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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm term Keene Jay Leye.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. We

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Speaker 1: start this program though, by getting Jordan Rochester on the

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Speaker 1: phone the mare a gtain effects strategist to Maura, and

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Speaker 1: Jordan's walk me through the house view right now for

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Speaker 1: how these kind of shocks are going to roll through

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Speaker 1: asset classes, roll through markets in the coming weeks. Hi, John,

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Speaker 1: It's it's not going to be fun and I hate

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Speaker 1: to be the pair of bad news, but there is

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Speaker 1: a lot going on in terms of equity markets. It's

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Speaker 1: huge moves and that's feeding through to foreign exchange markets

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Speaker 1: in weird, wonderful and slightly confusing ways. So where do

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Speaker 1: I start. First, of all, equities were in a world

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Speaker 1: of their own for the past couple of weeks. We

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Speaker 1: have been watching the situation in China, the rally and

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Speaker 1: fixed income, the sell off in commodities, but the equity

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Speaker 1: market was making fresh eyes. So we're seeing that corrections

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Speaker 1: coming back down to where it should be. And I've

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Speaker 1: got these charts on my screen which show me how

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Speaker 1: U S equities trade versus growth expectations, and the same

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Speaker 1: for Europe. And we've seen sell offs in both markets,

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Speaker 1: of course, so they're coming back down towards Earth. The

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Speaker 1: US markets have corrected more than the European ones, and

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Speaker 1: I think there is actually still more room to go

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Speaker 1: because what we're not used to is a supply shock

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Speaker 1: of this magnitude if it escalates. We're used to Donald

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Speaker 1: Trump being able to do a Phase one deal with China,

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Speaker 1: the FED cutting rates and solving the issue with credit

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Speaker 1: markets and resolving financial conditions. Supply shocks are very hard

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Speaker 1: for central bankers or even policy makers to solve. So

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Speaker 1: that's why you're seeing the moves in markets here, and

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Speaker 1: it's going to take time, and time will be painful.

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Speaker 1: When it comes to the European market, they won't have

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Speaker 1: as much flexibility when it comes to rate cuts like

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Speaker 1: the ECB. The ECB it has about ten basis points

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Speaker 1: of rate cuts they could do. They could maybe do

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Speaker 1: quanta to be easing again, but they're already doing it.

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Speaker 1: So for me, I think the currency rising today is

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Speaker 1: just absolute bonkers. And I think that this is something

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Speaker 1: that needs to correct weaker euro and eventually stronger dollar.

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Speaker 1: But what's going on, guys, is when you've got big

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Speaker 1: moves like list and equities, you've got investors repatriating their money,

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Speaker 1: and you have seen those qui outflows drive the U euro.

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Speaker 1: Hire here as that money is coming back home, Jenn,

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Speaker 1: I want to point out we are nine point zero

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Speaker 1: two correction, like we're almost to the cusp of an spres.

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Speaker 1: We're close to ten percent over in Germany on the

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Speaker 1: equity benchmark in Frankfurt, Jordan, let's talk about the euro

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Speaker 1: repat training cash. Are we starting to see some end

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Speaker 1: type qualities to the single currency? There is, John m

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Speaker 1: I was mentioning it before. So we saw contate of

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Speaker 1: easing into a fifteen, and we had extensions, we had

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Speaker 1: slowed downs, and we're back in the same game again.

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Speaker 1: And when you've got buns at negative yields, they you

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Speaker 1: saw massive outflows into US assets, into emerging market assets.

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Speaker 1: So what's going on is European investors have got all

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Speaker 1: these assets abroad and now having fun redemptions, and so

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Speaker 1: they because the risk off tends to see sellers. So

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Speaker 1: you're seeing those fun redemptions mean that they have to

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Speaker 1: bring that money home and convert it back into Euros. Now,

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Speaker 1: this is a flow which is very hard to predict.

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Speaker 1: It's very hard to trade, and timing it to be

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Speaker 1: very difficult. I think once it does settles, and I

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Speaker 1: think if we see a bit of stability, will then

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Speaker 1: go back to euro being much more exposed to what's

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Speaker 1: going on in China and also the situation escalating in

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Speaker 1: Milan as well. So I think short term this is

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Speaker 1: what's driving you are higher, but I'm not chasing it,

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Speaker 1: and I do think that the currency will come under

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Speaker 1: pressure because guys, I think by the end of this

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Speaker 1: year we're all gonna be experts in credit risks again.

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Speaker 1: We've been so used to rates rallying, ECB easing rates

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Speaker 1: for everybody um that we've kind of neglected the credit

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Speaker 1: risks that have been building out there. And if we

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Speaker 1: have a hit to growth like this, and if the

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Speaker 1: lockdowns and the virus spread goes into Q two, maybe

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Speaker 1: even we're still here in June talking about it, then

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Speaker 1: credit risks will be on everyone's minds when we talk

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Speaker 1: about credit risks. Jordan, it seems to be a race

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Speaker 1: to the bottom. I was struck by the idea that

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Speaker 1: the dollar is actually weakening versus certain Asian currencies because

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Speaker 1: people are now treating their focus on the potential for

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Speaker 1: the coronavirus to spread in the United States and for

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Speaker 1: that not being fully priced in. I mean, yes, the

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Speaker 1: euro is expected to weaken more, But how vulnerable is

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Speaker 1: the US here given the fact that a lot of

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Speaker 1: people viewed it as immune from some of the worst

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Speaker 1: impacts here. Yeah, the U S exty market have been

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Speaker 1: the safe haven of ecty markets in the world thanks

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Speaker 1: to all those share by backs. You guys have been

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Speaker 1: enjoying UM. And also you always had the FED rate

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Speaker 1: cutting rates as your backup, and the market is now

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Speaker 1: pricing that in and you've got a pro We see

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Speaker 1: further pricing of that to come. However, let's think more

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Speaker 1: about the end game. Most of the world capital is

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Speaker 1: still between the New York to Boston corridor. When I

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Speaker 1: look at all of my country's I track the biggest

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Speaker 1: holders outside of the residents of those countries of equities

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Speaker 1: for example, UK eputies, European equities, the US. So if

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Speaker 1: everyone's going to repat your eight, the biggest flow is

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Speaker 1: going to be back into dollars. Now. It's not going

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Speaker 1: to be like the global financial crisis because back then

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Speaker 1: there was very little foreign exchange hedging. We've had much

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Speaker 1: higher FX hedging ratios. So the impact on the currency

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Speaker 1: maybe a lot less than what we saw in the

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Speaker 1: Panics of two thousands, seven and eight. Jordan, give us

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Speaker 1: some point here and Dolla Yan, what is your adjusted

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Speaker 1: target now for dollah Yan? Well, look, we had had

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Speaker 1: this big outflow from Japan just the other week. We

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Speaker 1: had that push up to one well and dolli and

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Speaker 1: that was driven and buy pension flows. Our guys still

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Speaker 1: think that will matter um and so we're not chasing

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Speaker 1: the yen strength here. But if we start to see

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Speaker 1: signs of the Tokyo Olympics being canceled, we're looking out

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Speaker 1: for that risk. Maybe something to talk about more in May.

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Speaker 1: I think yen still trades like a safe haven tom

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Speaker 1: and so at some point there might be some yen strength.

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Speaker 1: Are you are you being we're not chasing? Is there

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Speaker 1: a big figure play here on Euro? Then? I mean

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Speaker 1: within all these huge flows, these titanic moments we're talking about,

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Speaker 1: is there like five big figures in Euro one way

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Speaker 1: or the other absolutely. I think essentially once we get

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Speaker 1: over Friday, so tomorrow's month end, and we're going to

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Speaker 1: see some dollar buying. I think when we see those

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Speaker 1: flows because of what's been going on, I think Monday

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Speaker 1: we come back to work, euros lower and we're tracking

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Speaker 1: more towards one oh six one oh seven again over

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Speaker 1: the next month. We'll hold you to that. Jordan's great

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Speaker 1: to catch out with you, Jordan Rochester. Hopefully we'll catch

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Speaker 1: out with him in the next couple of weeks. Now

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Speaker 1: More's g said effect strategists. We are committed, folks to

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Speaker 1: giving you the best conversations we can from medical professionals. John.

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Speaker 1: If you go down fifth even or you know there's

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Speaker 1: well you see so many benefactors of Wall Street Mr. Travis,

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Speaker 1: Mr Icon and others that have put money where Hope

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Speaker 1: and Mouth is in build a first class, world class

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Speaker 1: medical set of institutions. Adam Bernheim is with Mount Sinai

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Speaker 1: and they own the high ground on medical engineering. Biomedical

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Speaker 1: engineering in his case is a study of lungs. He

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Speaker 1: is one of the best in the world at these

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Speaker 1: viruses and what they do to our lungs. He's a

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Speaker 1: cardio thoracic radiologist. I'm really happy to say on this program,

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Speaker 1: we've made such a big effort over the last couple

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Speaker 1: of weeks, the last few months to really focus on

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Speaker 1: leaving the medical issues to the medical professionals. Professionals. Doctor,

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Speaker 1: is fantastic to have you with us on the program.

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Speaker 1: Something I don't think has done, or a lot of

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Speaker 1: people haven't done a good enough job of, is talk

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Speaker 1: about the differences between coronavirus, other viruses, other flus. Take

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Speaker 1: me inside the body, inside the chest, inside the lungs,

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Speaker 1: the pictures that you've seen, Why is this so different?

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Speaker 1: Thank you very much for having me. It's a pleasure

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Speaker 1: to be here. When we first started looking at scans

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Speaker 1: and patients with coronavirus infection from China, we didn't know

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Speaker 1: what to expect because this is a new diagnosis that

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Speaker 1: we were describing for the first time. But as we

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Speaker 1: categorically went through hundreds of cases, we're able to recognize

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Speaker 1: clear patterns that were emerging. Importantly, the way that the

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Speaker 1: lung was infect affected included lesions that had a predilection

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Speaker 1: for a certain area in the lung. They often had

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Speaker 1: a certain shape, and certain other imaging characteristics that were suggestive. Notably,

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Speaker 1: there are other factors and features on the scans that

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Speaker 1: were absent that are found in other infections. For example,

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Speaker 1: patients with other pneumonias often have fluid outside the lungs,

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Speaker 1: lymph node enlargement, nodules, cavitation which means air cavities within

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Speaker 1: the legion, or calcification. These were actually notably absent in

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Speaker 1: all of the patients that we went through, So that's

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Speaker 1: really helpful for distinguishing disinfection from other infections, including other

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Speaker 1: viral infections like influenza. No one single case is one accurate,

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Speaker 1: but if there are enough features on any on a scan,

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Speaker 1: an index of suspicion is elevated. There are enough features

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Speaker 1: that we can be that there are certainly very strongly suggestive,

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Speaker 1: and I think that's one of the reasons that radiologists

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Speaker 1: and cat scans have emerged as foundational and the algorithm

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Speaker 1: of diagnosis of these patients. Dr Bernheim, that's an excellent

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Speaker 1: synopsis of the diagnostic developments here. How nations are looking

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Speaker 1: to identify coronavirus cases, but how does that translate over

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Speaker 1: to the potential remedies and how easy or difficult it

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Speaker 1: is to actually cure these cases. I think one of

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Speaker 1: the keys is just limiting its spread. So I think

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Speaker 1: as a radiologist and one of the key ways that

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Speaker 1: we can be huffle is to ensure prompt diagnosis. So,

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Speaker 1: for example, one of our findings was that patients very

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Speaker 1: early on after symptom onset, if they had a camp

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Speaker 1: skin it was negative actually about half of the time,

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Speaker 1: and that's important to know that there could be false negatives,

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Speaker 1: particularly very early in the disease, so that patients shouldn't

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Speaker 1: be taken off isolation. In terms of combating the epidemic

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Speaker 1: on a larger global scale and treatment, I think the

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Speaker 1: best way is really preventing its spread. So if we

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Speaker 1: have patients that may be suspected of having infection, it's

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Speaker 1: really helpful to know that we can make a diagnosis

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Speaker 1: as early as possible, which is certainly helpful for that

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Speaker 1: individual patients, so we can start treatment as early as possible,

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Speaker 1: but it's also necessary for a greater public health perspective

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Speaker 1: to ensure that patient does remain isolated and will not

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Speaker 1: transmit the disease to others. Donctor, you would have heard

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Speaker 1: people make the comparison to the seasonal flu many many

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Speaker 1: times over the last couple of months. And a question

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Speaker 1: I've had for quite a while and I'd love to

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Speaker 1: put to you, is why this particular coronavirus requires such

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Speaker 1: a huge containment effort to degree that China and others

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Speaker 1: are taking it. Why is that the case? The flu

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Speaker 1: has some similarities to coronavirus, but also some differences Influenza

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Speaker 1: the flu in itself is a very deadly disease that

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Speaker 1: is killed about sixteen thousand people already in this year's

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Speaker 1: season and hospitalized almost three hundred thousand. So influenza and

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Speaker 1: its own right is certainly a very serious infection. However,

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Speaker 1: COVID nineteen are coronavirus infection now is concerning in other ways.

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Speaker 1: For example, the mortality of an infected patient is actually

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Speaker 1: quite a bit higher than influenza. So, for example, the

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Speaker 1: chance of any given patient passing away from suluenza infection

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Speaker 1: is about point one percent, but the mortality rate here

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Speaker 1: is twenty times that about two. That's one feature that's

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Speaker 1: different and another, and I think one of the concerns

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Speaker 1: is that there's a large percentage of the patients that

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Speaker 1: actually have very mild symptoms about of COVID nineteen cases

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Speaker 1: are actually patients that have very mild, non specific symptoms,

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Speaker 1: perhaps some fever and a cough, shortness of breath and

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Speaker 1: little more than that. And there are many that are

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Speaker 1: actually asymptomatic for a very long time before the manifest symptoms.

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Speaker 1: So one of the concerns and one of the distinguishing

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Speaker 1: from influenza, is that you have patients that have sometimes

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Speaker 1: no or mild nonsphysics symptoms and are easily transmitting the

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Speaker 1: disease to others. Dr Bernhind, you have a good knowledge

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Speaker 1: or understanding of the age distribution effect of this virus.

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Speaker 1: The bar charts are simplistic. Everybody over eighties in trouble.

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Speaker 1: Enlighteness on how you go down to the younger patients

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Speaker 1: on that, that's a really interesting question that we're looking at,

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Speaker 1: and you're right. Early investigators have noted a higher mortality

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Speaker 1: in older patients and those with pre existing lung disease

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Speaker 1: like emphysema or fibrosis, and also mail seems to be

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Speaker 1: affected a little bit more as well. One of the

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Speaker 1: things that we found that was really striking is that

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Speaker 1: pediatric patients were characteristically very unaffected. In other words, even

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Speaker 1: the patients that even kids that were positive for the

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Speaker 1: coronavirus very often had normal CT scans, which is something

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Speaker 1: that's uh, not something we necessarily expected. Oh, we have

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Speaker 1: ten more questions in no time. Dr Bernheim, thank you

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Speaker 1: so much for joining us today with Mount sign A Hospital.

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Speaker 1: We look forward to speaking to you again as soon.

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Speaker 1: Adam Bernheim abount uh sign Hi, that's just extraordinary. Let's

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Speaker 1: bring in Patrick now, Patrick Armstrong Flaim Wealth ce io. Patrick,

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Speaker 1: interested to find out what you've been doing in the

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Speaker 1: market of the last couple of weeks. What kind of

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Speaker 1: moves have you've been making. We've not been doing a

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Speaker 1: huge amount, despite a huge amount of volatility, really because

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Speaker 1: we were defensively positioned, so we were quite frustrated when

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Speaker 1: everything was moving higher together earlier in the year, and

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Speaker 1: quite comfortable with our positioning right now at the margins.

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Speaker 1: We've been moving away from some sequality and equities. We

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Speaker 1: sold air Bus Um yesterday. We bought some alphabet Google. Basically,

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Speaker 1: we think Cloud's not going to be impacted by the virus.

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Speaker 1: People stay at home, watch YouTube, search will continue to

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Speaker 1: do well. So we're looking for companies that have a

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Speaker 1: lot of cash, not in new and to the virus

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Speaker 1: by the means, but not going to be severely impacted.

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Speaker 1: To be clear that, Patrick, you are starting to put

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Speaker 1: capital to work then in more offensive areas of the market.

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Speaker 1: Would that be a correct a correct observation of what

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Speaker 1: you're doing. Sorry, you're just cut out for a second.

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Speaker 1: That's okay, Patrick, I'm just wondering if you are starting

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Speaker 1: to put fresh capital into more offensive parts of the

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Speaker 1: market given the sell off that we've seen over the

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Speaker 1: last couple of weeks. Not really so adding off about

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Speaker 1: something we did. Um, it's a great company obviously, but

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Speaker 1: still not cheap we I think the next move I'm

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Speaker 1: going to make is actually selling out of some of

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Speaker 1: my treasury positions and moving into the shorter end of

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Speaker 1: the old curve, so that that's not really an offensive move.

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Speaker 1: But I do think pricing in secular stagnation and that

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Speaker 1: you're going to have a sharp hit to the economy

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Speaker 1: from this. But twelve months from now, very confident what

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Speaker 1: what level of yields is sort of the trigger point

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Speaker 1: for you to sell. I've been thinking about it for

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Speaker 1: the as few days, and we'll probably pull the trigger today.

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Speaker 1: Even the levels now, it's very hard to see how

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Speaker 1: when you get a dividend yield on the SMP five

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Speaker 1: hundred of one point nine percent versus a ten year

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Speaker 1: yield at one point to five and thirty year yield

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Speaker 1: one seven, it's I'd rather have equities for the long term.

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Speaker 1: Short term, there's a lot of momentum behind bonds and

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Speaker 1: a lot of negative momentum on equities. I'm not ready

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Speaker 1: to really make a big position on equities yet because

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Speaker 1: I still think they're expensive, but I do think the

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Speaker 1: bond rally has probably gone too far. Your thoughts one

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Speaker 1: final question, your thoughts on financials right now? And not

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Speaker 1: talked about the banks, but they've got to deal with

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Speaker 1: this unique yield market, don't they. Definitely, And we've owned

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Speaker 1: the banks in Europe in the past, and that's been

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Speaker 1: a mistake we made. When I was Bush on the banks,

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Speaker 1: I expected the ECB to get rates towards zero, and

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Speaker 1: I really think that's the catalyst. Don't need to get

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Speaker 1: back into that. The negative interest rate engine is such

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Speaker 1: a headwind. Unless there is a wave of consolidation in Europe,

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Speaker 1: that would also be good news for the banks, but

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Speaker 1: you have to allow employees to be fired for that

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Speaker 1: to work. Too short of visit Patrick Armston, Thank you

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Speaker 1: so much, Plurimi Capital in London joining us. If you

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Speaker 1: are in the tech stocks, I will just say flat out,

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Speaker 1: this is your interview of the day. She's Shannon Cross

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Speaker 1: of Cross Research. She's not like some ginormous uh name

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Speaker 1: out there where she's like doing the media trial. And

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Speaker 1: we're thrilled to get her on today because she uh

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Speaker 1: sticks to her clients and attention of her clients out

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Speaker 1: of Berkeley political economics, and she does prodigious tech research.

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Speaker 1: Have you changed Shannon your by hold cell on the

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Speaker 1: big thing tech names? You know, I haven't. Um, here's

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Speaker 1: the interesting thing, whether it's Microsoft or Apple or even

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Speaker 1: best by just and I don't cover best Buy, but

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Speaker 1: I was just listening to their earnings called. You know,

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Speaker 1: everyone at this point continues to say that underlying demand

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Speaker 1: remains strong. So yes, the supply chain is interrupted, but

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Speaker 1: all of these companies continue to believe that this will be,

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Speaker 1: you know, a relatively relatively short term issue. Um. Right now,

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Speaker 1: the biggest challenge is getting employees back to the factories

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Speaker 1: in China, and you know, it sounds like some of

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Speaker 1: the factories are starting to come back online. Clearly you know,

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Speaker 1: it seems to be spreading, so we'll have to see

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Speaker 1: what that does over time. But you know, demand is

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Speaker 1: demand is still there. What do the companies you follow

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Speaker 1: do with there once in a century levels of cash?

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Speaker 1: I mean, if there were opportunities seven weeks ago, some

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Speaker 1: of these stocks are down bear market. Is this where

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Speaker 1: we finally see them deploy cash? Well, you know, it

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Speaker 1: will be interesting. I mean from an M and A perspective,

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Speaker 1: we'll see where things things play out. I mean we've

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Speaker 1: been teen HP and Xerox, and obviously that transaction is

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Speaker 1: one where Xerox is looking on putting a ton of

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Speaker 1: leverage onto the combining company, which frankly doesn't seem particularly

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Speaker 1: smart at this point in time. But the ones that

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Speaker 1: have a lot of cash, I mean, I would assume

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Speaker 1: Apple is going to be out very aggressively buying backstock.

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Speaker 1: You know, HP will They just announced a fifteen billion

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Speaker 1: dollar share repurchase program. So as soon as they sort

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Speaker 1: of get through some of the Xerox tender offer prohibitions

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Speaker 1: about buying, they will be you know, and others as well,

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Speaker 1: being Microsoft too, So I think, you know, companies are

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Speaker 1: going to be smart about this. I don't think they're

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Speaker 1: going to overreact. I think the ones I've talked to

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Speaker 1: in the management that most of them are being very

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Speaker 1: prudent about looking at it. They're protecting their employees, they're

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Speaker 1: protecting their partners, and they're assuming that this is going

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Speaker 1: to be short term. And again they keep pointing to

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Speaker 1: the fact that demand remains very solid. Market negative four

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Speaker 1: seventy seven Paul Apple on a weekly chart negative. Yeah, exactly, Shannon.

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Speaker 1: You know, we're so happy to have you on here

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Speaker 1: because we're you know that Microsoft News just kind of

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Speaker 1: added onto the Apple News again, pulling back revenue guidance

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Speaker 1: or adjusting revenue guidance. UM. At this point, is it

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Speaker 1: primarily a supply chain issue for the tech companies throughout

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Speaker 1: the tech stack or is there also, you know, some

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Speaker 1: demand issues. I know you mentioned that the companies are

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Speaker 1: still talking about good underlying demand, But are they seeing

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Speaker 1: canceled orders and mean that type of thing, or is

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Speaker 1: this just supply chain not yet I mean, and you know,

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Speaker 1: no canceled orders that I've heard of yet. I mean,

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Speaker 1: it's it's supply chain. Obviously, sales in China are going

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Speaker 1: to be weak this quarter. UM, But you know, I

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Speaker 1: think you can not that it's going to make up

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Speaker 1: for it, but Apple, for instance, will sell more services

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Speaker 1: and I've had sales appaired to be pretty strong because

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Speaker 1: people are going to remote um you know, remote learning

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Speaker 1: and remote working. Uh, you know, I think that what

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Speaker 1: I've heard is it's literally getting the people to the

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Speaker 1: factories because obviously transportation and in sorry in China has

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Speaker 1: been um impacted, and then you know, people have to

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Speaker 1: be quarantined when they get there to make sure they

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Speaker 1: don't have the virus, and getting the of factories up

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Speaker 1: and running. Um. Interestingly, what I've been told, and I

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Speaker 1: some somehow question it, but it's what I've been told

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Speaker 1: by several people is that shipping has not been a

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Speaker 1: particular issue. So and even access to a lot of

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Speaker 1: components haven't been necessarily the issue. It's been the people issue. So, Shannon,

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Speaker 1: are the companies that you chat to, are they saying, hey,

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Speaker 1: once this passes in China particular, and maybe there's some

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Speaker 1: evidence that maybe it's peaking there, that we can ramp

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Speaker 1: up quickly and this might be a one quarter type

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Speaker 1: issue for them, or this might drag on throughout the year.

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Speaker 1: You know, they're there at this point a lot of

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Speaker 1: them were saying, look, it will be you know, if

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Speaker 1: we can get back to a percent utilization of the

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Speaker 1: factory by the end of March, then you know things

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Speaker 1: should be good for a second quarter. It might be

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Speaker 1: a little optimistic. I mean, you know, we'll see how

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Speaker 1: how long it takes to ramp. I mean, I've heard

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Speaker 1: from companies that they have some factories that are basically

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Speaker 1: making nothing and some factories that are running in a

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Speaker 1: dent um. So that's not really helpful, right, but you know,

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Speaker 1: it's it's kind have along the spectrum um I would

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Speaker 1: I would say, as long as this doesn't expand and

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Speaker 1: start hitting economies, you know, and then you know, consumer

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Speaker 1: confidence than all of that that you can you can

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Speaker 1: kind of get back to normal. I think, you know,

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Speaker 1: companies like Apple can probably go a bit above a

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Speaker 1: hundred percent in terms of bursts in their factories to

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Speaker 1: try to make up for channing Cross with us with

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Speaker 1: a Cross research. We do this with another day to

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Speaker 1: check negative five Dow right now twenty six thousand and

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Speaker 1: four sixty two sixty six points on the standard three

403
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Speaker 1: zero five one and the vix Paul and I've been

404
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Speaker 1: watching carefully from a twenty eight level up to thirty

405
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Speaker 1: two point seven four. I don't have the chart in

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Speaker 1: front of that. Maybe a high more sphear laden fix

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Speaker 1: of the day up five point one eight big figures

408
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Speaker 1: two year yield bottoms out low yield for the day

409
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Speaker 1: one point zero six one. To be clear, that's a

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Speaker 1: bid to note prices price up, yield down uh tenure

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Speaker 1: yield and Paul, I'm sorry, oil is my mint of

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Speaker 1: the day, if you will, Oil forty six nine down

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Speaker 1: two dollars forty four since and there's just simply no bid.

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Speaker 1: There's no best Texas in me absolutely, Tom Shannon, I

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Speaker 1: know you spent a lot of time talking to institutional investors. Um,

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Speaker 1: what do you sense they're doing. Are they taking this

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Speaker 1: as an opportunity to add to some of their best

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Speaker 1: high conviction tech names, or are they just saying this

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Speaker 1: is beyond kind of this is not in our model. Well,

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Speaker 1: I think initially they were saying this is not in

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Speaker 1: our model. We're going to look through that. You know,

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Speaker 1: obviously that was about ten ago, so we can we

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Speaker 1: can get past those comments. I think at this point

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Speaker 1: they are starting to look at you know, I talked

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Speaker 1: to a number of people in Microsoft yesterday, for instance,

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Speaker 1: and they're saying, look, this is you know, a part

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Speaker 1: of their business. Um, it will impact this quarter and

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Speaker 1: maybe a little bit next quarter, but the core underlying um,

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Speaker 1: you know, Fundamentals and Microsoft are very strong, and so

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00:23:00,440 --> 00:23:02,399
Speaker 1: I think some of those names they're they're kind of

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00:23:02,400 --> 00:23:05,639
Speaker 1: trying to start adding to. I assume people will start

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00:23:06,080 --> 00:23:08,040
Speaker 1: taking up Apple at some point. But you know, there's

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00:23:08,080 --> 00:23:10,320
Speaker 1: that old adage about you know, not not catching a

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00:23:10,359 --> 00:23:13,400
Speaker 1: falling knife. Um, so I think some people are sort

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00:23:13,400 --> 00:23:16,920
Speaker 1: of just sideline point. I'm glad you mentioned that let's

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00:23:16,920 --> 00:23:19,440
Speaker 1: go stochastic. We can do that with Shannon Cross the

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00:23:19,520 --> 00:23:23,880
Speaker 1: great chart idea of catching a falling knife in the

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00:23:23,960 --> 00:23:28,920
Speaker 1: dark leads to guessing single data points on a chart. Okay,

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00:23:28,920 --> 00:23:31,000
Speaker 1: we're not going to do that. We're gonna look at

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00:23:31,040 --> 00:23:35,239
Speaker 1: the opposite, which is not stochastic, but trend. Shannon, if

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00:23:35,280 --> 00:23:37,040
Speaker 1: you if you were, you know not, you know, there's

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00:23:37,040 --> 00:23:40,159
Speaker 1: only just me and Paul listening. But Shannon, if you

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00:23:40,200 --> 00:23:43,440
Speaker 1: were to establish a trend for the names you follow,

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00:23:44,160 --> 00:23:48,400
Speaker 1: am I clear that that trend is still up? From

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00:23:48,440 --> 00:23:50,920
Speaker 1: a yes, I think from a long term perspective, Look,

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00:23:50,960 --> 00:23:54,879
Speaker 1: people there are underlying I don't know, changes in business

447
00:23:54,920 --> 00:23:57,000
Speaker 1: that are going on. People are moving to the cloud,

448
00:23:57,040 --> 00:23:59,600
Speaker 1: people are you know, moving to edge computing. We will

449
00:23:59,640 --> 00:24:02,560
Speaker 1: eventually we have five G there's gonna be a lot

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00:24:02,640 --> 00:24:04,879
Speaker 1: of data that's going to be crunched. I mean, you know,

451
00:24:05,640 --> 00:24:08,359
Speaker 1: technology is not something that's you know, going the way

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00:24:08,400 --> 00:24:10,240
Speaker 1: of the buggy whip. I mean, it's it's definitely where

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00:24:10,280 --> 00:24:12,439
Speaker 1: people are going to be in investing. And again, the

454
00:24:12,480 --> 00:24:15,520
Speaker 1: economies were strong going into this. So assuming this is,

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00:24:16,080 --> 00:24:18,400
Speaker 1: you know, something that sort of plays itself out through

456
00:24:18,680 --> 00:24:20,359
Speaker 1: I don't know early summer. I haven't know. I'm not

457
00:24:20,400 --> 00:24:23,119
Speaker 1: a doctor, I don't know, but you know, it's I

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00:24:23,160 --> 00:24:27,320
Speaker 1: think the underlying demand and fundamentals are pretty solid for

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00:24:27,480 --> 00:24:30,359
Speaker 1: the names we cover. So Shannon, going back to Tom's

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00:24:30,400 --> 00:24:34,120
Speaker 1: initial question, here, would you expect to see press releases

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00:24:34,119 --> 00:24:37,400
Speaker 1: from companies saying we are increasing our buy back, we're

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00:24:37,400 --> 00:24:39,919
Speaker 1: doing a one time buy back, or just taking a

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00:24:39,920 --> 00:24:42,120
Speaker 1: more aggressive stance, or is this just gonna be part

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00:24:42,160 --> 00:24:46,200
Speaker 1: of their existing buy back kind of strategy. I don't

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00:24:46,240 --> 00:24:49,080
Speaker 1: think at this point, um, anybody's gonna put something out

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00:24:49,080 --> 00:24:51,680
Speaker 1: because there's just too many unknowns. I mean I was

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00:24:51,720 --> 00:24:54,679
Speaker 1: talking to one executive and he basically said, if anybody

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00:24:54,680 --> 00:24:56,679
Speaker 1: tells you they know exactly what's going on, they're not

469
00:24:57,080 --> 00:24:59,800
Speaker 1: really you know, they don't really know. Um So I

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00:25:00,000 --> 00:25:01,639
Speaker 1: don't think this is the time when people step in

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00:25:01,640 --> 00:25:03,960
Speaker 1: with sort of inclemental bibact related to Corona, and I'm

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00:25:04,000 --> 00:25:07,120
Speaker 1: not sure they ever will. But you know, I think

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00:25:07,280 --> 00:25:10,119
Speaker 1: for companies that have as their amount of cash to deploy,

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00:25:10,480 --> 00:25:14,600
Speaker 1: they always use the term opportunistic. So as this thing

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00:25:14,680 --> 00:25:17,600
Speaker 1: starts to sort of settle out, I think that opportunity

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00:25:17,640 --> 00:25:20,160
Speaker 1: will probably come in and you will see some aggressive

477
00:25:20,160 --> 00:25:22,280
Speaker 1: buying depending on where we are in the quarter, because

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00:25:22,320 --> 00:25:24,080
Speaker 1: remember a lot of these companies do have to go

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00:25:24,080 --> 00:25:27,720
Speaker 1: into quiet period. You have been opportunistic. Shannon Cross, thank

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00:25:27,720 --> 00:25:30,000
Speaker 1: you so much for joining us today Cross Research. Again,

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00:25:30,040 --> 00:25:33,200
Speaker 1: we protect the copyright of all of our guests research.

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00:25:33,280 --> 00:25:36,919
Speaker 1: You can get Cross Research research from them. Shannon Cross

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00:25:36,960 --> 00:25:41,760
Speaker 1: of her own firm, and she doesn't Thanks for listening

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00:25:41,840 --> 00:25:46,400
Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews

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00:25:46,400 --> 00:25:51,639
Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

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00:25:52,200 --> 00:25:55,560
Speaker 1: I'm on Twitter at Tom Keane. Before the podcast, you

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00:25:55,560 --> 00:26:05,080
Speaker 1: can always catch us worldwide. I'm Bloomberg Radio