at Walgreens Boots? 560 00:25:56,720 --> 00:25:58,959 Speaker 11: Well, I think you can see from the stock reaction 561 00:25:59,040 --> 00:26:03,040 Speaker 11: nothing good is happening these days. I mean, the CEO 562 00:26:03,359 --> 00:26:05,520 Speaker 11: came in last year and there was a little bit 563 00:26:05,520 --> 00:26:08,040 Speaker 11: of a halo effect on his hiring. I think that 564 00:26:08,080 --> 00:26:13,040 Speaker 11: halo has dissipated and investors were expecting more sooner and 565 00:26:13,119 --> 00:26:15,399 Speaker 11: it looks like, you know, this is structurally going to 566 00:26:15,440 --> 00:26:17,959 Speaker 11: be handicapped for at least another year. I mean, they 567 00:26:17,960 --> 00:26:21,119 Speaker 11: talked about seventy five cents of headwinds going into their 568 00:26:21,160 --> 00:26:24,080 Speaker 11: fiscal twenty twenty five. I mean, if you rewind a 569 00:26:24,119 --> 00:26:26,560 Speaker 11: couple years ago, before the pandemic, this was a company 570 00:26:26,560 --> 00:26:28,840 Speaker 11: that was earning six dollars a share. Now it looks 571 00:26:28,840 --> 00:26:30,320 Speaker 11: like next year it's going to be more like two 572 00:26:30,320 --> 00:26:34,520 Speaker 11: dollars a share. So investors are frustrated with waiting for 573 00:26:34,560 --> 00:26:37,040 Speaker 11: the turnaround, and it looks like it's even extended further 574 00:26:37,080 --> 00:26:37,800 Speaker 11: in the future here. 575 00:26:38,000 --> 00:26:40,080 Speaker 3: So what part of this is a Walgreen issue versus 576 00:26:40,119 --> 00:26:41,080 Speaker 3: a macro issue? 577 00:26:42,280 --> 00:26:44,320 Speaker 11: Well, a little bit of both. I mean, they were 578 00:26:44,640 --> 00:26:48,879 Speaker 11: very particular about calling out consumer weakness as one of 579 00:26:48,880 --> 00:26:52,560 Speaker 11: the drivers for the downside this year, but really it's 580 00:26:52,640 --> 00:26:55,399 Speaker 11: I think more of a structural issue in the pharmacy space. 581 00:26:55,520 --> 00:26:58,440 Speaker 11: They've been being pressured by insurers and payers for a 582 00:26:58,520 --> 00:27:01,000 Speaker 11: number of years and that doesn't to dissipate, and so 583 00:27:01,720 --> 00:27:04,960 Speaker 11: they're thinking they and others like CBS are thinking about 584 00:27:05,000 --> 00:27:08,159 Speaker 11: new models for pharmacy reimbursement. But you know, they're just 585 00:27:08,160 --> 00:27:09,840 Speaker 11: in a between a rock and a hard place here. 586 00:27:10,960 --> 00:27:14,000 Speaker 5: Jonathan, how much of this twenty three percent decline in 587 00:27:14,040 --> 00:27:18,080 Speaker 5: Walgreens is a company specific issue or more of an 588 00:27:18,080 --> 00:27:18,960 Speaker 5: industry issue. 589 00:27:19,640 --> 00:27:23,320 Speaker 11: I think it's more a company specific here versus industry wide. 590 00:27:23,320 --> 00:27:26,280 Speaker 11: I mean, CBS has been doing okay in their pharmacy. 591 00:27:26,280 --> 00:27:30,480 Speaker 11: They face the same structural challenges around reimbursement. You know 592 00:27:30,520 --> 00:27:34,199 Speaker 11: what's going on in retail here. It's just you know, 593 00:27:34,240 --> 00:27:38,200 Speaker 11: they glossed over some of those woes during the pandemic. 594 00:27:38,680 --> 00:27:41,240 Speaker 11: They had a big sales leaseback program with their stores, 595 00:27:41,280 --> 00:27:43,960 Speaker 11: which has now come to an end, and so they've 596 00:27:44,000 --> 00:27:46,520 Speaker 11: been looking for ways to grow the company. You know, 597 00:27:46,520 --> 00:27:48,399 Speaker 11: they bought Village End a couple of years ago, and 598 00:27:48,440 --> 00:27:50,200 Speaker 11: it sounds like now they don't really want to be 599 00:27:50,240 --> 00:27:54,160 Speaker 11: involved with that that asset anymore, and so they undertook 600 00:27:54,160 --> 00:27:57,360 Speaker 11: a strategic review. I think investors were anticipating that maybe 601 00:27:57,359 --> 00:28:00,919 Speaker 11: they would sell their boots assets abroad, they would maybe 602 00:28:01,080 --> 00:28:03,320 Speaker 11: do some sort of new deal with Village End and 603 00:28:03,520 --> 00:28:05,280 Speaker 11: none of that's come to pass. So the weight is 604 00:28:05,320 --> 00:28:10,320 Speaker 11: on for the turnaround and there's no real inflection point 605 00:28:10,359 --> 00:28:10,960 Speaker 11: in sight here. 606 00:28:11,680 --> 00:28:14,240 Speaker 3: Okay, So if that's the case, I mean, I'm going 607 00:28:14,320 --> 00:28:15,840 Speaker 3: to ask you how local we go, But like, what 608 00:28:16,040 --> 00:28:19,080 Speaker 3: is then a reasonable valuation for a stock like Walgreens 609 00:28:19,359 --> 00:28:22,000 Speaker 3: where we don't actually know what the trough looks like. 610 00:28:23,800 --> 00:28:25,639 Speaker 11: Yeah, I mean I think they're getting to the trough 611 00:28:25,640 --> 00:28:28,760 Speaker 11: in terms of EPs and that multiple. You know, I 612 00:28:28,760 --> 00:28:31,520 Speaker 11: think you can look back and single digit multiples don't 613 00:28:31,600 --> 00:28:34,560 Speaker 11: usually stick around for that long, particularly with where the 614 00:28:34,600 --> 00:28:36,159 Speaker 11: S and P is trading. So, you know, from a 615 00:28:36,200 --> 00:28:39,560 Speaker 11: valuation perspective and an earnings trough perspective, I think we're 616 00:28:39,560 --> 00:28:41,640 Speaker 11: close to the bottom here. You know, maybe not the 617 00:28:41,680 --> 00:28:44,520 Speaker 11: absolute bottom. There might be a little bit more to go, 618 00:28:44,560 --> 00:28:46,640 Speaker 11: but it's it's hard for me to envision given what 619 00:28:46,640 --> 00:28:50,360 Speaker 11: they're doing around these store closures, around monetizing some of 620 00:28:50,360 --> 00:28:53,600 Speaker 11: these assets that they haven't you know, kind of gotten 621 00:28:53,640 --> 00:28:58,320 Speaker 11: to the worst of their earnings power here. 622 00:29:00,280 --> 00:29:01,720 Speaker 7: All right, Jonathan, thank you so much. 623 00:29:02,080 --> 00:29:06,760 Speaker 5: We appreciate that getting the latest on the Walgreens Boots 624 00:29:06,760 --> 00:29:08,240 Speaker 5: situation stock down twenty three percent. 625 00:29:08,320 --> 00:29:09,760 Speaker 7: Jonathan Palmer, he covers. 626 00:29:09,720 --> 00:29:12,320 Speaker 5: All that healthcare stuff and all the pharmacies and all 627 00:29:12,320 --> 00:29:15,080 Speaker 5: that great stuff for Bloomberg Intelligence. Appreciate getting a couple 628 00:29:15,080 --> 00:29:16,520 Speaker 5: of minutes of his time. 629 00:29:18,160 --> 00:29:22,040 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 630 00:29:22,120 --> 00:29:25,640 Speaker 1: weekdays at ten am Eastern on Applecar Play and Android 631 00:29:25,680 --> 00:29:28,840 Speaker 1: Auto with the Bloomberg Business. You can also listen live 632 00:29:28,920 --> 00:29:32,120 Speaker 1: on Amazon Alexa from our flagship New York station, Just 633 00:29:32,160 --> 00:29:35,080 Speaker 1: say Alexa Play. Bloomberg eleven thirty. 634 00:29:36,840 --> 00:29:38,440 Speaker 5: Alex Steel and Paul Sweeney were live here in our 635 00:29:38,440 --> 00:29:41,120 Speaker 5: Bloomberg and Director Berger's studio right in midtown Manhattan. 636 00:29:41,360 --> 00:29:43,840 Speaker 7: We're also streaming live on that internet thing. I think. 637 00:29:43,840 --> 00:29:46,240 Speaker 5: You go to YouTube dot com and search Bloomberg Podcast, 638 00:29:46,280 --> 00:29:49,320 Speaker 5: and that's where you will find us. Joining us right 639 00:29:49,360 --> 00:29:53,320 Speaker 5: now is the Pride of Southwestern Virginia by way of London, England. 640 00:29:53,320 --> 00:29:57,800 Speaker 5: Tim Craik, head Global Chief Content Officer for Bloomberg Intelligence, 641 00:29:57,880 --> 00:30:02,080 Speaker 5: joining us from zoom from our global London headquarters, Queen 642 00:30:02,160 --> 00:30:05,560 Speaker 5: Victoria Street in London, extraordinary building right in the city 643 00:30:05,560 --> 00:30:07,479 Speaker 5: of London. Jim, thanks so much for joining us here. 644 00:30:07,520 --> 00:30:09,760 Speaker 5: I know you guys at BI you put out your 645 00:30:09,760 --> 00:30:12,640 Speaker 5: research here on some ten companies we need to watch 646 00:30:12,680 --> 00:30:15,800 Speaker 5: periodically throughout the year. Here, we've got one you guys 647 00:30:15,840 --> 00:30:17,560 Speaker 5: recently published about the companies. 648 00:30:17,200 --> 00:30:18,920 Speaker 7: To watch in three Q. 649 00:30:19,600 --> 00:30:21,400 Speaker 5: Give us a couple of names that we should be 650 00:30:21,520 --> 00:30:23,800 Speaker 5: really taking a look at here as we approach third 651 00:30:23,880 --> 00:30:24,760 Speaker 5: quarter earnings. 652 00:30:25,320 --> 00:30:28,200 Speaker 10: Yeah, absolutely so. I'll give you a smidge of a 653 00:30:28,240 --> 00:30:31,800 Speaker 10: backdrop on this, if that's okay to put it into context. 654 00:30:32,120 --> 00:30:34,960 Speaker 10: These are all part of what we call our focus ideas, 655 00:30:35,000 --> 00:30:37,400 Speaker 10: which is a list of companies that we have a 656 00:30:37,560 --> 00:30:41,160 Speaker 10: strong point of view on fundamentally that we think is 657 00:30:41,240 --> 00:30:44,640 Speaker 10: different from what the market currently believes, and there's catalysts 658 00:30:44,640 --> 00:30:47,680 Speaker 10: to head to hopefully turn the market towards our view. 659 00:30:48,040 --> 00:30:50,800 Speaker 10: The thing that sets these ten off is that they 660 00:30:50,800 --> 00:30:53,360 Speaker 10: all have catalysts coming up in the third quarter. A 661 00:30:53,440 --> 00:30:56,160 Speaker 10: lot the ten companies to watch for this quarter, and 662 00:30:56,840 --> 00:30:59,880 Speaker 10: I guess the first group that you have to start, 663 00:31:00,120 --> 00:31:03,880 Speaker 10: it seems like with any conversation these days is AI. 664 00:31:04,280 --> 00:31:08,000 Speaker 10: And there's certainly a couple of AI related ideas here. 665 00:31:08,120 --> 00:31:15,000 Speaker 10: Even though Nvidia is not on the list. Corning, Oh, 666 00:31:15,080 --> 00:31:21,280 Speaker 10: interesting fiber optic cable. You can't have AI going through 667 00:31:21,320 --> 00:31:23,320 Speaker 10: all of these data centers if you can't connect the 668 00:31:23,400 --> 00:31:28,440 Speaker 10: data centers together. And interestingly with fiber optic cable, there 669 00:31:28,480 --> 00:31:30,719 Speaker 10: was actually a down cycle over the course of the 670 00:31:30,760 --> 00:31:34,560 Speaker 10: past year where there was excess inventory and this, that, 671 00:31:34,560 --> 00:31:37,840 Speaker 10: and the other with some telco build related to five G. 672 00:31:38,680 --> 00:31:41,520 Speaker 10: That sort of has worked its way through, and we 673 00:31:41,600 --> 00:31:45,200 Speaker 10: expect data center build out to really drive demand for 674 00:31:45,880 --> 00:31:49,760 Speaker 10: fiber optic cables going forward allah the potential for positive surprise. 675 00:31:50,960 --> 00:31:55,280 Speaker 10: There's another one called THHK. My guess is you've never 676 00:31:55,320 --> 00:31:58,520 Speaker 10: heard of this one. It's a machinery company out of Japan, 677 00:31:59,720 --> 00:32:04,720 Speaker 10: and they have a fifty percent share in something called, 678 00:32:05,040 --> 00:32:07,480 Speaker 10: now I'm going to make sure I pronounce it correctly, 679 00:32:07,920 --> 00:32:12,200 Speaker 10: linear motion guide rails. And you're saying, what, Yeah, if 680 00:32:12,400 --> 00:32:16,080 Speaker 10: if you think about how you picture semiconductors being manufactured, 681 00:32:16,360 --> 00:32:22,120 Speaker 10: there's the equipment that buzzes across and etches these patterns 682 00:32:22,160 --> 00:32:27,320 Speaker 10: into silicon. The rails that they run on are these things, 683 00:32:27,880 --> 00:32:29,280 Speaker 10: and they have a fifty percent share. 684 00:32:29,840 --> 00:32:32,600 Speaker 3: So it's it's like the things. 685 00:32:33,440 --> 00:32:36,520 Speaker 10: Yeah, so you know these are things that you can't 686 00:32:36,560 --> 00:32:40,640 Speaker 10: do AI unless you have these things. So we're looking 687 00:32:40,720 --> 00:32:45,000 Speaker 10: for those types of opportunities you could you could draw 688 00:32:45,120 --> 00:32:48,680 Speaker 10: a little bit of a further sort of second or 689 00:32:48,720 --> 00:32:53,520 Speaker 10: third degree connection with Sandvik. This is another machinery company 690 00:32:53,560 --> 00:32:59,360 Speaker 10: based in Scandinavia. Fifty percent of their business is mining related. 691 00:32:59,360 --> 00:33:02,840 Speaker 10: And you're saying, what, Well, the current hot topics these 692 00:33:02,920 --> 00:33:07,800 Speaker 10: days in mining, among others is copper, and we're seeing 693 00:33:07,840 --> 00:33:13,520 Speaker 10: a capex cycle in copper. You can't dig and mine 694 00:33:13,640 --> 00:33:19,320 Speaker 10: copper without Sandi's stuff. So it's another adjunct play on AI. 695 00:33:19,680 --> 00:33:21,360 Speaker 10: So those are a couple of things. 696 00:33:21,920 --> 00:33:22,480 Speaker 7: I like this. 697 00:33:23,040 --> 00:33:24,680 Speaker 5: I mean that that's I like the way you guys 698 00:33:24,680 --> 00:33:26,320 Speaker 5: are thinking about this, you know, kind of by the 699 00:33:26,800 --> 00:33:28,920 Speaker 5: you know, kind of the tools of AI as supposed 700 00:33:28,960 --> 00:33:30,840 Speaker 5: to be, you know, kind of the direct plays here. 701 00:33:31,400 --> 00:33:33,040 Speaker 7: Another one is I think about. 702 00:33:32,840 --> 00:33:36,080 Speaker 5: The Olympics in Paris this summer, and I think it's 703 00:33:36,080 --> 00:33:39,840 Speaker 5: gonna be just just a monster, monster event fingers crossed 704 00:33:39,880 --> 00:33:43,120 Speaker 5: everything goes well, But that's good for all the companies 705 00:33:43,160 --> 00:33:45,480 Speaker 5: associated with the Olympics. You've got one here, Nike. 706 00:33:45,800 --> 00:33:46,520 Speaker 7: Talk to us about that. 707 00:33:47,480 --> 00:33:50,080 Speaker 10: Yeah, So Nike is interesting on a couple of fronts. 708 00:33:50,080 --> 00:33:53,520 Speaker 10: You've got not only the Olympics coming up, but if 709 00:33:53,520 --> 00:33:57,920 Speaker 10: you're at all into what they call football. Here in 710 00:33:57,920 --> 00:34:02,720 Speaker 10: London we would call soccer. Obviously, the Euros are going 711 00:34:02,760 --> 00:34:05,280 Speaker 10: on right now, which is a massive England Still in 712 00:34:05,480 --> 00:34:10,560 Speaker 10: Euros they are, but they drew two of their first 713 00:34:10,600 --> 00:34:12,799 Speaker 10: three matches, so you know they make it into the 714 00:34:12,840 --> 00:34:17,600 Speaker 10: second round, but we'll see. But Nike not only has 715 00:34:17,640 --> 00:34:21,319 Speaker 10: that to look forward to, but more importantly, they've got 716 00:34:21,400 --> 00:34:25,600 Speaker 10: new product that's going to be displayed there and promoted 717 00:34:25,640 --> 00:34:29,880 Speaker 10: there with all the advertisement and visibility that happens running 718 00:34:29,880 --> 00:34:33,000 Speaker 10: shoes like the new pegasusts. There's other products as well. 719 00:34:33,320 --> 00:34:37,920 Speaker 10: They've lacked two They've lagged for two years in innovation 720 00:34:38,120 --> 00:34:41,240 Speaker 10: and Puma and Adidas have taken share. You might remember 721 00:34:41,280 --> 00:34:43,520 Speaker 10: we've talked about Adidas before where we had a focus 722 00:34:43,640 --> 00:34:47,360 Speaker 10: idea that Puna mcgoyle was behind. She since closed that 723 00:34:47,600 --> 00:34:51,200 Speaker 10: shifted gears towards Nike because she sees market share recovery 724 00:34:51,280 --> 00:34:54,000 Speaker 10: with Nike because they finally got on board with some 725 00:34:54,080 --> 00:34:59,560 Speaker 10: new innovation. So interesting story there, And I would say similarly, 726 00:35:00,840 --> 00:35:03,600 Speaker 10: you could kind of throw into the same bucket. Galaxy, 727 00:35:03,760 --> 00:35:06,520 Speaker 10: which is one of the big casino operators in Macau 728 00:35:07,040 --> 00:35:11,239 Speaker 10: who think about innovation and new product. They opened a 729 00:35:11,280 --> 00:35:17,919 Speaker 10: big new phase of their Co Tai based resort and 730 00:35:18,600 --> 00:35:21,440 Speaker 10: they're starting to gain market share and summer is the 731 00:35:21,480 --> 00:35:25,080 Speaker 10: big season for travel China. Travel is back up, and 732 00:35:25,160 --> 00:35:28,399 Speaker 10: there's a big story there that again revolves around new 733 00:35:28,440 --> 00:35:31,080 Speaker 10: product innovation, right time, right place. 734 00:35:31,719 --> 00:35:33,759 Speaker 3: So what do you also have on the list? Which 735 00:35:33,760 --> 00:35:35,680 Speaker 3: is interesting is our age? 736 00:35:35,760 --> 00:35:37,880 Speaker 2: This is restoration hardware? Is that what this is? 737 00:35:38,640 --> 00:35:38,839 Speaker 1: Yes? 738 00:35:39,200 --> 00:35:42,239 Speaker 3: Okay, because the corner wasn't that good, right, and like 739 00:35:42,840 --> 00:35:45,279 Speaker 3: their stuff is so expensive, but in a downturn that 740 00:35:45,360 --> 00:35:47,640 Speaker 3: feels a little hard to swallow. 741 00:35:47,320 --> 00:35:49,359 Speaker 7: A lot discount. You can't get a sale. 742 00:35:49,360 --> 00:35:53,000 Speaker 3: Okay, even the outlets store at Industry City, which is 743 00:35:53,000 --> 00:35:55,520 Speaker 3: they've outlet stores in Brooklyn, and stuff is just insanely 744 00:35:55,560 --> 00:35:58,719 Speaker 3: expensive for something that's super boring. I've purchased some of 745 00:35:58,760 --> 00:36:01,480 Speaker 3: their stuff, sure, but you get something for good quality 746 00:36:01,480 --> 00:36:03,200 Speaker 3: that's not going to be like eight grand for like 747 00:36:03,239 --> 00:36:04,279 Speaker 3: a table. I don't know. 748 00:36:05,280 --> 00:36:10,400 Speaker 10: Well, so you're playing, you're playing into the idea here, 749 00:36:10,600 --> 00:36:13,240 Speaker 10: Alex and I am going to date myself. I remember 750 00:36:13,280 --> 00:36:16,920 Speaker 10: being an equity research salesperson back at Goldman on the 751 00:36:17,000 --> 00:36:19,239 Speaker 10: date and we were doing the I p O for 752 00:36:19,640 --> 00:36:22,680 Speaker 10: restoration hardware. I remember traveling around with management but that's 753 00:36:22,719 --> 00:36:29,640 Speaker 10: another story. RH is one of our cautious ideas, along 754 00:36:29,719 --> 00:36:32,839 Speaker 10: with HCA, the big US hospital company, as well as 755 00:36:32,920 --> 00:36:38,560 Speaker 10: Nintendo the gaming software electronics company. We do have negative 756 00:36:38,600 --> 00:36:41,000 Speaker 10: focus ideas as well as positive focus ideas. And the 757 00:36:41,040 --> 00:36:45,319 Speaker 10: thing with r H management guidance and still consensus is 758 00:36:45,360 --> 00:36:49,480 Speaker 10: guiding for recovery from what you're just talking about. But now, 759 00:36:49,520 --> 00:36:56,879 Speaker 10: withstanding the resilient US consumer, we still expect the recovery 760 00:36:57,040 --> 00:37:02,000 Speaker 10: that's anticipated disappoint you know, French sales last year. We're disappointing, 761 00:37:02,320 --> 00:37:05,960 Speaker 10: notwithstanding the consumer, and we think a recovery is going 762 00:37:06,040 --> 00:37:09,160 Speaker 10: to be delayed and expectations are going to be cut again. 763 00:37:10,800 --> 00:37:12,239 Speaker 10: So that's that one. 764 00:37:12,640 --> 00:37:15,719 Speaker 7: That's cautious side, right, Yeah, Okay. 765 00:37:15,320 --> 00:37:20,080 Speaker 10: Yes, indeed I would throw out similarly in terms of 766 00:37:20,560 --> 00:37:26,560 Speaker 10: we think overly optimistic expectations. And Nintendo obviously totally different story, 767 00:37:26,560 --> 00:37:29,600 Speaker 10: but we all know game Boy and Switch and things 768 00:37:29,719 --> 00:37:32,480 Speaker 10: like that. Boy yeah yeah, going back in the day. 769 00:37:33,160 --> 00:37:35,960 Speaker 10: But you know their their current console is the Switch 770 00:37:36,000 --> 00:37:39,000 Speaker 10: and there is a new console coming out called Switch too. 771 00:37:39,360 --> 00:37:42,600 Speaker 10: And Paul, you know from your background these console stories 772 00:37:42,640 --> 00:37:46,080 Speaker 10: are big deals, whether it be for Nintendo or Microsoft 773 00:37:46,200 --> 00:37:49,040 Speaker 10: or what have you. This one is sort of like 774 00:37:49,120 --> 00:37:56,399 Speaker 10: waiting for good o. They we thought we we we've 775 00:37:56,400 --> 00:37:58,840 Speaker 10: been thinking they were going to announce a date, but 776 00:37:59,000 --> 00:38:02,080 Speaker 10: it still is to come, and we think it causes 777 00:38:02,160 --> 00:38:05,480 Speaker 10: room for disappointment relative to work and census expectations are 778 00:38:05,560 --> 00:38:06,200 Speaker 10: still setting. 779 00:38:07,040 --> 00:38:08,600 Speaker 7: All right, very good as always. 780 00:38:08,760 --> 00:38:11,360 Speaker 5: You know, so Tim's an American, but he has adapted 781 00:38:11,400 --> 00:38:13,640 Speaker 5: to this whole English bank holiday thing. 782 00:38:14,200 --> 00:38:17,359 Speaker 7: You know, they have a lot of bank holidays in England. 783 00:38:17,120 --> 00:38:20,120 Speaker 5: So they get the days off for seemingly no reason, 784 00:38:20,200 --> 00:38:23,400 Speaker 5: and then the whole month of August forget about it. 785 00:38:23,480 --> 00:38:23,680 Speaker 7: Yeah. 786 00:38:23,719 --> 00:38:27,080 Speaker 5: So again Tim's a good boy from southwestern Virginia, but 787 00:38:27,120 --> 00:38:29,640 Speaker 5: he's all in on this whole European vacation thing. 788 00:38:29,719 --> 00:38:31,120 Speaker 7: Tim Craighead, thanks for joining us. 789 00:38:31,480 --> 00:38:35,040 Speaker 5: Tim Craighead, Global Chief Content Officer, Bloomberg Intelligence, joining us 790 00:38:35,040 --> 00:38:38,400 Speaker 5: from our Queen Victoria Street offices in London. 791 00:38:38,480 --> 00:38:39,040 Speaker 7: So good stuff. 792 00:38:39,040 --> 00:38:41,600 Speaker 5: There's some good ideas coming out of BI kind of 793 00:38:41,640 --> 00:38:45,200 Speaker 5: geared around maybe where they think the street isn't in 794 00:38:45,280 --> 00:38:46,560 Speaker 5: terms of viewing some of these names. 795 00:38:46,640 --> 00:38:49,160 Speaker 3: So my daughter wants a Nintendo switch, Like do we 796 00:38:49,360 --> 00:38:52,239 Speaker 3: like this? Like I know we don't like this, right, 797 00:38:52,920 --> 00:38:54,080 Speaker 3: I stay away. 798 00:38:53,880 --> 00:38:57,719 Speaker 7: From video right as as long as you can. Yeah, 799 00:38:57,760 --> 00:38:59,600 Speaker 7: we did it as long as we could, but we 800 00:39:00,160 --> 00:39:01,000 Speaker 7: we kind of caved. 801 00:39:01,120 --> 00:39:02,040 Speaker 2: You did caave. 802 00:39:02,360 --> 00:39:06,040 Speaker 5: Although that's good now because my to I get two 803 00:39:06,080 --> 00:39:10,040 Speaker 5: boys who communicate primarily via the games and playing games together, 804 00:39:10,160 --> 00:39:13,120 Speaker 5: and so yeah, I talked to them, my brother Jordan yesday, 805 00:39:13,160 --> 00:39:14,080 Speaker 5: We're playing games for an. 806 00:39:13,960 --> 00:39:16,480 Speaker 3: Hour, and I was like, okay, so that kind of counts. 807 00:39:16,560 --> 00:39:18,080 Speaker 7: Yeah, I'll give it a little bit of there soon. 808 00:39:18,280 --> 00:39:19,320 Speaker 7: Now it is stressful. 809 00:39:19,719 --> 00:39:24,239 Speaker 1: This is the Bloomberg Intelligence podcast, available on apples, Spotify, 810 00:39:24,440 --> 00:39:27,360 Speaker 1: and anywhere else you will get your podcasts. 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