1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,560 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,479 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:21,560 Speaker 1: at Bloomberg dot com slash podcast. Now, I want to 7 00:00:21,640 --> 00:00:26,320 Speaker 1: go to Chipotle for lunch after this program, and I 8 00:00:26,400 --> 00:00:28,479 Speaker 1: don't know if I should go there or if I 9 00:00:28,520 --> 00:00:32,199 Speaker 1: should order it online. This is a conundrum that I've 10 00:00:32,200 --> 00:00:36,840 Speaker 1: started having post pandemic, because so many businesses have migrated 11 00:00:36,880 --> 00:00:39,919 Speaker 1: to digital so well, and delivery is so fast and 12 00:00:39,920 --> 00:00:43,760 Speaker 1: efficient now and uh, one of the biggest success stories, 13 00:00:43,800 --> 00:00:46,320 Speaker 1: at least on the stock market has been Chipotle, Chipotle, 14 00:00:46,440 --> 00:00:52,040 Speaker 1: Mexican Grill, Tickard, cmg UM absolutely soaring since releasing second 15 00:00:52,120 --> 00:00:55,160 Speaker 1: quarter earnings on Tuesday. Stock now at what an all 16 00:00:55,200 --> 00:00:58,280 Speaker 1: time high? At least if these two weekends all time high? Alright, 17 00:00:58,360 --> 00:01:01,960 Speaker 1: let's bring in the see the CFO. Jack Hartongue joins 18 00:01:02,080 --> 00:01:05,720 Speaker 1: us UM right now, chief financial officer forced to put Chipotle, Jack, 19 00:01:05,760 --> 00:01:07,720 Speaker 1: what do you think should I order in or should 20 00:01:07,720 --> 00:01:09,840 Speaker 1: I just walk down Third Avenue and pick it up. 21 00:01:10,640 --> 00:01:13,040 Speaker 1: You know, it is a conundrum. Uh, you know, I 22 00:01:13,160 --> 00:01:15,840 Speaker 1: had that choice yesterday and I actually was doing the 23 00:01:15,880 --> 00:01:18,120 Speaker 1: same thing you did during the pandemic, ordering a lot 24 00:01:18,160 --> 00:01:19,880 Speaker 1: of digital a lot of delivery. I dec had to 25 00:01:19,920 --> 00:01:22,240 Speaker 1: go into the restaurant interact with the team, eat my 26 00:01:22,319 --> 00:01:24,679 Speaker 1: ball right there in the restaurant. It was absolutely delicious, 27 00:01:24,760 --> 00:01:27,280 Speaker 1: So um, I would encourage you to go into the restaurant. 28 00:01:27,840 --> 00:01:30,000 Speaker 1: All right, Jack, we know you know sales have been 29 00:01:30,080 --> 00:01:32,560 Speaker 1: very strong and we're just looking at your most recently 30 00:01:33,319 --> 00:01:35,640 Speaker 1: released results there. I want to talk about the cost 31 00:01:35,720 --> 00:01:38,520 Speaker 1: side and margins because I know you guys in the 32 00:01:38,560 --> 00:01:41,080 Speaker 1: restaurant businesses are dealing with two challenges right now. One 33 00:01:41,200 --> 00:01:44,839 Speaker 1: is rising food cost prices and number two is labor. 34 00:01:45,200 --> 00:01:47,520 Speaker 1: Shortage of labor. Talk to us about those two issues 35 00:01:47,560 --> 00:01:50,600 Speaker 1: and how they're impacting your margins. Yeah, you know, late 36 00:01:50,720 --> 00:01:53,320 Speaker 1: labor in the US is a real challenge right now, 37 00:01:53,480 --> 00:01:55,480 Speaker 1: and it's it's one of, if not the most challenging 38 00:01:55,560 --> 00:01:58,640 Speaker 1: labor environments I've seen, where everybody at the same time 39 00:01:58,720 --> 00:02:01,800 Speaker 1: needs to hire people. The economy is opening up, you know, 40 00:02:01,960 --> 00:02:04,120 Speaker 1: we're opening up our dining rooms. People want to dine 41 00:02:04,160 --> 00:02:06,800 Speaker 1: in Um. You know now that the pandemic is, you know, 42 00:02:06,920 --> 00:02:10,079 Speaker 1: in the late stages, and so everyone's trying to hire 43 00:02:10,120 --> 00:02:12,160 Speaker 1: at the same time, and at the same time employees 44 00:02:12,200 --> 00:02:15,679 Speaker 1: are they've been cooped up for either working from home 45 00:02:15,960 --> 00:02:18,920 Speaker 1: or for other reasons cooped up at home. They're really 46 00:02:19,080 --> 00:02:21,639 Speaker 1: thoughtful and discerning about where they want to work and 47 00:02:21,680 --> 00:02:24,120 Speaker 1: where they don't want to work. And so we had 48 00:02:24,160 --> 00:02:26,480 Speaker 1: to take a big move a couple of months ago. 49 00:02:26,520 --> 00:02:29,040 Speaker 1: We announced in May, and then we actually enacted in 50 00:02:29,200 --> 00:02:32,560 Speaker 1: June a significant increase in wages where we went up 51 00:02:32,560 --> 00:02:37,839 Speaker 1: about from somewhere around thirteen dollars plus to average rate 52 00:02:37,919 --> 00:02:41,440 Speaker 1: of fifteen dollars. And it's worked really really well since then. 53 00:02:41,480 --> 00:02:45,040 Speaker 1: Our application flow is increased dramatically, uh you know, the 54 00:02:45,120 --> 00:02:48,400 Speaker 1: turnover are losing of people to other folks who were 55 00:02:48,440 --> 00:02:51,320 Speaker 1: paying one or two dollars more has slowed down quite 56 00:02:51,320 --> 00:02:53,440 Speaker 1: a bit, and so it's worked out really related well 57 00:02:53,480 --> 00:02:55,799 Speaker 1: for us. Now, we did have to raise prices a 58 00:02:55,880 --> 00:02:58,520 Speaker 1: bit um, you know, to fund that fifteen percent increase. 59 00:02:58,560 --> 00:03:01,720 Speaker 1: We did raise prices about we're going to but we 60 00:03:01,840 --> 00:03:04,880 Speaker 1: feel like that was a very fair trade. The customers 61 00:03:04,919 --> 00:03:07,520 Speaker 1: who have commented so far have said they'll gladly pay 62 00:03:07,520 --> 00:03:10,760 Speaker 1: an extra thirty cents for exactly to make sure that 63 00:03:10,880 --> 00:03:13,480 Speaker 1: people can, you know, earn a living wage. And so 64 00:03:14,040 --> 00:03:15,400 Speaker 1: we think that went really well. By the way, the 65 00:03:15,440 --> 00:03:17,160 Speaker 1: people when they make more money, they spend more money, 66 00:03:17,160 --> 00:03:19,480 Speaker 1: and we think that's good for the economy. So and well, 67 00:03:19,520 --> 00:03:21,679 Speaker 1: there there's an old Henry Ford a lesson for you. 68 00:03:22,360 --> 00:03:25,679 Speaker 1: My my thing is, and to be fair, you know, 69 00:03:26,280 --> 00:03:29,600 Speaker 1: we're relatively wealthy. We have good jobs here, so um, 70 00:03:29,720 --> 00:03:31,480 Speaker 1: you know there are some people in the country that aren't, 71 00:03:32,120 --> 00:03:34,359 Speaker 1: that aren't able to But I'm happy to pay a 72 00:03:34,480 --> 00:03:36,760 Speaker 1: couple of dollars more for a meal if I know 73 00:03:37,000 --> 00:03:42,200 Speaker 1: that the employees are getting paid better. And usually I 74 00:03:42,320 --> 00:03:45,400 Speaker 1: find the customer experience is much better if the employees 75 00:03:45,440 --> 00:03:46,840 Speaker 1: are getting paid more. Do you I mean, I know 76 00:03:46,920 --> 00:03:48,880 Speaker 1: you've got to keep your eye on costs, but do 77 00:03:49,000 --> 00:03:52,000 Speaker 1: you find that you know, your workers are happier to 78 00:03:52,120 --> 00:03:57,640 Speaker 1: serve food to customers if they if they're getting these raises. Listen, 79 00:03:57,680 --> 00:03:59,800 Speaker 1: I think you can look at the business and look 80 00:03:59,800 --> 00:04:01,880 Speaker 1: at the labor line as an expense, or you can 81 00:04:01,960 --> 00:04:04,720 Speaker 1: look at labor as um. Those are your people, that's 82 00:04:04,760 --> 00:04:06,800 Speaker 1: the lifeblood of your restaurant. In our case, we run 83 00:04:07,000 --> 00:04:09,280 Speaker 1: all of our restaurants. We don't franchise any We have 84 00:04:09,360 --> 00:04:12,320 Speaker 1: over ninety employees. And when we were able to attract 85 00:04:12,440 --> 00:04:14,800 Speaker 1: great employees who really love to work in the kitchen, 86 00:04:14,840 --> 00:04:17,000 Speaker 1: they love to serve customers, they love to be part 87 00:04:17,040 --> 00:04:20,920 Speaker 1: of a team atmosphere, they are better employees. They make 88 00:04:21,000 --> 00:04:23,280 Speaker 1: the team better and they make the customer experience better. So, 89 00:04:23,839 --> 00:04:26,520 Speaker 1: you know, the investing in the higher wages along with 90 00:04:26,600 --> 00:04:29,520 Speaker 1: other things we've done, like we've invested in offering debt 91 00:04:29,560 --> 00:04:31,800 Speaker 1: free degrees to our folks. And you know, we have 92 00:04:31,880 --> 00:04:36,200 Speaker 1: benefits in terms of physical health benefits and mental health benefits. 93 00:04:36,279 --> 00:04:38,880 Speaker 1: And we're about to launch something to to help from 94 00:04:38,920 --> 00:04:41,520 Speaker 1: a financial standpoint, to make sure that our our our teams, 95 00:04:41,920 --> 00:04:44,640 Speaker 1: our individual employees are able to understand what it means 96 00:04:44,680 --> 00:04:47,480 Speaker 1: to be financially healthy and make good financial decisions. These 97 00:04:47,520 --> 00:04:50,119 Speaker 1: are all things that we make. Those investments in our folks, 98 00:04:50,400 --> 00:04:52,640 Speaker 1: they make investments back. They want to stay with us, 99 00:04:53,200 --> 00:04:55,240 Speaker 1: and they want to advance their career with us as well. 100 00:04:55,360 --> 00:04:57,080 Speaker 1: And because we're a growth company, you know, we've got 101 00:04:57,120 --> 00:04:58,839 Speaker 1: three thousand restaurants, but we know we can have at 102 00:04:58,920 --> 00:05:01,680 Speaker 1: least six thousand in the US, and that doesn't doesn't 103 00:05:01,720 --> 00:05:05,560 Speaker 1: even count outside the US. We need lots of future leaders, 104 00:05:05,680 --> 00:05:07,760 Speaker 1: and we hire great people who are really bought into 105 00:05:07,800 --> 00:05:09,600 Speaker 1: what we're trying to do today. They will be our 106 00:05:09,640 --> 00:05:11,800 Speaker 1: future leaders tomorrow. That's kind of where I went to 107 00:05:11,800 --> 00:05:14,560 Speaker 1: go Jack, Given some of those challenges that uh, you 108 00:05:14,640 --> 00:05:17,560 Speaker 1: know we're seeing across this economy in terms of labor, 109 00:05:17,960 --> 00:05:21,080 Speaker 1: What has that done to your store opening strategy here 110 00:05:21,160 --> 00:05:24,080 Speaker 1: maybe you know, in the next six twelve months. Yeah, 111 00:05:24,160 --> 00:05:25,800 Speaker 1: it really hasn't changed it a bit. You know, we've 112 00:05:25,839 --> 00:05:28,520 Speaker 1: had a few interruptions here and there where we've had 113 00:05:28,560 --> 00:05:31,120 Speaker 1: to delay in opening by maybe a week or ten 114 00:05:31,200 --> 00:05:32,760 Speaker 1: days something like that, and that was just so we 115 00:05:32,800 --> 00:05:35,440 Speaker 1: can make sure that we have the full complement of 116 00:05:35,560 --> 00:05:37,600 Speaker 1: crew and their world trained. The thing you don't want 117 00:05:37,640 --> 00:05:39,240 Speaker 1: to do. You don't want to rush and opening, and 118 00:05:39,920 --> 00:05:42,400 Speaker 1: you know, if you target a July one day and 119 00:05:42,680 --> 00:05:44,400 Speaker 1: you don't have the team up and ready to go 120 00:05:44,480 --> 00:05:47,239 Speaker 1: and fully train, it's the right decision to wait until 121 00:05:47,400 --> 00:05:49,560 Speaker 1: a week or ten days later. You only get a 122 00:05:49,680 --> 00:05:52,120 Speaker 1: chance to make a first impression one time with new 123 00:05:52,160 --> 00:05:54,520 Speaker 1: customers in a new trade area. And so we've had 124 00:05:54,640 --> 00:05:58,160 Speaker 1: minor delays like that. But we actually just announced yesterday 125 00:05:58,279 --> 00:06:00,880 Speaker 1: that that we're going to exceed the early year guidance. 126 00:06:00,920 --> 00:06:03,200 Speaker 1: We give guidance of two restaurants that we would open 127 00:06:03,240 --> 00:06:05,360 Speaker 1: this year. We now expect that we will not only 128 00:06:05,480 --> 00:06:07,240 Speaker 1: hit that number, we will exceed that number. And so 129 00:06:07,680 --> 00:06:09,640 Speaker 1: our development team they're doing a great job getting the 130 00:06:09,720 --> 00:06:13,520 Speaker 1: sites up and running and constructed. And then are HR 131 00:06:13,600 --> 00:06:15,040 Speaker 1: and our os folks are doing a great job and 132 00:06:15,120 --> 00:06:18,960 Speaker 1: making sure that people trained to open those restaurants. All right, Jack, 133 00:06:19,000 --> 00:06:22,320 Speaker 1: thanks so much for joining us. CAP is fifty billion 134 00:06:22,360 --> 00:06:25,880 Speaker 1: dollars right now, this round number. It's it's a pleasure 135 00:06:25,920 --> 00:06:30,239 Speaker 1: talking to you. And u uh. The story has been amazing. 136 00:06:30,279 --> 00:06:33,720 Speaker 1: I've been following it, you know, for years, because we 137 00:06:33,839 --> 00:06:35,600 Speaker 1: used to have a Chipotle here north and now we 138 00:06:35,640 --> 00:06:37,120 Speaker 1: have them down south, and so I've been eating the 139 00:06:37,160 --> 00:06:38,760 Speaker 1: food and that makes me want to follow a story 140 00:06:39,720 --> 00:06:42,839 Speaker 1: all the more, Jack Carton, there is a chief financial 141 00:06:43,000 --> 00:06:49,400 Speaker 1: officer of Chipotle. After um fantastic earnings, the street bids 142 00:06:49,440 --> 00:06:52,440 Speaker 1: the stock up sighties six to an all time high. 143 00:06:52,880 --> 00:06:58,479 Speaker 1: This is Bloomberg. Let's get over to David Kudla right now. 144 00:06:58,839 --> 00:07:01,720 Speaker 1: We've been telling you um that he's that he's coming 145 00:07:01,800 --> 00:07:04,800 Speaker 1: on with us, and now he's finally here. So we're 146 00:07:04,839 --> 00:07:08,680 Speaker 1: happy all as always to talk to um David. He 147 00:07:08,720 --> 00:07:10,920 Speaker 1: has a you know, as I was saying earlier, a 148 00:07:11,000 --> 00:07:15,840 Speaker 1: big following in terms of, uh, the listeners just right 149 00:07:15,920 --> 00:07:19,160 Speaker 1: into us whenever you come on, David. So UM, we're 150 00:07:19,360 --> 00:07:23,400 Speaker 1: always grateful to get your insight. Mainstay Capital Management UM 151 00:07:23,520 --> 00:07:26,720 Speaker 1: out on out in Michigan. There three not billion dollars 152 00:07:26,760 --> 00:07:30,280 Speaker 1: of assets under management. The question I've been asking for 153 00:07:30,400 --> 00:07:33,000 Speaker 1: weeks and I haven't gotten a sufficient answer to is 154 00:07:33,440 --> 00:07:35,720 Speaker 1: what's going on with rates? Why are we at one 155 00:07:36,680 --> 00:07:40,360 Speaker 1: on the tenure? Why is the real yield negative one 156 00:07:40,400 --> 00:07:44,600 Speaker 1: per cent? What does it mean to you? Uh, it 157 00:07:44,720 --> 00:07:48,240 Speaker 1: doesn't mean the same thing to me. Uh, good morning, 158 00:07:48,320 --> 00:07:50,720 Speaker 1: Matt And and I hope the I hope the listeners 159 00:07:50,760 --> 00:07:53,440 Speaker 1: are writing in good things about me, of course, but yeah, 160 00:07:53,760 --> 00:07:56,280 Speaker 1: but it doesn't mean the same thing to me that 161 00:07:56,440 --> 00:07:59,640 Speaker 1: it means to some people. I think that you know, Uh, 162 00:08:00,520 --> 00:08:02,760 Speaker 1: there's still people that are that that are looking for 163 00:08:03,000 --> 00:08:08,120 Speaker 1: signals from the bond market. Uh, like the old days. 164 00:08:08,120 --> 00:08:10,120 Speaker 1: And when I say the old days, I mean before 165 00:08:10,240 --> 00:08:14,760 Speaker 1: there was so much manipulation of rates by the federal reserve, 166 00:08:15,120 --> 00:08:17,880 Speaker 1: and we could count on the bond market to send 167 00:08:17,960 --> 00:08:20,520 Speaker 1: us signals about the economy and to send us signals 168 00:08:20,600 --> 00:08:24,480 Speaker 1: and and you know, normal reaction functions that that could 169 00:08:24,520 --> 00:08:26,960 Speaker 1: help us in our our investments and where we should 170 00:08:26,960 --> 00:08:30,080 Speaker 1: be going in the markets. But especially in the past 171 00:08:30,160 --> 00:08:33,480 Speaker 1: fifteen months, but even before that, UM, I think it 172 00:08:33,559 --> 00:08:36,839 Speaker 1: says more about the amount of liquidity, the amount of 173 00:08:38,160 --> 00:08:41,240 Speaker 1: asset purchases, but not just by our FED, but by 174 00:08:41,320 --> 00:08:45,040 Speaker 1: the ECB and other central banks. They're just pushing yields 175 00:08:45,120 --> 00:08:50,280 Speaker 1: down and it is just distorted. Um the pictures so much. 176 00:08:50,480 --> 00:08:52,839 Speaker 1: If you think about back in the nineteen eighties when 177 00:08:52,920 --> 00:08:56,080 Speaker 1: we were at five and a half percent inflation, where 178 00:08:56,200 --> 00:09:00,880 Speaker 1: we're bond yields then compared to today, we're sitting here 179 00:09:01,679 --> 00:09:06,160 Speaker 1: UH at UH one point to seven seven basis points 180 00:09:06,200 --> 00:09:10,280 Speaker 1: on a ten year on a thirty year with inflation. 181 00:09:10,440 --> 00:09:13,559 Speaker 1: Last read we had at five point four p UM. 182 00:09:13,800 --> 00:09:18,160 Speaker 1: So it's it's not it's it's not about a reraction 183 00:09:18,240 --> 00:09:21,839 Speaker 1: of the economy, iraction inflation. It's about the FED. We 184 00:09:21,920 --> 00:09:26,000 Speaker 1: are just a wash with liquidity. The asset purchases mostly 185 00:09:26,120 --> 00:09:29,680 Speaker 1: by the FED, bombs and NBS is mostly being purchased 186 00:09:29,720 --> 00:09:33,520 Speaker 1: by the FED and just driving rates down. Hey, David, 187 00:09:33,559 --> 00:09:36,280 Speaker 1: you know, the pandemic unfortunately is still with us. We 188 00:09:36,600 --> 00:09:37,880 Speaker 1: a lot of folks feel like we're on the other 189 00:09:38,000 --> 00:09:41,040 Speaker 1: side of it, but there's still that delta variant. How 190 00:09:41,120 --> 00:09:44,240 Speaker 1: are you guys thinking about it from a stock selection 191 00:09:44,280 --> 00:09:47,839 Speaker 1: perspective or sector perspective as it relates to Hey, this 192 00:09:48,040 --> 00:09:50,760 Speaker 1: thing might be with us maybe a little bit longer. Well, 193 00:09:50,960 --> 00:09:54,480 Speaker 1: you know, it was, it was it was an easy 194 00:09:54,880 --> 00:09:56,839 Speaker 1: I'll just say it was an easy trade last year 195 00:09:56,880 --> 00:09:59,839 Speaker 1: and not saying that in hindsight. Uh. You know, we 196 00:10:00,040 --> 00:10:03,800 Speaker 1: went with the stay at home I T e. Commerce, uh, 197 00:10:03,880 --> 00:10:06,679 Speaker 1: those trades last year, and I think a lot of investors, 198 00:10:06,679 --> 00:10:08,680 Speaker 1: a lot of professionals did very well in that environment, 199 00:10:09,280 --> 00:10:11,920 Speaker 1: and a lot of investors and professionals are frustrated this 200 00:10:12,080 --> 00:10:15,480 Speaker 1: year with this, uh, this constant rotation back and forth 201 00:10:15,600 --> 00:10:19,120 Speaker 1: between value and growth, whether it's a month to month, 202 00:10:19,160 --> 00:10:21,560 Speaker 1: week to week, or like this week day to day, 203 00:10:21,840 --> 00:10:25,480 Speaker 1: just the difference between Monday and Tuesday. And uh, you know, 204 00:10:25,760 --> 00:10:28,640 Speaker 1: one of the things that we're looking at that that uh, 205 00:10:29,080 --> 00:10:32,679 Speaker 1: we think makes sense for investors in their portfolios for 206 00:10:32,760 --> 00:10:36,920 Speaker 1: two reasons. Uh, is you know, there's the this this 207 00:10:37,080 --> 00:10:40,800 Speaker 1: constant argument where the leadership will be between growth and 208 00:10:40,960 --> 00:10:44,600 Speaker 1: value is to look at defensives. And you know, defensives, 209 00:10:45,000 --> 00:10:48,480 Speaker 1: we haven't had five per cent correction in the market 210 00:10:48,559 --> 00:10:52,120 Speaker 1: or fire I should say pullback, uh since last October. 211 00:10:52,240 --> 00:10:55,040 Speaker 1: We usually get or the averages at least three of 212 00:10:55,080 --> 00:10:59,839 Speaker 1: those in a year, at least one crushing in a year, 213 00:11:00,480 --> 00:11:03,640 Speaker 1: and so there's concerned about that. That's where defensive position 214 00:11:03,679 --> 00:11:07,120 Speaker 1: in a portfolio can help. Also, um so one area's 215 00:11:07,120 --> 00:11:09,480 Speaker 1: healthcare to look at is a good one for that. 216 00:11:10,120 --> 00:11:13,840 Speaker 1: And with these renewed concerns about COVID with the delta variant, 217 00:11:14,640 --> 00:11:19,000 Speaker 1: one area we like in particular is um is medical devices, 218 00:11:19,080 --> 00:11:23,679 Speaker 1: medical technology and devices because as we saw and you've 219 00:11:23,679 --> 00:11:26,480 Speaker 1: been reporting on the show, we are seven day average 220 00:11:26,480 --> 00:11:29,079 Speaker 1: in cases in this country had gotten down at the 221 00:11:29,160 --> 00:11:32,000 Speaker 1: end of June to about eleven thousand, and you know, 222 00:11:32,040 --> 00:11:34,360 Speaker 1: we we've ramped back up to over forty with the 223 00:11:34,880 --> 00:11:38,120 Speaker 1: delta variant. You I want. I was wondering because you're 224 00:11:38,160 --> 00:11:42,000 Speaker 1: in um in Michigan near Detroit, right just north of 225 00:11:42,160 --> 00:11:45,719 Speaker 1: Royal Oak there, and you have about three and a 226 00:11:45,880 --> 00:11:48,839 Speaker 1: billion in assets under management, but you're one of the 227 00:11:48,880 --> 00:11:53,520 Speaker 1: top one independent financial advisors for years and years um 228 00:11:54,120 --> 00:11:57,520 Speaker 1: at Barons uh Forbes rates you one of the top 229 00:11:57,600 --> 00:12:00,920 Speaker 1: one hundred wealth advisors. You want to Stanford and did 230 00:12:01,000 --> 00:12:04,000 Speaker 1: all of everything that the super smart um Wall Street 231 00:12:04,240 --> 00:12:06,160 Speaker 1: guys need to do. But you're not on Wall Street. 232 00:12:06,360 --> 00:12:09,080 Speaker 1: What what's business like there? Is any different? Are your 233 00:12:09,160 --> 00:12:12,040 Speaker 1: clients calling in from here or do you have a 234 00:12:12,160 --> 00:12:16,800 Speaker 1: local base? So we have, I mean, we really consider 235 00:12:16,880 --> 00:12:19,959 Speaker 1: ourselves a national advisor. We have we have clients and 236 00:12:20,200 --> 00:12:24,800 Speaker 1: forty seven states and twelve other countries because of people, 237 00:12:25,320 --> 00:12:28,959 Speaker 1: you know, businesses global these days. We have investors that 238 00:12:29,280 --> 00:12:32,160 Speaker 1: that move around the country or from around the country 239 00:12:32,200 --> 00:12:34,920 Speaker 1: and move around the world. Certainly we have a lot 240 00:12:35,280 --> 00:12:38,480 Speaker 1: here in Michigan, a lot of clients that that are 241 00:12:38,520 --> 00:12:42,679 Speaker 1: in the auto industry. Um, so we do I mean, 242 00:12:42,800 --> 00:12:48,480 Speaker 1: but certainly represent you know, entire country. Yeah, in global business. 243 00:12:48,520 --> 00:12:50,040 Speaker 1: All right, David, thank you so much for joining us. 244 00:12:50,080 --> 00:12:52,480 Speaker 1: We always appreciate getting your insight. We appreciate your time. 245 00:12:52,559 --> 00:12:55,680 Speaker 1: David Cood left, founder, CEO and chief investment strategist for Mainstake. 246 00:12:55,760 --> 00:12:57,400 Speaker 1: We should ring there, you know, we should should go 247 00:12:57,480 --> 00:13:00,360 Speaker 1: there at because there's obviously a lot of people for 248 00:13:00,440 --> 00:13:02,000 Speaker 1: us to interview and then you could get David and 249 00:13:02,080 --> 00:13:08,560 Speaker 1: do a round table. End we are going to talk 250 00:13:08,679 --> 00:13:11,240 Speaker 1: stocks right now. We have got the senior US equity 251 00:13:11,320 --> 00:13:15,000 Speaker 1: strategist from UBS Global Wealth Management, Nadia level with us 252 00:13:15,640 --> 00:13:21,400 Speaker 1: and uh, what a market? I mean, where do we begin? Nadia? Um, 253 00:13:21,960 --> 00:13:24,120 Speaker 1: It's been such an incredible run. I was reading about 254 00:13:24,240 --> 00:13:26,719 Speaker 1: a really successful hedge fund manager this morning that was 255 00:13:26,800 --> 00:13:28,680 Speaker 1: up seven percent year to date, and I thought, well, 256 00:13:29,160 --> 00:13:31,440 Speaker 1: I would rather just be in the SNP five double 257 00:13:31,520 --> 00:13:34,960 Speaker 1: that return. Does this continue? Do we continue to hit 258 00:13:35,080 --> 00:13:39,280 Speaker 1: new highs? Yes, we think that you would continue to 259 00:13:39,360 --> 00:13:42,360 Speaker 1: hit new highs from here. Our expectation is that the 260 00:13:42,520 --> 00:13:45,880 Speaker 1: SNP five hundred will reach five hundred by year end. 261 00:13:46,320 --> 00:13:49,120 Speaker 1: And what's really going to drive that is strong economic 262 00:13:49,240 --> 00:13:53,040 Speaker 1: growth driven by the consumer and earning's upside. We're ready 263 00:13:53,160 --> 00:13:57,000 Speaker 1: seeing that this week during earning season that earnings beaten 264 00:13:57,080 --> 00:14:00,280 Speaker 1: too the upside. We look for that to continue. That's 265 00:14:00,320 --> 00:14:01,800 Speaker 1: kind of where I wanted to go now here. Get 266 00:14:02,160 --> 00:14:04,040 Speaker 1: just kind of getting into the meat of the earning 267 00:14:04,160 --> 00:14:06,800 Speaker 1: season here, And I guess it's all important really about 268 00:14:06,840 --> 00:14:08,640 Speaker 1: the guidance here, because a lot of folks have some 269 00:14:08,800 --> 00:14:12,000 Speaker 1: valuation worries and and feel like you know a lot 270 00:14:12,120 --> 00:14:14,120 Speaker 1: of these stocks, a lot of this market needs to 271 00:14:14,240 --> 00:14:17,079 Speaker 1: earn its way into the multiple kind of big picture, 272 00:14:17,120 --> 00:14:19,360 Speaker 1: what are you looking for earnings and growth and that 273 00:14:19,440 --> 00:14:23,520 Speaker 1: type of thing. Absolutely, so, as you know so far, 274 00:14:23,600 --> 00:14:29,080 Speaker 1: about of the SMP companies have reported and for a quarter, 275 00:14:29,240 --> 00:14:32,800 Speaker 1: we are actually looking for earnings to grow about eighty 276 00:14:32,880 --> 00:14:36,200 Speaker 1: percent year over year, and that's higher than where consensus is. 277 00:14:36,320 --> 00:14:41,360 Speaker 1: Consensus coming into this season without about six uh this season, 278 00:14:41,720 --> 00:14:45,200 Speaker 1: unlike last season, we are seeing companies awards for those feats. 279 00:14:45,240 --> 00:14:47,200 Speaker 1: And so when we look out for the full year 280 00:14:47,320 --> 00:14:52,720 Speaker 1: for twenty one, we expect earnest to grow over percent. 281 00:14:52,880 --> 00:14:55,440 Speaker 1: That's the bove where consensus is, and we expect some 282 00:14:55,560 --> 00:14:59,680 Speaker 1: of that momentum to continue into twenty two. Obviously they'll 283 00:14:59,720 --> 00:15:03,000 Speaker 1: grow three role moderated twenty two because we're just coming 284 00:15:03,040 --> 00:15:04,960 Speaker 1: off of a higher base, but we still look for 285 00:15:05,120 --> 00:15:09,400 Speaker 1: healthy earliest growth in two of about ten percent. So 286 00:15:09,480 --> 00:15:12,080 Speaker 1: what do you think when when people start talking about 287 00:15:12,120 --> 00:15:16,000 Speaker 1: growth fears, A lot of people were attributing low rates 288 00:15:16,080 --> 00:15:19,160 Speaker 1: that we're seeing two concerns that, um, we're not going 289 00:15:19,200 --> 00:15:21,720 Speaker 1: to get a lot of growth. I think some JP 290 00:15:21,880 --> 00:15:25,440 Speaker 1: Morgan analysts said, even though they expect three and a 291 00:15:25,520 --> 00:15:29,200 Speaker 1: half percent growth over the next twelve months. The bond 292 00:15:29,280 --> 00:15:33,920 Speaker 1: market is indicating zero point five percent. Yes, there's a 293 00:15:34,040 --> 00:15:38,160 Speaker 1: disconnecting the bond, but some of that is technical in nature. 294 00:15:38,920 --> 00:15:41,200 Speaker 1: All of you is the last month that you've seen 295 00:15:41,320 --> 00:15:44,400 Speaker 1: this pullback in in yield and the flat and of 296 00:15:44,440 --> 00:15:47,160 Speaker 1: the yield coat has to do with some technical factors. 297 00:15:47,480 --> 00:15:49,480 Speaker 1: We think most of that is behind us, and so 298 00:15:49,640 --> 00:15:52,440 Speaker 1: we look for the tenure to sort of trend back 299 00:15:52,520 --> 00:15:56,480 Speaker 1: up higher. Our target for urine is two percent, and 300 00:15:56,680 --> 00:15:59,720 Speaker 1: so we expect that the current is steepen and that's 301 00:15:59,800 --> 00:16:03,560 Speaker 1: just you positive. We don't think that we are necessarily 302 00:16:03,720 --> 00:16:07,680 Speaker 1: at peak growth. We might hit peak growth into three However, 303 00:16:07,880 --> 00:16:11,040 Speaker 1: we do think that the economy will make above trend 304 00:16:11,160 --> 00:16:15,240 Speaker 1: growth and that's what's important for markets. All Right, Donna, 305 00:16:15,280 --> 00:16:18,040 Speaker 1: Given all that backdrop, what are some of the sectors 306 00:16:18,680 --> 00:16:21,160 Speaker 1: that you guys at GBS are focusing on right now? 307 00:16:22,440 --> 00:16:25,440 Speaker 1: You know, we continue to like value over growth and 308 00:16:25,840 --> 00:16:29,359 Speaker 1: we have approach to capual tilt in our sect or preferences, 309 00:16:29,760 --> 00:16:35,040 Speaker 1: so we favor consumer, discretionary, energy, financials, and industrials. I 310 00:16:35,240 --> 00:16:38,120 Speaker 1: know that value has lacked over the last month or 311 00:16:38,200 --> 00:16:41,040 Speaker 1: so due to the fall in interest rates in the 312 00:16:41,120 --> 00:16:43,040 Speaker 1: flat and of cars. But we think, as I said, 313 00:16:43,080 --> 00:16:45,720 Speaker 1: some of that what we're reverse in common months and 314 00:16:45,840 --> 00:16:48,920 Speaker 1: that should save our value, particularly financials, as we know 315 00:16:49,080 --> 00:16:52,040 Speaker 1: is a larger segment in value. And you believe inflation 316 00:16:52,200 --> 00:16:57,080 Speaker 1: is transitory. I think that's consensus on the street and 317 00:16:57,880 --> 00:17:01,640 Speaker 1: probably among the smartest economists in the world as well. However, 318 00:17:02,080 --> 00:17:04,320 Speaker 1: I continue to hear from c e O S and 319 00:17:04,400 --> 00:17:07,160 Speaker 1: I don't know if they're in a sense talking their book, 320 00:17:07,640 --> 00:17:13,640 Speaker 1: but from Statlantis to uh Unilever input costs to Siemens, 321 00:17:13,760 --> 00:17:16,720 Speaker 1: input costs are higher and they're passing those price increases 322 00:17:16,800 --> 00:17:20,960 Speaker 1: onto their customers. We are in the camp that we 323 00:17:21,080 --> 00:17:24,000 Speaker 1: think inflation will be transitory. However, it will take a 324 00:17:24,080 --> 00:17:27,000 Speaker 1: few months for us to get past those high spices 325 00:17:27,040 --> 00:17:29,680 Speaker 1: and inflation, and we think that we get there in 326 00:17:29,800 --> 00:17:32,000 Speaker 1: the fall. But I think it was important for the 327 00:17:32,080 --> 00:17:34,119 Speaker 1: markets and companies is as you know, that is the 328 00:17:34,160 --> 00:17:38,399 Speaker 1: ability of companies to pass on those higher costs two consumers. 329 00:17:38,640 --> 00:17:41,840 Speaker 1: We're seeing that happened broad based in the smp PI 330 00:17:41,960 --> 00:17:44,960 Speaker 1: found to be able to protect margins and so from 331 00:17:45,000 --> 00:17:48,920 Speaker 1: a market standpoint, we're not concerned about the increase in inflation. 332 00:17:49,080 --> 00:17:51,640 Speaker 1: We think it will will subside as we head into 333 00:17:51,720 --> 00:17:54,600 Speaker 1: the back half of the year, and we think that 334 00:17:54,720 --> 00:17:57,840 Speaker 1: companies will continue to protect their margins. And more importantly, 335 00:17:57,880 --> 00:18:00,639 Speaker 1: you want to also focus on companies that have powers 336 00:18:01,000 --> 00:18:06,199 Speaker 1: that consumers. Got it, Nadia, thanks so much for joining us. 337 00:18:06,280 --> 00:18:10,560 Speaker 1: Nadia level their senior US equity strategist at UBS Global 338 00:18:10,680 --> 00:18:15,200 Speaker 1: Wealth Management. All right, Matt, it seems like the whole 339 00:18:15,240 --> 00:18:18,840 Speaker 1: world's going to electric vehicles. We've got Mercedes benz Senor 340 00:18:18,880 --> 00:18:21,680 Speaker 1: gonna spend forty seven billion dollars on their e V 341 00:18:22,720 --> 00:18:26,800 Speaker 1: business over the next decade. And what happens to internal 342 00:18:26,840 --> 00:18:29,240 Speaker 1: combustion engines? Is that going to be an extinct relic 343 00:18:29,280 --> 00:18:32,920 Speaker 1: at some point? It's something I spend a lot of time, 344 00:18:33,119 --> 00:18:34,360 Speaker 1: you know what. I spent a lot of time thinking 345 00:18:34,400 --> 00:18:36,320 Speaker 1: about that and talking about Barry Riholtz. Do we have 346 00:18:36,359 --> 00:18:37,840 Speaker 1: them on today? I think we can do that. I 347 00:18:37,880 --> 00:18:40,399 Speaker 1: think we haven't at d N Yeah. Yeah. Let's chat 348 00:18:40,440 --> 00:18:42,640 Speaker 1: with Michael Dean. He's an expert all this stuff. He's 349 00:18:42,680 --> 00:18:46,000 Speaker 1: the auto analyst covering all the European autos for Bloomberg Intelligence. 350 00:18:46,040 --> 00:18:49,120 Speaker 1: He's based in London. Is one of my faves over there. 351 00:18:49,200 --> 00:18:53,040 Speaker 1: So Michael, this sounds big to me that Mercedes is saying, 352 00:18:53,040 --> 00:18:55,879 Speaker 1: all right, we're putting all our chips in here on 353 00:18:56,040 --> 00:18:59,560 Speaker 1: these evs. Tell us how big this is. Yes, So 354 00:18:59,760 --> 00:19:03,159 Speaker 1: that doubled their target for x cvs, which which are 355 00:19:03,200 --> 00:19:07,200 Speaker 1: plug in so include hybrids. By two thousand of the 356 00:19:07,240 --> 00:19:10,479 Speaker 1: seals mixed they were, but now they're saying they want 357 00:19:10,520 --> 00:19:12,840 Speaker 1: to go a hundred percent by two thousand and thirty. 358 00:19:13,119 --> 00:19:15,240 Speaker 1: Now there was a caveat. It depends on the markets. 359 00:19:15,560 --> 00:19:17,320 Speaker 1: And I don't know about you, but I don't think 360 00:19:17,359 --> 00:19:19,560 Speaker 1: the US market is going to go a hundred percent 361 00:19:19,680 --> 00:19:22,040 Speaker 1: by two thousand and thirty. But it's a very encouraging 362 00:19:22,119 --> 00:19:24,919 Speaker 1: sign and it shows they're fully committed to electric vehicles. 363 00:19:25,800 --> 00:19:30,040 Speaker 1: It's to me, I've wondered why, Um, none of the 364 00:19:30,080 --> 00:19:34,040 Speaker 1: big carmakers has already done this, And I know Volkswagen 365 00:19:34,119 --> 00:19:36,520 Speaker 1: kind of did, but I mean five years ago. You know, 366 00:19:36,560 --> 00:19:38,399 Speaker 1: when I drove a Tesla for the first time in 367 00:19:38,480 --> 00:19:41,960 Speaker 1: two thousand and ten with Jason Harper from Road and Track, 368 00:19:42,080 --> 00:19:45,960 Speaker 1: I was like, damn, this is awesome. Um, and I 369 00:19:46,000 --> 00:19:48,040 Speaker 1: think there's no there's no roar of the engine, so 370 00:19:48,240 --> 00:19:50,520 Speaker 1: what do you can do with your Lamborghini, your or 371 00:19:50,600 --> 00:19:52,040 Speaker 1: your Lambo when you get back here. I mean, if 372 00:19:52,080 --> 00:19:54,800 Speaker 1: I have a Lamborghini, um, I would probably have another 373 00:19:54,920 --> 00:19:58,880 Speaker 1: car too. So but Michael, why didn't any big car 374 00:19:59,000 --> 00:20:04,119 Speaker 1: maker get this idea before the pandemic? What? They certainly 375 00:20:04,160 --> 00:20:06,680 Speaker 1: didn't take Tesla seriously for many years. It wasn't until 376 00:20:06,720 --> 00:20:09,480 Speaker 1: two thousands and seventeen. And part of that is because 377 00:20:09,520 --> 00:20:12,159 Speaker 1: electric vehicles don't make any money. You can see from 378 00:20:12,200 --> 00:20:15,200 Speaker 1: Tesla the majority of their profits come from selling regulatory 379 00:20:15,359 --> 00:20:19,159 Speaker 1: credits and that's still the case. But because they're scaling 380 00:20:19,280 --> 00:20:22,200 Speaker 1: up and because they see battery costs going to below 381 00:20:22,240 --> 00:20:24,240 Speaker 1: a hundred dollars the killer what tow by two thousand 382 00:20:24,280 --> 00:20:27,120 Speaker 1: twenty five, they can see those profits on the horizon. 383 00:20:27,520 --> 00:20:30,960 Speaker 1: And so Daynler now saying that theirselves will be electric. 384 00:20:31,200 --> 00:20:34,560 Speaker 1: They're still sticking to their double digits margin targets. So 385 00:20:34,680 --> 00:20:37,800 Speaker 1: that is encouraging. So, Michael, just give us a sense 386 00:20:37,840 --> 00:20:40,840 Speaker 1: of kind of the driving public in Europe. What's the 387 00:20:40,960 --> 00:20:44,120 Speaker 1: embrace of evs. Because here in the U S it's 388 00:20:44,200 --> 00:20:46,959 Speaker 1: it's it's coming. But until again you put a four 389 00:20:47,040 --> 00:20:50,480 Speaker 1: D F one fifty fully EV you know, electrified, I'm 390 00:20:50,520 --> 00:20:52,800 Speaker 1: not sure this market is gonna move that much. What's 391 00:20:52,840 --> 00:20:56,400 Speaker 1: it like in Europe? Yeah, it's still modest, So it's 392 00:20:56,440 --> 00:20:59,920 Speaker 1: about fift market share for plug ins, So that's literally 393 00:21:00,040 --> 00:21:03,240 Speaker 1: evenly and that's really been pushed by government incentives. So 394 00:21:03,320 --> 00:21:05,119 Speaker 1: in Germany you can get nine and a half thousand 395 00:21:05,200 --> 00:21:08,920 Speaker 1: euros off a plug in car. Globally, if you look 396 00:21:08,960 --> 00:21:12,400 Speaker 1: at BMW and Mercedes, the market shell battery electric vehicles 397 00:21:12,440 --> 00:21:16,040 Speaker 1: is only three UM, so three percent battery electric, ten 398 00:21:16,119 --> 00:21:19,840 Speaker 1: percent um plug in in total, and in Europe it's 399 00:21:19,840 --> 00:21:22,760 Speaker 1: a probably double the market shell that it is. Globally, 400 00:21:23,160 --> 00:21:25,480 Speaker 1: it does seem like it's picking up. It does seem 401 00:21:25,520 --> 00:21:29,040 Speaker 1: like there's something more prestige for a fully battery electric vehicle. 402 00:21:29,160 --> 00:21:31,639 Speaker 1: And I've not understood this either. If I have the 403 00:21:31,760 --> 00:21:36,320 Speaker 1: option and the means, I'd much rather have what BMW 404 00:21:36,560 --> 00:21:39,480 Speaker 1: called a range extender, right, I'd much rather have a 405 00:21:39,680 --> 00:21:43,959 Speaker 1: sweet electric vehicle that also has a little triple in it. Right. 406 00:21:44,400 --> 00:21:48,920 Speaker 1: Why why is that not so popular? Well? Um well, firstly, 407 00:21:49,000 --> 00:21:52,560 Speaker 1: from a market's perspective, they see hybrids as a sort 408 00:21:52,600 --> 00:21:55,600 Speaker 1: of interim technology. And if you look at Tesla, it's 409 00:21:55,640 --> 00:21:58,240 Speaker 1: getting the valuation because it's pure electric. If you look, 410 00:21:58,280 --> 00:22:00,640 Speaker 1: what's happened to Volksbag in this year Because they've given 411 00:22:00,680 --> 00:22:04,119 Speaker 1: a battery electric target out to two thousand and thirty, 412 00:22:04,400 --> 00:22:07,920 Speaker 1: it's got some tech recognition. So that's why other companies 413 00:22:08,040 --> 00:22:12,240 Speaker 1: want to push the battery electric angle more um than 414 00:22:12,320 --> 00:22:17,040 Speaker 1: than hybrids. But from a consumer's perspective, guest, because there's 415 00:22:17,160 --> 00:22:21,440 Speaker 1: range anxiety, there's there's not enough charging points, hybrid is 416 00:22:21,480 --> 00:22:24,520 Speaker 1: a much better option in the short term. So my god, 417 00:22:24,560 --> 00:22:26,080 Speaker 1: that's what where I want to go is to the 418 00:22:26,200 --> 00:22:29,159 Speaker 1: charging stations. It seems like there's that could be a 419 00:22:29,160 --> 00:22:34,040 Speaker 1: little kink in the rollout of the electrified vehicle plant. 420 00:22:34,440 --> 00:22:38,600 Speaker 1: Who does that and that what's what's the play there? Yes, so, 421 00:22:38,840 --> 00:22:41,239 Speaker 1: so the companies themselves are putting money in, they need 422 00:22:41,280 --> 00:22:45,080 Speaker 1: the governments to invest um that. There's collaborations with the 423 00:22:45,680 --> 00:22:49,240 Speaker 1: oil companies as well. Um So, so there're certainly investing 424 00:22:49,960 --> 00:22:53,400 Speaker 1: in sort of recharging points, but you're right, there's still 425 00:22:53,520 --> 00:22:55,560 Speaker 1: very few of them and it's going to take a 426 00:22:55,680 --> 00:22:58,000 Speaker 1: huge investment to get to where they want to be, 427 00:22:58,400 --> 00:23:02,000 Speaker 1: especially if if months um and you want to m 428 00:23:02,280 --> 00:23:04,960 Speaker 1: you know, achieve their mission targets out to two thousand thirty. 429 00:23:05,000 --> 00:23:08,960 Speaker 1: Where they're looking for another reduction in co two kilometer 430 00:23:09,080 --> 00:23:11,680 Speaker 1: for their cars, and by that time I just can't 431 00:23:11,880 --> 00:23:13,880 Speaker 1: I can't understand why it's taking so long. And I've 432 00:23:13,920 --> 00:23:18,160 Speaker 1: asked Ben burden um this and and other oil majors. 433 00:23:18,280 --> 00:23:21,200 Speaker 1: Like in Germany, when you're driving the auto barn, you 434 00:23:21,400 --> 00:23:25,320 Speaker 1: you see every few kilometers either a shell or in 435 00:23:25,400 --> 00:23:29,440 Speaker 1: a row. Why not spend the next six months putting 436 00:23:29,520 --> 00:23:33,119 Speaker 1: charging stations at each one? You know you can do it. 437 00:23:33,359 --> 00:23:36,320 Speaker 1: We have the technology. I feel like they're pushing back 438 00:23:36,359 --> 00:23:40,080 Speaker 1: a little bit against this. Yeah, they are expensive though, 439 00:23:40,200 --> 00:23:43,320 Speaker 1: so a fast charging point is about forty dollars, so 440 00:23:43,920 --> 00:23:45,840 Speaker 1: you need quite a few of them. And it's no 441 00:23:45,960 --> 00:23:48,760 Speaker 1: good going to a petrol station which has charging points 442 00:23:48,760 --> 00:23:51,400 Speaker 1: where the petrot sivation might take you five minutes to refill. 443 00:23:51,680 --> 00:23:54,200 Speaker 1: What if there's a queue um at a charging points 444 00:23:54,400 --> 00:23:57,000 Speaker 1: and it's going to take minutes to recharge. You know, 445 00:23:57,080 --> 00:23:59,080 Speaker 1: that's quite a long stage. So you can see the 446 00:23:59,119 --> 00:24:02,560 Speaker 1: attractions still of the combustion engine for sure, for sure, 447 00:24:02,640 --> 00:24:04,560 Speaker 1: But for the gas stations, like if I've got you 448 00:24:04,720 --> 00:24:07,520 Speaker 1: for thirty minutes, I could sell you a lot of 449 00:24:07,600 --> 00:24:11,040 Speaker 1: stuff exactly. I think Tesla's it has us doing that right, 450 00:24:12,640 --> 00:24:14,399 Speaker 1: that's very true. That's very true that there is a 451 00:24:14,480 --> 00:24:17,200 Speaker 1: different angle there. But people want convenience as well. So 452 00:24:17,560 --> 00:24:19,480 Speaker 1: you know, like the porsh you take and it's expensive, 453 00:24:19,520 --> 00:24:23,280 Speaker 1: but you can recharge the vehicle to in fifteen minutes. 454 00:24:23,600 --> 00:24:25,840 Speaker 1: And this technology will be rolled out to other cars, 455 00:24:25,880 --> 00:24:27,680 Speaker 1: I think probably over the next three or four years. 456 00:24:28,200 --> 00:24:30,200 Speaker 1: It's a hot car, but it's two under grand for 457 00:24:30,320 --> 00:24:32,879 Speaker 1: the Yeah, that's what I'm saying. All right, So Michael, 458 00:24:33,160 --> 00:24:35,080 Speaker 1: talk to us, just give us an update on just 459 00:24:35,280 --> 00:24:38,959 Speaker 1: production for the European companies. Are they still suffering from 460 00:24:38,960 --> 00:24:41,080 Speaker 1: a lack of chips as this can continue to be 461 00:24:41,119 --> 00:24:43,920 Speaker 1: an issue for the remainder of the year. It's interesting. 462 00:24:44,000 --> 00:24:46,480 Speaker 1: So the first half numbers most of the companies are 463 00:24:46,480 --> 00:24:48,840 Speaker 1: pre released so much better than expected. We had that 464 00:24:48,880 --> 00:24:52,879 Speaker 1: from Mercedes yesterday, UM Fox, Fagan them w still to release, 465 00:24:53,200 --> 00:24:57,399 Speaker 1: but the outlook from Mercedes was that they're not going 466 00:24:57,480 --> 00:25:00,880 Speaker 1: to make their sales expectations. So instead of having silicificutly 467 00:25:00,960 --> 00:25:03,000 Speaker 1: higher sells, they're just gonna be at the prior level. 468 00:25:03,160 --> 00:25:06,800 Speaker 1: They're blame me um semi conductor shortages and that is 469 00:25:06,840 --> 00:25:09,200 Speaker 1: the issue. But also if you look at Europe, the 470 00:25:09,320 --> 00:25:11,920 Speaker 1: underlying demand for autos in Europe is still quite weak. 471 00:25:12,160 --> 00:25:15,600 Speaker 1: Although it's up in the first half, it's still below 472 00:25:15,880 --> 00:25:17,920 Speaker 1: that of two thousand and nineteen. So I think it's 473 00:25:17,920 --> 00:25:21,240 Speaker 1: maybe a combination of uncertainty over demand, but also you know, 474 00:25:21,320 --> 00:25:24,000 Speaker 1: semi conductors is an issue and it continues to be 475 00:25:24,080 --> 00:25:26,000 Speaker 1: an issue in the second half. Hey, Michael just got 476 00:25:26,080 --> 00:25:30,520 Speaker 1: thirty seconds here. Why did Folkswagen do the Remac deal 477 00:25:30,640 --> 00:25:33,440 Speaker 1: with Bugatti? What does that what? What value does that 478 00:25:33,560 --> 00:25:37,159 Speaker 1: add for herberts Well. I just think that they want 479 00:25:37,200 --> 00:25:40,080 Speaker 1: to take the lead in terms of electric supercars and 480 00:25:40,160 --> 00:25:43,280 Speaker 1: they can do that with Remac and Bugatti, and it 481 00:25:43,359 --> 00:25:46,680 Speaker 1: also gives Porsche the technology in the future. On the 482 00:25:46,760 --> 00:25:49,000 Speaker 1: e D side, I think thanks for listening to the 483 00:25:49,040 --> 00:25:52,960 Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews 484 00:25:53,000 --> 00:25:57,280 Speaker 1: of Apple Podcasts or whatever podcast platform you prefer. I'm 485 00:25:57,320 --> 00:26:01,080 Speaker 1: Matt Miller. I'm on Twitter at Matt Miller en seventy three. 486 00:26:01,720 --> 00:26:04,280 Speaker 1: On Fall Sweeney, I'm on Twitter at pt Sweeney. Before 487 00:26:04,320 --> 00:26:07,480 Speaker 1: the podcast, you can always catch us worldwide at Bloomberg Radio.