Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. We got a lot
Speaker 1: of ECO data today and um, you know, it's kind
Speaker 1: of calls into question that, you know, the strength of
Speaker 1: the consumer a little bit, the concerns about inflation out
Speaker 1: there and how that's going to impact, uh, this economy,
Speaker 1: particularly in the first half of this year. Let's bring
Speaker 1: in David Riley. He's the chief investment strategist for Blue
Speaker 1: Bay Asset Management. David, thanks so much for joining us here. Again,
Speaker 1: we got some of those uh that ECHO data today
Speaker 1: particularly relates to retail sales really weaker than expected. How
Speaker 1: did you take that data? Does that impact kind of
Speaker 1: your view of how this economy and these markets will
Speaker 1: perform in two No, I don't think a single month
Speaker 1: retail sales and number is really going to kind of
Speaker 1: alter that view in the way that we're constructing portfolios
Speaker 1: but you know, you're absolutely right. I mean that the
Speaker 1: retailer sales number was very, very ugly, and I think
Speaker 1: it is a you know, would be a source of
Speaker 1: concern if we saw you know, more prints like that
Speaker 1: and evidence that you know, hrror inflation. Um. You know,
Speaker 1: concerns around the outlook was starting to have an impact
Speaker 1: on confidence about the consumer. But one of the things
Speaker 1: for this year, remember is that you know, it was
Speaker 1: all about demand for goods. It was all about demand
Speaker 1: for stuff that you delivered in a bolt and tangibles. Um.
Speaker 1: And you know, we've seen that with retail sales been
Speaker 1: well above their pre pandemic trend. So I mean, I
Speaker 1: have been expecting that we'll see some rotation out of
Speaker 1: goods demand, out of retail sales into services. I'm not
Speaker 1: saying that's why we had this particul the week number
Speaker 1: just reported, but you know, that's kind of one of
Speaker 1: the trends which I think is going to be a
Speaker 1: feature through two. And then that has implications as to
Speaker 1: how you're you know, you're you're you're looking in terms
Speaker 1: of your your credit picking as well. How does omicron
Speaker 1: play into this, because um, I can understand that the thesis.
Speaker 1: We bought all the goods we possibly could in the
Speaker 1: first year and a half of the pandemic, and now
Speaker 1: we want to get um some experiences. Me and Paul,
Speaker 1: for example, want to take a cruise, but UM, we're
Speaker 1: not going to obviously as the infection rates sores like this.
Speaker 1: So how does that play in. Well, it's clearly going
Speaker 1: to have a negative impact in the near term in
Speaker 1: terms of UM spending and clearly going to continue away
Speaker 1: on things like leisure, on hospitality. But the experience in
Speaker 1: South Africa, the experience you know, from the UK, the
Speaker 1: experience from London where I'm calling from today, UM, is
Speaker 1: that you get this very dramatic rising cases, but then
Speaker 1: it actually comes off pretty relatively quickly as as well.
Speaker 1: And I think, you know, thankfully arm acron does seem
Speaker 1: to be much less dangerous from a health perspective, and
Speaker 1: so I actually think that arm acron will will you know,
Speaker 1: kind of mark the transition, if you like, for COVID
Speaker 1: from from being a pandemic to becoming endemics. So we
Speaker 1: kind of learned to live with it and we get
Speaker 1: on with our lives. So given that backdrop, David, what
Speaker 1: are the conversations you're having with your clients now as
Speaker 1: it relates to kind of that really opportunities might be
Speaker 1: here in Yeah, I mean, you know, when thinking about
Speaker 1: in constructing our fixed income and credit portfolios, try and
Speaker 1: kind of keep it pretty simple. I mean, I think
Speaker 1: we're in a rising rate environment. I do think the
Speaker 1: economy is doing reasonably well and default risk is very low,
Speaker 1: so that makes it, you know, keep it simple. Basically,
Speaker 1: you favor credit over interest rate with and there's a
Speaker 1: lot of opportunities in UM credit and particularly floating rate
Speaker 1: UM credit. There's some you know, one and a half
Speaker 1: trillion dollars worth on some estimates of clos leverage loans,
Speaker 1: you know, mbs, another kind of securitized credit. So I
Speaker 1: do actually think, you know, it makes sense to increase
Speaker 1: your exposure to floating rate instruments and particularly to floating
Speaker 1: rate credit. You can pick up you know, quite a
Speaker 1: decent carry um you know, sort of three fifty basis
Speaker 1: points over for a trip will be rated um cello trance.
Speaker 1: So there's certainly one of the things that we've been
Speaker 1: reflecting in some of our credit portfolios. And then also
Speaker 1: look at some of those sectors which we think will
Speaker 1: benefit from um, you know, higher rates. So again financials
Speaker 1: European subordinated there, we think there's still some value to
Speaker 1: be had there. I think the one area where still
Speaker 1: pretty cautious on but I think could be interesting in
Speaker 1: the latter part of the year would actually be a
Speaker 1: merging market assets. You know that's meaningfully underperformed last year,
Speaker 1: so there's a lot of whis premium bill into emerging
Speaker 1: market assets. Hey, David, thanks so much for joining us.
Speaker 1: We appreciate chatting with you, getting your thoughts here on
Speaker 1: these markets, on the eco data we had today. David Riley,
Speaker 1: chief investment Strategists for Blue Bay Asset Management. Let's go
Speaker 1: right now to J. J. Kinahan. Yeah, should we directly sure?
Speaker 1: I mean this is our American bank of the day
Speaker 1: chief market strategists. Well, I feel they're American because of
Speaker 1: the name, but I know the t D stands for
Speaker 1: Toronto Dominion. Yeah, um, and J. J. Kinahan joins us
Speaker 1: right now to talk about what's going on in UH
Speaker 1: in the market of I guess what's your main client,
Speaker 1: j J? Well, I mean client. Well, first of all,
Speaker 1: you hit it on the head and thanks for havingy guys,
Speaker 1: and then it is an American company and Lyarics you
Speaker 1: owned by Charles up now. But uh, yes, So you know,
Speaker 1: if you say, what's our average client, I would say,
Speaker 1: you know, what's what's the main street American in terms
Speaker 1: of the fact that, uh, it's just average people. And
Speaker 1: I would say the biggest thing about our client based
Speaker 1: over the last couple of years is, I think with
Speaker 1: the entire industry is our client base has gotten younger
Speaker 1: over the last two years. So I think that's probably
Speaker 1: the best thing. If you want to say what's the
Speaker 1: great effect of COVID, The great effect of COVID is
Speaker 1: more people to get interest in the market than ever.
Speaker 1: What do you think that that is good? And what
Speaker 1: are they asking you now? J J. We're going into
Speaker 1: year three this pandemic, the economic disruption has been historical.
Speaker 1: What are they asking you now? Well, I think the
Speaker 1: biggest question for our clients is really the biggest question
Speaker 1: for the market, right, that's what is going to happen
Speaker 1: with interest rates? As we know, Um, you know, the
Speaker 1: the COVID variants kind of come and go if you will,
Speaker 1: in shorter terms. But I think everybody trying to figure
Speaker 1: out what's going to happen in interest rates overall is
Speaker 1: the thing that's truly driving the markets. And you know,
Speaker 1: some clients this morning are saying, well, hold on. JP
Speaker 1: Morgan had record a record year. Yes, a bad quarter,
Speaker 1: but a record year. We expect earnings to be uh
Speaker 1: or interest rates to go higher throughout the year. Yet
Speaker 1: JP Morgan getting you know, kind of slapped today. So
Speaker 1: I think that things like that are a little bit confusing.
Speaker 1: If the market is supposed to be forward looking, how
Speaker 1: is it that JP Morgan is you know, eight percent
Speaker 1: lower as we speak, So it's uh. You know, these
Speaker 1: kind of conundrums I think are very difficult for people
Speaker 1: to sort of get their arms around. Um. You know,
Speaker 1: I think it's really interesting the point you make about
Speaker 1: the how do you say this, the the youthening of
Speaker 1: your clients. I mean, I wonder how long it's been
Speaker 1: since that generation was interested. And it bodes well for
Speaker 1: the future of markets, right because al um, the kids
Speaker 1: are in it to win it for the next few decades. UM.
Speaker 1: The previous generation or the one before that, probably didn't
Speaker 1: get involved until they were thirties, in their thirties or
Speaker 1: in their forties, UM, and then they had to had
Speaker 1: to give way too much gas and risk missing a curve.
Speaker 1: But these kids are probably gonna set themselves up well
Speaker 1: for the future. Absolutely, And you want to know, the
Speaker 1: biggest thing I love is that our use of our education,
Speaker 1: you know, we we build a lot of our business
Speaker 1: on education has gone up in almost direct correlation, and
Speaker 1: actually as trading as you guys know, reporting on it
Speaker 1: every day has softened a bit from its peak obviously.
Speaker 1: Uh you know, in in the spring of last year,
Speaker 1: our education numbers haven't come down as much in their correlation.
Speaker 1: So I think what you're really starting to see is
Speaker 1: people who not only are involved for the first time,
Speaker 1: but as you said, you know, in it to win it,
Speaker 1: in it for the longer term, and trying to figure
Speaker 1: out what everything means. You know, how do I use
Speaker 1: how do I use technical patterns for finding out the
Speaker 1: value of stocks going forward? How do I use options
Speaker 1: in a smart way in my portfolio? So I think
Speaker 1: that that's really been the best friend we've seen, all right,
Speaker 1: j J. Thank you so much for joining us. We're
Speaker 1: gonna have you back on again soon. J. J. Kinahan,
Speaker 1: chief market strategist for t D Ameritor Trade, giving us
Speaker 1: his thoughts on these markets Bloomberg Markets Today. It's brought
Speaker 1: to you by Commonwealth, supporting more than two thousand independent
Speaker 1: financial advisors with the solutions they need to grow with
Speaker 1: thriving business. Commonwealth go where you grow. Visit Commonwealth dot
Speaker 1: com to learn more. Well, Matt, I recently sold my
Speaker 1: house and like the day or two after we actually
Speaker 1: came to an agreement, that buyer said, can I come
Speaker 1: in with my entertainment consultant because they wanted to do
Speaker 1: a wireless audio, video, security, the whole thing. And apparently
Speaker 1: they had a consultant do that for them. So, you know,
Speaker 1: I had cable TV. I thought I was, okay, let's
Speaker 1: check in with that business, because that is a big business.
Speaker 1: Bretton Ware, CEO, president chairman of Summit Wireless Technologies. Brett,
Speaker 1: what are people doing to their homes now in terms
Speaker 1: of home entertainment? It's not just a big screen and
Speaker 1: a cable box, is it? Not at all? It's pretty fascinating. Actually,
Speaker 1: if you look at just the consumer trends over the
Speaker 1: last ten years, it was big screen right then higher
Speaker 1: resolution to K four K, eight K, and at this
Speaker 1: point you're able to for a couple of grand by
Speaker 1: a seventy seven inch TV, right, that looks spectacular. So
Speaker 1: the trend you see now is how do you move
Speaker 1: audio into around that TV? And how hard is it?
Speaker 1: And how expensive is it? And and how quickly can
Speaker 1: you set it up? And do you need that consultant? Right?
Speaker 1: That consultant going to be several thousand dollars. Yeah, it
Speaker 1: all seems so confusing, and I wonder how how do
Speaker 1: you compete in a world where you know, Um, Apple,
Speaker 1: Google offer their products which admittedly are low quality sound,
Speaker 1: but you can get a little better performance out of
Speaker 1: something like so Nos and it's just super easy to operate.
Speaker 1: What are you pitching to a different field here? I mean,
Speaker 1: what are we talking about? Actually we're not in a
Speaker 1: lot of ways. Now, there is one difference. If you
Speaker 1: want to stream music around your house, I mean, so Nos, Apple, Um, Amazon,
Speaker 1: all those WiFi speakers can do that. But if you
Speaker 1: want to create that immersive audio experience, not simulated, but
Speaker 1: really have it, then our technology with the White Association
Speaker 1: actually gives the consumer a very simple way to do that.
Speaker 1: And if you think of the beauty of the sound
Speaker 1: bar is two things. It's is a lot better than
Speaker 1: your TV and You just gotta plug it into the
Speaker 1: wall and plug it into the HDMI port. Right when
Speaker 1: you look at the wiser technology that we market the
Speaker 1: same thing, you can get a complete immersive home theater system.
Speaker 1: And it's the same two step up steps right, you
Speaker 1: plug it. You plug a transmitter into the TV, and
Speaker 1: you plug your speakers into a wall outlet. You don't
Speaker 1: need to consultant, you don't need an installer. You don't
Speaker 1: have to pull wires through the wall or through the
Speaker 1: attic or under the house. It's all wireless, and so
Speaker 1: our specialty is making sure up to eight speakers are
Speaker 1: all synchronized with together and with that video. That video
Speaker 1: now is great. These smart TVs are great, and there's
Speaker 1: so much content being streamed. Yet it all gets shoved
Speaker 1: into TV speakers or little sound bars. So, by the way,
Speaker 1: is the Wireless Speaker and Audio Association. I get us
Speaker 1: and UM So you guys make some high end products
Speaker 1: like uh um d a C board or you make
Speaker 1: a thirty watt amp. It looks like I'm going through
Speaker 1: your website and looking at this stuff, but you put
Speaker 1: this into what partner products for consumer? Yeah, exactly. So
Speaker 1: we make the wireless chip and modules that transmits to
Speaker 1: all the speakers. But when you look at speakers, you
Speaker 1: can buy a five point one system for seven from
Speaker 1: Platin Audio, or you can buy a eight dollars stereo
Speaker 1: system from Banging Olson and every price point in between.
Speaker 1: So the consumer chooses a price point, but WHISA enables
Speaker 1: the simplicity is set up and that spectacularly immersive sound.
Speaker 1: Now the Bail Lab stuff. Oh and you know what
Speaker 1: I was gonna say. When I was a kid, the
Speaker 1: pinnacle was you got like a CLIPS reference system hooked
Speaker 1: up to a nice pre amp and an amplifier. You guys,
Speaker 1: you can work with Clips as well. We do. They've
Speaker 1: they've got a speaker's designed with our products in them.
Speaker 1: But you just don't need that preamp anymore. You don't
Speaker 1: need that a V receiver you plug a little um wise.
Speaker 1: It does sell one product itself, which is a universal transmitter.
Speaker 1: It won the c E S Audio Peripheral Product of
Speaker 1: top product, right, which is great. But you just plug
Speaker 1: that little transmitter into your HDU my port on the
Speaker 1: TV and it'll connect to every wise of speaker in
Speaker 1: that room. All right, Brett fascinating stuff. And then Matt
Speaker 1: was taking notes because he's about to move into the
Speaker 1: compound in Westchester. Brett Moyer CEO, President Chairman of Summit
Speaker 1: Wireless Technologies. That's a public trading company. W I s A.
Speaker 1: We have uh an interview I'm excited about right now
Speaker 1: with Erica Brinker. She is the chief Marketing Officer and
Speaker 1: head of e s G at Array, sorry, chief commercial officer.
Speaker 1: She was the CMO at Honeywell. Um, she's the c
Speaker 1: c O, I guess at A Ray Technology, and UM,
Speaker 1: this is quite cool because they installed trackers that tilt
Speaker 1: solar panels throughout the day in order to maximize energy
Speaker 1: output as we're all looking to do something to reduce
Speaker 1: our carbon footprint. Even me really well, you know I
Speaker 1: want I want a Mustang g T five HUD, but
Speaker 1: I also want an electric car and I'd love to
Speaker 1: power that with solar. So not to feel as guilty
Speaker 1: about it. Let's bring her an. Erica Brinker joins us. Now, UM,
Speaker 1: talk to us Erica first of all about what you're
Speaker 1: doing at A Ray Technology and how customers can get
Speaker 1: hold of your products. Yeah. Absolutely, A Ray Technologies has
Speaker 1: been around for thirty years, which in the solar universe
Speaker 1: is quite a long time Our founder wrong Coreo was
Speaker 1: a real trailblazer in the area of solar and so,
Speaker 1: as you mentioned, UM, I was impressed with your knowledge. Yes,
Speaker 1: we're a tracker UH manufacturer and technology company. There's also
Speaker 1: a software component that helps track and measure how much
Speaker 1: productivity is coming through the modules and we we basically
Speaker 1: are helping UH utility scale inner solar customers or they're
Speaker 1: those asset owners along term massive owners get the most
Speaker 1: out of their solar site. So in terms of like
Speaker 1: who our target market is, UM we love to hear
Speaker 1: that people are doing residential solar, but that's that's not
Speaker 1: what we do. We're doing utility scale solar. So when
Speaker 1: you think about your major utility companies that are diversifying
Speaker 1: their portfolio into more renewables, that's who our customers are.
Speaker 1: So Eric could give us a sense of kind of
Speaker 1: where the energy industry large is here in the United
Speaker 1: States in terms of solar. So when you talk to
Speaker 1: those commercial customers of yours, what percentage of there you
Speaker 1: know energy is solar versus maybe some traditional sources. Solar
Speaker 1: is still very fledgling, right, We know that the US
Speaker 1: market in particular UM the Biden administration has announced their
Speaker 1: intent to reach solar by UM. This is you know,
Speaker 1: a huge commitment since that that sits well below ten
Speaker 1: percent at this point. So what you really need is
Speaker 1: this massive investment and utility scale solar. And when you
Speaker 1: think about solar versus hydrogen or nuclear or wind UM,
Speaker 1: we are the quickest to come online from the time
Speaker 1: that you start a solar site, and we are the
Speaker 1: most um i'd say, least disrupted. So the sun is
Speaker 1: always shining in the in the site UM where we
Speaker 1: are are putting them. You don't have a lot of
Speaker 1: especially with our product which is you know, largely sourced
Speaker 1: in the US. UM, you have a lot of productivity
Speaker 1: and rely ability of the products. So in terms of
Speaker 1: utility companies looking to diversify solar is kind of what
Speaker 1: I would call a safer bet for them to diversify
Speaker 1: beyond fossil fuels. What happened Erica to the stock in May.
Speaker 1: I'll look at the chart and I see, you know,
Speaker 1: May eleven, May twelve, all of a sudden, there's like
Speaker 1: a tent drop UM And you had such a fantastic
Speaker 1: first few hundred days of trading after the I P
Speaker 1: O Yeah, so I think there's a couple of things
Speaker 1: UM at work here. Currently. We have some headwinds, right,
Speaker 1: you have this commodity UH challenge with UH steel and aluminum,
Speaker 1: and so there's a lot of volatility, particularly in the US,
Speaker 1: around around those two materials. And then you we have
Speaker 1: continued logistics challenges. And so what we're doing for our
Speaker 1: customers so that we can hold price for them is
Speaker 1: we've completely changed our quoting process so that we are
Speaker 1: less vulnerable and our customers are less vulnerable to UM
Speaker 1: those swings and commodities. And in the logistics challenges, we've
Speaker 1: also diversified our supply chains so that we are making
Speaker 1: our trackers closer to where they're delivering. And so that's
Speaker 1: really helped us UM create more stabilities in the pricing
Speaker 1: models for our customers. UM. You know, all that said,
Speaker 1: with all of these fluctuations and with steel and aluminum
Speaker 1: being more expensive than they were, say even when we
Speaker 1: I POT a year and a half ago, UM, we
Speaker 1: are not seeing any demands slow down for solar and
Speaker 1: in fact, you know, we were delivered a little bit
Speaker 1: of a blow. It's filled back better, not passing yet UM.
Speaker 1: But again we don't hear from any of our customers
Speaker 1: that they're not building their sites because they're waiting for
Speaker 1: this bill. There's just a huge demand for solar and
Speaker 1: we have our biggest book of business this year than
Speaker 1: we've had in our history. So des quite these challenges
Speaker 1: in the market, I think you're gonna see Solar make
Speaker 1: a really big comeback. Actually, I wanted to ask it
Speaker 1: also about your career path, because I think it's interesting
Speaker 1: for a lot of people who you know, have one
Speaker 1: act and then think about E. S. G. And their
Speaker 1: impact on the planet and want to have act too.
Speaker 1: How do they make that change? Uh? Coming from Honeywell
Speaker 1: makes perfect sense at Array, But before that you had
Speaker 1: um leadership roles at Ralph Lauren, at Tiffany at Kate Spade,
Speaker 1: which is an entirely different industry if I'm not mistaken.
Speaker 1: So how did you make that jump? What what pushed
Speaker 1: you and how did you do it? First of all,
Speaker 1: I'm impressed with the homework that you did. Um. Most
Speaker 1: people don't go that far back to find out what
Speaker 1: I was doing before. Um. Yeah, I mean I think
Speaker 1: there's a little bit of as you get further in
Speaker 1: your career, you want to do things that give you
Speaker 1: a sense of fulfillment. And certainly, Honeywell opened my eyes
Speaker 1: to what's possible when you make great technology, life changing technology,
Speaker 1: and so um, when I made the step over to Array,
Speaker 1: it was something was very personal to me. Um. I
Speaker 1: have young children. I want them to grow up at
Speaker 1: a place that is impacted by global warming and climate
Speaker 1: change and doing something that's good for the world. So uh,
Speaker 1: we say, doing well as a company while also doing good.
Speaker 1: That's something that was really attractive to me. And so um,
Speaker 1: the E S G component of my job is something
Speaker 1: that it's been a learning experience understanding how much it's
Speaker 1: being embraced by the investment community, but also something that's
Speaker 1: just extremely personally fulfilling for me. I mean, I think
Speaker 1: that's the case for a lot of people right now, Erica.
Speaker 1: I think there are people out there who say, like,
Speaker 1: all right, Ralph Lauren makes awesome clothes. I love the design,
Speaker 1: but I want to do something for the world. I
Speaker 1: want to do something that means something to humanity. How
Speaker 1: do you make that leap? How do you convince David
Speaker 1: Cody to take you on? Well, you know, when you're
Speaker 1: when you talk about a function, if you're a finance person,
Speaker 1: if you're a marketing person like I was when I
Speaker 1: first started out, I think in all of our crafts
Speaker 1: and for what you do as well, um as a
Speaker 1: communicate or it is the skill set, temper cent is
Speaker 1: learning the product, and so if you can demonstrate expertise
Speaker 1: in your craft, I think that if you're talented and
Speaker 1: the right cultural fit, you can apply that in any industry. Uh,
Speaker 1: it's just helping, um that next play picture you there,
Speaker 1: and so it might take a little bit of work
Speaker 1: or maybe you have to do something a bit extra um.
Speaker 1: But I joined Honeywell in their aerospace business and they
Speaker 1: were a bit surprised to know that I was listed too,
Speaker 1: but ended up being it ended up being they wanted
Speaker 1: someone from outside the industry and I wanted to get
Speaker 1: into the industry, So it just worked out. Eric, thank
Speaker 1: you so much for joining us. Really good stuff. Erica
Speaker 1: brinker Head b S g Ray Technology Chief Commercial Officer.
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
Speaker 1: subscribe and listen to interviews with Apple Podcasts or whatever
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
Speaker 1: at Matt Miller three at on full Sweeney. I'm on
Speaker 1: Twitter at p T Sweeney Before the podcast. You can
Speaker 1: always catch us worldwide at Bloomberg Radio