WEBVTT - Markets, Streaming, And Crypto (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.520 at Bloomberg dot com slash podcast. A lot for the 0:00:23.600 --> 0:00:27.160 markets to digest here right in the teeth of earning season. 0:00:27.200 --> 0:00:30.479 We've got the ECB meeting tomorrow, the FED. We're gonna 0:00:30.480 --> 0:00:33.360 get at something in July, I believe, is the dates 0:00:33.360 --> 0:00:35.920 of lots for this market to digest. To take a 0:00:35.960 --> 0:00:39.480 step back and put it on into perspective, Luca Paolini, 0:00:39.640 --> 0:00:43.400 chief strategist for pick Ta Asset Management based in London. 0:00:43.440 --> 0:00:46.120 He joins us, Luca, as we stand back here and 0:00:46.159 --> 0:00:49.159 start to really get into the teeth of this earning season. 0:00:49.920 --> 0:00:52.279 What do you expect to hear from companies? What are 0:00:52.280 --> 0:00:54.680 you looking for? What are you kind of paying attention 0:00:54.720 --> 0:00:58.080 to during these earnest conference calls that we're all listening to. 0:00:59.200 --> 0:01:02.160 What morning everyone, Well, I think you know the we 0:01:02.240 --> 0:01:05.520 tend to focus a lot on what company is gonna 0:01:05.560 --> 0:01:09.000 tell us about the consumer, I think we should actually 0:01:09.040 --> 0:01:13.199 look at investment because investment normally is the real driver 0:01:13.360 --> 0:01:16.160 would really create a recession. So I think from the 0:01:16.200 --> 0:01:19.160 consumer we know pretty much the fundamentals. We know what 0:01:19.280 --> 0:01:21.440 can go right, what can wrong. I think the real 0:01:21.680 --> 0:01:23.720 for me the question mark and what I want to 0:01:23.800 --> 0:01:27.520 know if companies are holding back on investment, if they 0:01:27.560 --> 0:01:30.800 are reduced in accounts, and I think in this especially 0:01:30.800 --> 0:01:34.000 discerning season, we actually expectations are quite low. I want 0:01:34.040 --> 0:01:36.559 to see the guidance and when I see companies telling 0:01:36.640 --> 0:01:39.760 us we are company enough or not company enough to 0:01:40.400 --> 0:01:45.800 basically expand, to increase basically to two to hire people, 0:01:46.560 --> 0:01:48.160 and that's for me, would be the focus because I 0:01:48.160 --> 0:01:50.480 think on the consumer we pretty much know the story. 0:01:50.480 --> 0:01:53.520 I think for on investments it's being very strong. And 0:01:53.520 --> 0:01:55.600 I think this is to me is the key things 0:01:55.640 --> 0:01:58.440 to watch, not so much the residence or not of 0:01:58.480 --> 0:02:02.400 the consumer. Are I haven't seen evidence that companies are 0:02:03.000 --> 0:02:08.200 holding path, that they're waiting to make that decision. And 0:02:08.360 --> 0:02:11.680 on the on the fringe, certainly on the West Coast, 0:02:12.240 --> 0:02:15.120 starting to reduce at least the pace of hiring or 0:02:15.160 --> 0:02:18.840 even cut back on headcount. Well we've seen obviously apple 0:02:19.240 --> 0:02:23.079 in the data. When you look at for example, capital 0:02:23.120 --> 0:02:25.880 good orders, I seen an outcome high. What is what 0:02:25.960 --> 0:02:31.040 has happened though that investment expectations or plans have been 0:02:31.120 --> 0:02:34.120 cut significantly, So again there is this kind of the 0:02:34.200 --> 0:02:37.000 data still looks very, very solid. I think, though I 0:02:37.040 --> 0:02:42.320 can see at the margin um some significant potentially reduction investment. 0:02:42.320 --> 0:02:45.000 But again that's where that's why I'm waiting for companies 0:02:45.040 --> 0:02:47.440 to tell us, because I think it's clear that momentum 0:02:47.520 --> 0:02:50.560 is lowing. But it's also clear that you know, you 0:02:50.639 --> 0:02:54.359 don't want to basically get rid of people, and it's 0:02:54.360 --> 0:02:56.240 so difficult then to rehire them. So I think it's 0:02:56.280 --> 0:02:59.280 very important for me to have a sense if companies 0:02:59.280 --> 0:03:01.880 are confident enough and and I think that's the key point. 0:03:02.520 --> 0:03:05.040 Looka here at Bloomberg, we really take a global view. 0:03:05.080 --> 0:03:08.160 Our audience takes a global view. We have important day 0:03:08.320 --> 0:03:14.440 from the European Central Bank tomorrow. What are you looking for? UM? 0:03:14.520 --> 0:03:17.960 You know, the European Central Bank as this incredible ability 0:03:17.960 --> 0:03:21.680 to disappoint UM. In the past two occasion when they 0:03:21.840 --> 0:03:24.679 create in July we had a recession. I think this 0:03:24.800 --> 0:03:27.280 time they'll have no other choice. I don't think that 0:03:27.840 --> 0:03:30.320 the interest rate, I I think it's more like, to 0:03:30.360 --> 0:03:32.239 be honest, for me, it's more likely to be fifty 0:03:32.240 --> 0:03:35.800 bus this point, because I think they want to send 0:03:35.800 --> 0:03:37.960 the message that they have in prestion under control, and 0:03:38.040 --> 0:03:40.320 at the same time they want to send a signal 0:03:40.600 --> 0:03:42.760 that they're there to help the terriphery. So probably that 0:03:42.920 --> 0:03:46.480 that's a compromise that will emerge from from the council. 0:03:47.000 --> 0:03:49.400 Twenty five or fifty bus point, I think it's pretty 0:03:49.480 --> 0:03:51.240 much the same. I don't think it would change anything. 0:03:51.600 --> 0:03:54.200 But I think also they're they're forced to take action, 0:03:54.440 --> 0:03:57.320 you know, with the Europe pretty much a parity inflation 0:03:57.360 --> 0:04:00.520 going through the roof, I think that to take action, 0:04:00.560 --> 0:04:02.240 But I don't think it's going to be a huge 0:04:02.280 --> 0:04:04.600 market mover. I don't think that would make a big, big, big, 0:04:04.720 --> 0:04:06.840 big difference for markets, to be honest with you. We 0:04:06.880 --> 0:04:09.000 saw the euro at least rally back through a dollar 0:04:09.160 --> 0:04:11.520 up to one oh three, one or two. Right now, 0:04:12.120 --> 0:04:14.720 Um does that kind of hold or do you see 0:04:14.720 --> 0:04:17.640 continued dollar strength here? I mean I'm looking across the spectrum. 0:04:17.720 --> 0:04:21.159 Right one, we're back up to the pound. Um still 0:04:21.200 --> 0:04:24.280 one thirty eight for the end, so still incredible weakness there. 0:04:24.279 --> 0:04:28.600 But does does d x Y continue to rise? But 0:04:28.839 --> 0:04:31.920 I I do believe that the dollar is very very 0:04:31.960 --> 0:04:36.600 close to a major peak, secretical and and and also strategic. 0:04:37.000 --> 0:04:40.040 But you need, though, I think, to two things. What 0:04:40.480 --> 0:04:43.120 clear indication that you have inflation of peak. I think 0:04:43.120 --> 0:04:45.520 it does, but this is not the view of everyone. 0:04:46.160 --> 0:04:49.719 And second one we need to see a clear reacceleration 0:04:49.760 --> 0:04:52.159 in China, where the evidence is also not for people, 0:04:52.240 --> 0:04:55.040 is strong. So I do believe, and you'll be surprised 0:04:55.040 --> 0:04:57.320 at what I'm saying, is that the currency which has 0:04:57.360 --> 0:04:59.960 them what upside here is the end, the end, because 0:05:00.040 --> 0:05:02.919 the end that's been effectively killed by what but interest 0:05:03.000 --> 0:05:07.880 rate expectations going up everywhere else apart from Japan. And 0:05:07.880 --> 0:05:10.640 and if the reason if the global economies leaps into 0:05:10.720 --> 0:05:13.960 recession the interest really differential, we go actually in favor 0:05:14.040 --> 0:05:17.200 of Japan. And given that the expectation are solo and 0:05:17.240 --> 0:05:20.880 evaluations were attractive, I think and all sounds strange that 0:05:20.960 --> 0:05:24.520 the Japanese end could be the big surprise in the 0:05:24.520 --> 0:05:26.240 next three to six months for the year. I think 0:05:26.480 --> 0:05:29.640 there are too many risks in terms of the war 0:05:29.760 --> 0:05:33.599 in Ukraine, d C be Italy I think it's probably 0:05:33.600 --> 0:05:35.280 still a little bit too early to be bullish on 0:05:35.360 --> 0:05:38.040 the Europe. Look at real quick at thirty seconds happened 0:05:38.080 --> 0:05:40.360 fixed income. It's been a brutal first half of the year. 0:05:40.360 --> 0:05:43.919 Any opportunities there, Yes, there are, There are in some 0:05:44.040 --> 0:05:47.279 emerging markets like Brazil. I think also in some parts 0:05:47.320 --> 0:05:50.440 of the of the credit market. Corporate depth, especially in 0:05:50.480 --> 0:05:55.039 the US, Triple A names saved names, good yelds. I 0:05:55.080 --> 0:05:59.280 think still solid in a way, solely fundamental. Yeah, we 0:05:59.320 --> 0:06:01.719 start to see some values again, especially in the US 0:06:01.800 --> 0:06:04.200 and some parts of YEM, but we stay away from Europe. 0:06:04.400 --> 0:06:07.719 All right, Luca, great stuff. Always appreciate getting your perspective. 0:06:08.279 --> 0:06:12.359 Luca Paolini, chief strategist for picked A Asset Management. He 0:06:12.440 --> 0:06:19.520 is based in London. Why does everyone hate rats so much? 0:06:21.120 --> 0:06:26.560 Are they worse than squirrels or chipmunks? Yes? What did 0:06:26.560 --> 0:06:28.960 you say? Did you say poop? Yeah? I don't think 0:06:29.000 --> 0:06:31.920 you can say that. No, I'm not sure, but we'll check. 0:06:32.680 --> 0:06:37.000 Ken Fell. You says, maybe that's okay, okay. Our director, 0:06:37.400 --> 0:06:40.520 our global director, Ken Fellow says, you can, but let's not. 0:06:40.760 --> 0:06:43.560 Let's not. Let's know that's a brutal story, all right, 0:06:43.600 --> 0:06:45.560 Greg Jarrett, thank you so much. Here are we got 0:06:45.560 --> 0:06:48.560 a Federal Reserve meeting coming up, said July. I think 0:06:48.560 --> 0:06:50.719 that's the big one, Jennifer Leasy, and your economist, managing 0:06:50.760 --> 0:06:53.560 director of Demo Capital Markets joins us. Jennifer, I mean 0:06:53.600 --> 0:06:55.440 we're in the midst of earning season. That's kind of 0:06:55.440 --> 0:06:59.800 got investors intention here. Um, but again, we know that 0:07:00.160 --> 0:07:03.000 the real focus is on this Federal Reserve as we 0:07:03.040 --> 0:07:07.120 think about inflation, as we think about recession. What do 0:07:07.240 --> 0:07:11.560 you expect from our federal reserve? Good morning? And by 0:07:11.560 --> 0:07:13.960 the way, just on one funn'l know what you're saying earlier, 0:07:14.000 --> 0:07:18.520 how about raccoons? Yes, for the FT, I mean so 0:07:18.640 --> 0:07:20.840 for the Federal Reserve, I mean we so we expect 0:07:20.960 --> 0:07:25.160 a seventy five basis point Ray hike, Um, jesus next 0:07:25.160 --> 0:07:27.920 we call already, UM. I don't think um a lot 0:07:27.920 --> 0:07:30.360 of people anymore are thinking about a risk of a 0:07:30.440 --> 0:07:33.320 hundred basis point move, just given that we've seen the 0:07:33.440 --> 0:07:36.160 softer data lately. UM. In terms of what he the 0:07:36.320 --> 0:07:38.080 Fed Area is going to say, I think he's I 0:07:38.120 --> 0:07:42.560 would expect him to soften his um, his his points 0:07:42.560 --> 0:07:44.440 about the economy. I mean, last time we heard from 0:07:44.480 --> 0:07:47.520 him was that was in Centrup, Portugal, and he was 0:07:47.560 --> 0:07:50.360 talking about how the US economy was in strong shape 0:07:50.400 --> 0:07:53.800 and well positioned to withstand tighter monetary policy. And I 0:07:53.880 --> 0:07:56.560 still think that second point is probably still valid. But 0:07:56.840 --> 0:07:59.520 you know, we have again seen some weakening, you know, 0:07:59.560 --> 0:08:03.240 for example in the housing market, some slightly softer you 0:08:03.280 --> 0:08:07.480 know UM retail sales data last week, and those are 0:08:07.520 --> 0:08:09.920 the pieces of data that Governor Waller was what was 0:08:10.000 --> 0:08:12.520 talking about referring to in terms of what he was 0:08:12.560 --> 0:08:14.960 going to how he was going to vote next week. 0:08:15.320 --> 0:08:18.360 So I think centified basis points is probably the base 0:08:18.440 --> 0:08:21.600 case UM right now, and maybe soft softening is too 0:08:21.640 --> 0:08:23.480 a little bit on the economy. By the way, I 0:08:23.600 --> 0:08:27.560 have a bet with Critty Gupta um dinner of her 0:08:27.720 --> 0:08:30.800 choice that inflation has peaked. I think it. I think 0:08:30.880 --> 0:08:33.720 nine point one percent was the high rating for cp I. 0:08:33.760 --> 0:08:37.880 Do you think I'm at risk of losing that bet? Boy? 0:08:38.040 --> 0:08:40.480 I hope it is UM. But I think over the 0:08:40.520 --> 0:08:43.360 next few months the the yar year comfortables might get 0:08:43.400 --> 0:08:46.280 a little tougher UM. But I think for the July 0:08:46.480 --> 0:08:50.760 CPI UM report probably gonna see it pulled back, probably 0:08:50.960 --> 0:08:53.439 probably below the nine percent level, just given that gas 0:08:53.440 --> 0:08:55.760 prices to have. You know, we had some relief on 0:08:55.800 --> 0:09:00.000 the on that front at least, but again, broader measures, 0:09:00.000 --> 0:09:02.280 I mean broader measures in terms of the core measures 0:09:02.280 --> 0:09:05.120 are still quite elevated as well. So I don't know 0:09:05.200 --> 0:09:06.880 if they have completely hit the peak. But we've been 0:09:06.880 --> 0:09:09.959 saying Q three and I think I've been saying September ish, 0:09:10.080 --> 0:09:12.080 so I'm sort of waffling on that front, but you 0:09:12.080 --> 0:09:16.440 know that I'm really hoping that n would be the peak. Jennifer, 0:09:16.559 --> 0:09:18.679 what do you make of this U S dollar? I mean, 0:09:18.720 --> 0:09:20.040 it's the highest if you look at the d X 0:09:20.160 --> 0:09:22.640 Y and next the highest and almost twenty years kind 0:09:22.679 --> 0:09:25.440 of thing they almos put that into perspective and kind 0:09:25.440 --> 0:09:27.160 of how you think things may play out. Don't afford. 0:09:29.080 --> 0:09:30.320 It's got a lot of it still has a lot 0:09:30.360 --> 0:09:32.520 of tail winds behind it, just given you know how 0:09:32.559 --> 0:09:35.040 aggressive the FED is planning is still planning to be, 0:09:35.120 --> 0:09:39.079 you know, um raising rates expeditiously, and then when you're 0:09:39.080 --> 0:09:41.040 looking at it versus you know, for example, the euro 0:09:41.200 --> 0:09:43.760 even though you know everyone's expecting or we are all 0:09:43.760 --> 0:09:46.320 expecting the easy of you to do something tomorrow, you know, 0:09:46.400 --> 0:09:48.440 as your last guest said, you know, they have a 0:09:48.559 --> 0:09:51.599 habit of disappointing. Um. You know, this is probably a 0:09:51.600 --> 0:09:54.080 great opportunity for them to prove everybody wrong. But if 0:09:54.120 --> 0:09:55.960 they don't, you know, we could see you know, the 0:09:56.000 --> 0:10:00.280 euro dip below parody again. Um, the pound. Also, it 0:10:00.360 --> 0:10:01.959 is getting a little bit of a tailwind this morning, 0:10:02.000 --> 0:10:03.920 but at the same time it also has a lot 0:10:03.960 --> 0:10:07.959 of headwinds facing it with potentially eleven percent inflation coming up, 0:10:08.080 --> 0:10:10.640 and of course you know, much slower growth in the 0:10:10.720 --> 0:10:13.439 second half with inflation so high. So I think because 0:10:13.440 --> 0:10:15.720 of that, just us all broadly, I think still has 0:10:16.160 --> 0:10:18.400 some life left in it. By the way, there are 0:10:18.400 --> 0:10:22.360 many words we cannot use on radio to describe the 0:10:22.440 --> 0:10:28.079 European situation this winter. How much trouble is that economy 0:10:28.120 --> 0:10:32.800 in It's uh, that's one reach one area that I'm 0:10:32.880 --> 0:10:36.600 very concerned about, just because of that huge heavy reliance 0:10:36.760 --> 0:10:39.679 for too long, um on Russian energy. And even though 0:10:39.720 --> 0:10:42.360 they are now finally trying to rid themselves of that 0:10:42.400 --> 0:10:45.400 reliance by cutting cutting their their their dependents by two 0:10:45.400 --> 0:10:47.040 thirds by the end of the year. You know, I 0:10:47.080 --> 0:10:48.959 would consume you say, good luck with that trying to 0:10:49.000 --> 0:10:51.920 build all those lergy terminals when you're still having a 0:10:51.960 --> 0:10:55.600 big shortage of supplies and of labor. Um. But this 0:10:55.679 --> 0:10:57.400 is the one point in time in my life I 0:10:57.400 --> 0:10:59.600 will say that maybe it's a good thing that there's 0:11:00.080 --> 0:11:03.559 uh climate change um and global warming because hopefully the 0:11:03.600 --> 0:11:06.320 winter will not be really really bad and you know, 0:11:06.400 --> 0:11:10.199 and so the gas usage will not be as high 0:11:10.240 --> 0:11:12.720 as you know as the worst case scenario. But you know, 0:11:12.720 --> 0:11:14.840 this is one area that that for sure, I'm quite 0:11:14.840 --> 0:11:19.720 concerned about. Thirty seconds left gen Um, what's your recession 0:11:19.800 --> 0:11:27.199 kind of expectation? Is it above the US? For the US? Yeah, um, 0:11:27.240 --> 0:11:30.319 maybe a little bit over Um. We actually have a 0:11:30.720 --> 0:11:34.840 negative sign pencilion for the early next year. Um. Maybe 0:11:34.880 --> 0:11:37.439 not you know your traditional um two quarters in a 0:11:37.520 --> 0:11:40.640 row of negative growth, but certainly much flower growth, almost 0:11:40.679 --> 0:11:42.920 like a growth recession, as we have unemployment taking up 0:11:42.920 --> 0:11:44.439 a little bit as well towards the end of this 0:11:44.600 --> 0:11:46.920 year and next. All right, Jennifer Lee, thank you so much. 0:11:47.000 --> 0:11:50.160 We always appreciate getting your thoughts here. Jennifer Lee, Senior 0:11:50.200 --> 0:11:54.240 Economist and Managing director bemo Accoumpital Markets. Again the ECB 0:11:55.120 --> 0:11:58.280 meeting tomorrow, Bloomberg surveillance will be all over that in 0:11:58.320 --> 0:12:00.760 your early morning coverage you can rushed to short there 0:12:00.800 --> 0:12:04.160 and then of course we will definitely overcover the ECB. 0:12:04.480 --> 0:12:06.880 We love the e c B. Well, Christine looks some 0:12:06.960 --> 0:12:09.800 of us love it. Yeah, some of us love it. 0:12:09.800 --> 0:12:13.280 But again, certainly for European listeners and viewers, a big, 0:12:13.320 --> 0:12:20.600 big meeting tomorrow will certainly have all that. Looking at Netflix, 0:12:20.640 --> 0:12:22.800 I reported some numbers last night. I think the takeaway 0:12:22.880 --> 0:12:25.600 was it could have been worse. Um. Looking at the stock, 0:12:25.679 --> 0:12:29.360 the good news is it's up four percent today. The 0:12:29.400 --> 0:12:33.760 bad news is down on a year to date basis. 0:12:34.040 --> 0:12:36.400 Let's break it all down with Mark Douglas, President CEO 0:12:36.440 --> 0:12:40.520 of Mountain. Mountain is an advertising software company enabling brands 0:12:40.600 --> 0:12:44.480 to drive measurable conversions, revenue and site visits. So Mark 0:12:44.840 --> 0:12:51.760 owned by owned by Ryan Reynolds, acquired Ryan Reynolds Creative Agency. Okay, 0:12:51.760 --> 0:12:53.440 so Mark, how do we say this? I guess not 0:12:53.600 --> 0:12:59.440 owned by but you got together with Ryan Reynolds. Yeah, 0:12:59.600 --> 0:13:03.200 Ryan um chief creative officer or a Mountain. So he 0:13:03.520 --> 0:13:06.199 Um has made a lot of movies and I didn't 0:13:06.200 --> 0:13:09.200 want to do some other things, and he and I 0:13:09.280 --> 0:13:12.640 teamed up and he worked in Mountain working with a 0:13:12.720 --> 0:13:16.160 lot of our customers and obviously it's business strategy. So 0:13:16.320 --> 0:13:19.240 it's see I said it wrong. I said Mountain was 0:13:19.240 --> 0:13:23.240 owned by Ryan Reynolds. Actually Mountain bought Ryan Reynolds exactly 0:13:23.320 --> 0:13:27.480 exactly the work maximum method, Yeah, maximum effort. I'm kidding, 0:13:28.280 --> 0:13:31.080 all right, Mark, So again Netflix numbers last You know, 0:13:31.120 --> 0:13:33.760 the tide has changed here. It's not, you know, grow 0:13:33.800 --> 0:13:35.719 at a breakneck speed kind of thing. They're trying to 0:13:35.760 --> 0:13:38.080 adjust to a new world order in terms of a 0:13:38.080 --> 0:13:41.040 lot more competition that maybe the easy growth in terms 0:13:41.120 --> 0:13:43.800 of subscriber growth is is done. What did you take 0:13:43.840 --> 0:13:47.320 away from their results last night? Well, I think the 0:13:47.400 --> 0:13:49.920 one thing to take away is they still are twice 0:13:49.920 --> 0:13:52.320 as large as any of the competitors in terms of 0:13:52.400 --> 0:13:57.560 number of subscribers. So the number of subscribers is clearly slowed. 0:13:57.760 --> 0:14:01.840 I think Netflix people are are responding. Actually I think 0:14:01.840 --> 0:14:05.559 a bit more to how quickly they're responding, announcing the 0:14:05.640 --> 0:14:10.360 ads business, announcing um new ways of doing passwords sharing 0:14:10.520 --> 0:14:13.720 that that generate revenues for them. And so I think 0:14:13.840 --> 0:14:17.199 that's the big too, that overshadow that there's still been 0:14:17.320 --> 0:14:20.760 some subscriber losses in the quarter. And I think you'll 0:14:20.760 --> 0:14:23.160 continue to see that there's some growth in the stock 0:14:23.480 --> 0:14:26.960 as people see them acting decisively. Okay, Mark, how about 0:14:26.960 --> 0:14:32.080 this advertising opportunity for Netflix? Um a lot of analysts 0:14:32.120 --> 0:14:34.720 on the Walsherter saying this could be a big deal 0:14:34.840 --> 0:14:36.440 in terms of the new source of revenue. How do 0:14:36.480 --> 0:14:40.560 you think about that? Yeah, absolutely so. I think the 0:14:40.600 --> 0:14:44.720 opportunity here is it can be as potentially as large 0:14:44.720 --> 0:14:50.240 as Netflix's current revenues. So they have as much as 0:14:50.280 --> 0:14:53.160 of all viewing a TV has tone on Netflix. So 0:14:53.200 --> 0:14:57.040 it's just a huge amount of user engagement people watching 0:14:57.480 --> 0:15:00.600 shows on Netflix that they can potentially monitor size. Now, 0:15:00.600 --> 0:15:04.800 there are some challenges. All that content wasn't acquired by 0:15:04.880 --> 0:15:09.080 Netflix with advertising in mind, so they have to potentially 0:15:09.120 --> 0:15:11.640 get rights to do ads on that content. They have 0:15:11.760 --> 0:15:15.200 to like find places to do it. But there's also 0:15:15.240 --> 0:15:18.840 a lot of opportunity because they have no legacy advertising business, 0:15:18.880 --> 0:15:21.240 they don't have to have thirty second TV ads. They 0:15:21.240 --> 0:15:25.160 can choose any format with any content over time, and 0:15:25.200 --> 0:15:29.000 I think the revenue potential is at least as large 0:15:29.440 --> 0:15:32.440 as Netflix is right now in terms of their their size. 0:15:33.160 --> 0:15:35.360 What happened in this market yesterday I was at the 0:15:35.400 --> 0:15:41.320 crypto UM convention, and obviously crypto has been pooh pooed 0:15:41.360 --> 0:15:44.440 because of the incredible crash of bitcoin, but they all said, hey, 0:15:44.440 --> 0:15:47.200 you know what, it's nothing compared to Netflix. You know, 0:15:47.920 --> 0:15:50.480 Netflix has done much worse than than bitcoin, which I 0:15:50.480 --> 0:15:54.000 thought was a silly comparison, but um, it does show 0:15:54.040 --> 0:15:58.080 you just how much I guess froth was in streaming. 0:15:58.160 --> 0:16:02.120 Is it all across streaming or was it just net Flix? Well, 0:16:02.200 --> 0:16:04.920 I don't, I mean frost it's been I think it's 0:16:04.960 --> 0:16:06.760 a pretty strong term. You have to look at it. 0:16:07.320 --> 0:16:11.760 That Netflix lead of revolution. They completely changed the relationship 0:16:11.840 --> 0:16:16.720 between consumers and entertainment, you know, allowing on demand viewing, 0:16:16.760 --> 0:16:19.800 allowing you to get you know, an entire season the 0:16:19.880 --> 0:16:23.760 shows all at once, and so that innovation I don't 0:16:23.760 --> 0:16:27.640 think is I wouldn't perceive that as frosty. I would 0:16:27.800 --> 0:16:32.120 consider it that the market was crashing and Netflix announcement 0:16:32.720 --> 0:16:36.840 that we're having some subscriber losses, and you know, everyone reacted, 0:16:36.960 --> 0:16:42.200 and I think obviously they have challenges. This is not 0:16:42.240 --> 0:16:46.240 going to be easy to transition into having an ad 0:16:46.320 --> 0:16:50.600 supported price point for them, But I think the potential 0:16:50.720 --> 0:16:55.480 there is clear, and so I think Potentially people overreacted 0:16:55.920 --> 0:16:58.560 in terms of the sell off and Netflix stock, and 0:16:58.640 --> 0:17:02.240 you know how the not the price declines in the 0:17:02.320 --> 0:17:05.520 last quarter and you and you're starting to see that turnaround. Mark, 0:17:05.600 --> 0:17:07.560 what do you think about as we step back and 0:17:07.560 --> 0:17:09.520 take a look at the streaming business? Everybody and the 0:17:09.600 --> 0:17:11.840 brothers got a streaming service now, and they're all it 0:17:11.840 --> 0:17:14.840 seems like they're all named plus. Um, how does this 0:17:14.960 --> 0:17:18.200 shake out? I mean, are we going to have three players? 0:17:18.240 --> 0:17:22.639 Five players? Ten players? Are more? Well, there is a 0:17:22.640 --> 0:17:26.520 lot of consolvation. I mean if you look at like Netflix, Disney, 0:17:26.760 --> 0:17:31.320 Discovery Networks, NBC Universal, I think you're looking at like 0:17:31.480 --> 0:17:36.840 five companies or essentially half of the entertainment markets for 0:17:36.840 --> 0:17:40.160 for you know, and television viewing at home. So there's 0:17:40.240 --> 0:17:45.880 already somewhat of a consolidation. I think you'll see that continue. Um. 0:17:45.920 --> 0:17:50.719 In the advertising space, actually, the brand advertising market is 0:17:50.800 --> 0:17:53.760 not really growing that quickly, so you're looking at somewhat 0:17:53.760 --> 0:17:56.159 of a market share war. In other words, you know, 0:17:56.240 --> 0:17:59.119 when Netflix comes to this market with TV ads and 0:17:59.200 --> 0:18:02.560 Disney comes in the market with Disney Plus, it's not 0:18:02.680 --> 0:18:05.920 like Procter and Gamble is going to allocate more budgets 0:18:06.000 --> 0:18:08.679 for TV ads. So it's a bit of a market 0:18:08.720 --> 0:18:12.919 share war actually. So the opportunity is to expand the 0:18:13.000 --> 0:18:18.600 number of television advertisers to basically go beyond just these 0:18:18.680 --> 0:18:21.480 biggest advertisers or else it is going to be a 0:18:21.520 --> 0:18:24.320 bit of a fight and um, so they have to 0:18:24.400 --> 0:18:26.399 kind of do both things. They have to get into 0:18:26.440 --> 0:18:29.760 that market with the biggest advertisers, and they have to 0:18:29.800 --> 0:18:33.360 innovate with Microsoft in case case of Netflix and Disney, 0:18:33.680 --> 0:18:37.320 you know, with their Hulu division, um, in terms of 0:18:37.359 --> 0:18:40.639 to essentially expand the market, or else everyone's going to 0:18:40.720 --> 0:18:43.320 be fighting over the you know, the same pool of dollars. 0:18:43.400 --> 0:18:46.280 All right. So Mark Disney just came out a couple 0:18:46.320 --> 0:18:48.960 of days ago with an announcement they secured nine billion 0:18:48.960 --> 0:18:52.639 dollars in advertising commitments during its Upfront ad sales event, 0:18:52.680 --> 0:18:55.680 which happens kind of Mark May of every year. Uh, 0:18:55.720 --> 0:18:57.520 they're saying streaming played a big part of that. How 0:18:57.520 --> 0:19:01.000 do you what are your takeaways there? Well? I think 0:19:01.119 --> 0:19:04.840 the I mean, I know they love to announce up front, 0:19:04.920 --> 0:19:08.439 but I don't see upfront as a concept lasting for 0:19:08.560 --> 0:19:17.000 many more years. The concept what's that? But the the 0:19:17.000 --> 0:19:20.320 thing is is that upfronts were created because you have, 0:19:20.720 --> 0:19:23.639 you know, a certain number of advertisers that are looking 0:19:23.680 --> 0:19:27.480 for the same shows that the same group of consumers 0:19:27.480 --> 0:19:30.360 are watching, and so they could get people to bid 0:19:30.400 --> 0:19:32.320 against each other to get that. But when you look 0:19:32.359 --> 0:19:35.360 at streaming, you know, you don't target basic, you don't 0:19:35.400 --> 0:19:37.680 care about the show. You care about who's the consumer 0:19:38.040 --> 0:19:40.280 I'm trying to reach, and so you don't really need 0:19:40.680 --> 0:19:43.439 the upfronts in the same way. So I think, to me, 0:19:43.680 --> 0:19:46.960 we've reached peak upfront like that, like the parties on 0:19:47.080 --> 0:19:49.480 on going to be on the dep line, I don't 0:19:49.520 --> 0:19:51.680 think this is the any I think we've reached peak 0:19:51.760 --> 0:19:55.320 up front. But the industry overall will grow because the 0:19:55.400 --> 0:19:58.280 upfront models of fifty year old business model that is 0:19:58.359 --> 0:20:01.119 due for a change, and I think of change is 0:20:01.160 --> 0:20:03.640 going to our car. Yeah, it's some good stories, Matt 0:20:03.720 --> 0:20:05.959 from some of these upfront parties. All right, that's Mark Douglas, 0:20:06.000 --> 0:20:10.200 President CEO of Mountain getting the latest on Netflix again. 0:20:10.280 --> 0:20:12.840 Kind of a mixed report last night, but the you know, 0:20:12.920 --> 0:20:20.920 still talking about what is a growing streaming industry. Let's 0:20:20.960 --> 0:20:24.040 check out with Mike mcblown, senior commodity strategies for Bloomberg Intelligence, 0:20:24.080 --> 0:20:26.760 and he's one of Matt one of those of the 0:20:26.800 --> 0:20:29.760 cool kids that during the pandemic relocated from the Northeast 0:20:29.760 --> 0:20:32.480 down to Miami. And he's always, you know, boasting and 0:20:32.520 --> 0:20:35.159 talking a big game when we're freezing up here in 0:20:35.280 --> 0:20:39.040 January and February. Mike Howard things down in Miami in July. 0:20:40.000 --> 0:20:42.000 It's funny I came south. I can cool off in 0:20:42.040 --> 0:20:44.080 the summer. You guys are getting heat waves now, that's right. 0:20:44.119 --> 0:20:46.120 Wait are you here? I just saw you here yesterday. 0:20:46.200 --> 0:20:47.920 I was yesterday, but I had to come back to 0:20:47.960 --> 0:20:50.159 the rough digs here in Miami. It's it's tough, but 0:20:50.240 --> 0:20:52.399 you know, you got to do it. So do we 0:20:52.520 --> 0:20:56.000 have what do we have going on here in Bitcoin? Well, 0:20:56.040 --> 0:20:59.240 I think the big macro pictures. Bitcoin is one of 0:20:59.280 --> 0:21:01.560 the biggest bull parks in history that just had its 0:21:01.640 --> 0:21:05.080 biggest steepest discount to its Hunter week moving average ever. 0:21:05.200 --> 0:21:07.560 That was just a few days ago. And then you 0:21:07.560 --> 0:21:10.000 look over the other one of the biggest bear markets 0:21:10.040 --> 0:21:13.199 in history, crude oil had its steepest premium to its 0:21:13.240 --> 0:21:15.520 Hunter weak movement average ever and that was just a 0:21:15.520 --> 0:21:16.960 few months ago. And I think what we're doing is 0:21:17.000 --> 0:21:19.359 getting that reversion process now. So since we had that 0:21:19.800 --> 0:21:22.440 seventy five bases point hike which was last month, we're 0:21:22.440 --> 0:21:25.160 probably gonna get one next week. Bitcoin is up about 0:21:25.200 --> 0:21:28.439 ten and crude oil is down about ten percent. To me, 0:21:28.640 --> 0:21:32.560 that's what's going to continue to happen partly because of 0:21:32.600 --> 0:21:35.240 this is the macro the micro and the key thing 0:21:35.240 --> 0:21:36.639 I think to worry about it for a bitcoin is 0:21:36.680 --> 0:21:38.639 only if we get another big plunge in the stock market, 0:21:38.880 --> 0:21:41.119 bitcoin might drop. But it seems to be in the 0:21:41.160 --> 0:21:43.080 process that coming out ahead. And I think that really 0:21:43.080 --> 0:21:44.879 showed us last Thursday. Remember we had that bounce in 0:21:44.920 --> 0:21:47.520 the stock market. Bitcoin did it first. It's like Mattisman 0:21:47.520 --> 0:21:49.280