Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm term Keene Jay Leye.
Speaker 1: We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. We
Speaker 1: start this program though, by getting Jordan Rochester on the
Speaker 1: phone the mare a gtain effects strategist to Maura, and
Speaker 1: Jordan's walk me through the house view right now for
Speaker 1: how these kind of shocks are going to roll through
Speaker 1: asset classes, roll through markets in the coming weeks. Hi, John,
Speaker 1: It's it's not going to be fun and I hate
Speaker 1: to be the pair of bad news, but there is
Speaker 1: a lot going on in terms of equity markets. It's
Speaker 1: huge moves and that's feeding through to foreign exchange markets
Speaker 1: in weird, wonderful and slightly confusing ways. So where do
Speaker 1: I start. First, of all, equities were in a world
Speaker 1: of their own for the past couple of weeks. We
Speaker 1: have been watching the situation in China, the rally and
Speaker 1: fixed income, the sell off in commodities, but the equity
Speaker 1: market was making fresh eyes. So we're seeing that corrections
Speaker 1: coming back down to where it should be. And I've
Speaker 1: got these charts on my screen which show me how
Speaker 1: U S equities trade versus growth expectations, and the same
Speaker 1: for Europe. And we've seen sell offs in both markets,
Speaker 1: of course, so they're coming back down towards Earth. The
Speaker 1: US markets have corrected more than the European ones, and
Speaker 1: I think there is actually still more room to go
Speaker 1: because what we're not used to is a supply shock
Speaker 1: of this magnitude if it escalates. We're used to Donald
Speaker 1: Trump being able to do a Phase one deal with China,
Speaker 1: the FED cutting rates and solving the issue with credit
Speaker 1: markets and resolving financial conditions. Supply shocks are very hard
Speaker 1: for central bankers or even policy makers to solve. So
Speaker 1: that's why you're seeing the moves in markets here, and
Speaker 1: it's going to take time, and time will be painful.
Speaker 1: When it comes to the European market, they won't have
Speaker 1: as much flexibility when it comes to rate cuts like
Speaker 1: the ECB. The ECB it has about ten basis points
Speaker 1: of rate cuts they could do. They could maybe do
Speaker 1: quanta to be easing again, but they're already doing it.
Speaker 1: So for me, I think the currency rising today is
Speaker 1: just absolute bonkers. And I think that this is something
Speaker 1: that needs to correct weaker euro and eventually stronger dollar.
Speaker 1: But what's going on, guys, is when you've got big
Speaker 1: moves like list and equities, you've got investors repatriating their money,
Speaker 1: and you have seen those qui outflows drive the U euro.
Speaker 1: Hire here as that money is coming back home, Jenn,
Speaker 1: I want to point out we are nine point zero
Speaker 1: two correction, like we're almost to the cusp of an spres.
Speaker 1: We're close to ten percent over in Germany on the
Speaker 1: equity benchmark in Frankfurt, Jordan, let's talk about the euro
Speaker 1: repat training cash. Are we starting to see some end
Speaker 1: type qualities to the single currency? There is, John m
Speaker 1: I was mentioning it before. So we saw contate of
Speaker 1: easing into a fifteen, and we had extensions, we had
Speaker 1: slowed downs, and we're back in the same game again.
Speaker 1: And when you've got buns at negative yields, they you
Speaker 1: saw massive outflows into US assets, into emerging market assets.
Speaker 1: So what's going on is European investors have got all
Speaker 1: these assets abroad and now having fun redemptions, and so
Speaker 1: they because the risk off tends to see sellers. So
Speaker 1: you're seeing those fun redemptions mean that they have to
Speaker 1: bring that money home and convert it back into Euros. Now,
Speaker 1: this is a flow which is very hard to predict.
Speaker 1: It's very hard to trade, and timing it to be
Speaker 1: very difficult. I think once it does settles, and I
Speaker 1: think if we see a bit of stability, will then
Speaker 1: go back to euro being much more exposed to what's
Speaker 1: going on in China and also the situation escalating in
Speaker 1: Milan as well. So I think short term this is
Speaker 1: what's driving you are higher, but I'm not chasing it,
Speaker 1: and I do think that the currency will come under
Speaker 1: pressure because guys, I think by the end of this
Speaker 1: year we're all gonna be experts in credit risks again.
Speaker 1: We've been so used to rates rallying, ECB easing rates
Speaker 1: for everybody um that we've kind of neglected the credit
Speaker 1: risks that have been building out there. And if we
Speaker 1: have a hit to growth like this, and if the
Speaker 1: lockdowns and the virus spread goes into Q two, maybe
Speaker 1: even we're still here in June talking about it, then
Speaker 1: credit risks will be on everyone's minds when we talk
Speaker 1: about credit risks. Jordan, it seems to be a race
Speaker 1: to the bottom. I was struck by the idea that
Speaker 1: the dollar is actually weakening versus certain Asian currencies because
Speaker 1: people are now treating their focus on the potential for
Speaker 1: the coronavirus to spread in the United States and for
Speaker 1: that not being fully priced in. I mean, yes, the
Speaker 1: euro is expected to weaken more, But how vulnerable is
Speaker 1: the US here given the fact that a lot of
Speaker 1: people viewed it as immune from some of the worst
Speaker 1: impacts here. Yeah, the U S exty market have been
Speaker 1: the safe haven of ecty markets in the world thanks
Speaker 1: to all those share by backs. You guys have been
Speaker 1: enjoying UM. And also you always had the FED rate
Speaker 1: cutting rates as your backup, and the market is now
Speaker 1: pricing that in and you've got a pro We see
Speaker 1: further pricing of that to come. However, let's think more
Speaker 1: about the end game. Most of the world capital is
Speaker 1: still between the New York to Boston corridor. When I
Speaker 1: look at all of my country's I track the biggest
Speaker 1: holders outside of the residents of those countries of equities
Speaker 1: for example, UK eputies, European equities, the US. So if
Speaker 1: everyone's going to repat your eight, the biggest flow is
Speaker 1: going to be back into dollars. Now. It's not going
Speaker 1: to be like the global financial crisis because back then
Speaker 1: there was very little foreign exchange hedging. We've had much
Speaker 1: higher FX hedging ratios. So the impact on the currency
Speaker 1: maybe a lot less than what we saw in the
Speaker 1: Panics of two thousands, seven and eight. Jordan, give us
Speaker 1: some point here and Dolla Yan, what is your adjusted
Speaker 1: target now for dollah Yan? Well, look, we had had
Speaker 1: this big outflow from Japan just the other week. We
Speaker 1: had that push up to one well and dolli and
Speaker 1: that was driven and buy pension flows. Our guys still
Speaker 1: think that will matter um and so we're not chasing
Speaker 1: the yen strength here. But if we start to see
Speaker 1: signs of the Tokyo Olympics being canceled, we're looking out
Speaker 1: for that risk. Maybe something to talk about more in May.
Speaker 1: I think yen still trades like a safe haven tom
Speaker 1: and so at some point there might be some yen strength.
Speaker 1: Are you are you being we're not chasing? Is there
Speaker 1: a big figure play here on Euro? Then? I mean
Speaker 1: within all these huge flows, these titanic moments we're talking about,
Speaker 1: is there like five big figures in Euro one way
Speaker 1: or the other absolutely. I think essentially once we get
Speaker 1: over Friday, so tomorrow's month end, and we're going to
Speaker 1: see some dollar buying. I think when we see those
Speaker 1: flows because of what's been going on, I think Monday
Speaker 1: we come back to work, euros lower and we're tracking
Speaker 1: more towards one oh six one oh seven again over
Speaker 1: the next month. We'll hold you to that. Jordan's great
Speaker 1: to catch out with you, Jordan Rochester. Hopefully we'll catch
Speaker 1: out with him in the next couple of weeks. Now
Speaker 1: More's g said effect strategists. We are committed, folks to
Speaker 1: giving you the best conversations we can from medical professionals. John.
Speaker 1: If you go down fifth even or you know there's
Speaker 1: well you see so many benefactors of Wall Street Mr. Travis,
Speaker 1: Mr Icon and others that have put money where Hope
Speaker 1: and Mouth is in build a first class, world class
Speaker 1: medical set of institutions. Adam Bernheim is with Mount Sinai
Speaker 1: and they own the high ground on medical engineering. Biomedical
Speaker 1: engineering in his case is a study of lungs. He
Speaker 1: is one of the best in the world at these
Speaker 1: viruses and what they do to our lungs. He's a
Speaker 1: cardio thoracic radiologist. I'm really happy to say on this program,
Speaker 1: we've made such a big effort over the last couple
Speaker 1: of weeks, the last few months to really focus on
Speaker 1: leaving the medical issues to the medical professionals. Professionals. Doctor,
Speaker 1: is fantastic to have you with us on the program.
Speaker 1: Something I don't think has done, or a lot of
Speaker 1: people haven't done a good enough job of, is talk
Speaker 1: about the differences between coronavirus, other viruses, other flus. Take
Speaker 1: me inside the body, inside the chest, inside the lungs,
Speaker 1: the pictures that you've seen, Why is this so different?
Speaker 1: Thank you very much for having me. It's a pleasure
Speaker 1: to be here. When we first started looking at scans
Speaker 1: and patients with coronavirus infection from China, we didn't know
Speaker 1: what to expect because this is a new diagnosis that
Speaker 1: we were describing for the first time. But as we
Speaker 1: categorically went through hundreds of cases, we're able to recognize
Speaker 1: clear patterns that were emerging. Importantly, the way that the
Speaker 1: lung was infect affected included lesions that had a predilection
Speaker 1: for a certain area in the lung. They often had
Speaker 1: a certain shape, and certain other imaging characteristics that were suggestive. Notably,
Speaker 1: there are other factors and features on the scans that
Speaker 1: were absent that are found in other infections. For example,
Speaker 1: patients with other pneumonias often have fluid outside the lungs,
Speaker 1: lymph node enlargement, nodules, cavitation which means air cavities within
Speaker 1: the legion, or calcification. These were actually notably absent in
Speaker 1: all of the patients that we went through, So that's
Speaker 1: really helpful for distinguishing disinfection from other infections, including other
Speaker 1: viral infections like influenza. No one single case is one accurate,
Speaker 1: but if there are enough features on any on a scan,
Speaker 1: an index of suspicion is elevated. There are enough features
Speaker 1: that we can be that there are certainly very strongly suggestive,
Speaker 1: and I think that's one of the reasons that radiologists
Speaker 1: and cat scans have emerged as foundational and the algorithm
Speaker 1: of diagnosis of these patients. Dr Bernheim, that's an excellent
Speaker 1: synopsis of the diagnostic developments here. How nations are looking
Speaker 1: to identify coronavirus cases, but how does that translate over
Speaker 1: to the potential remedies and how easy or difficult it
Speaker 1: is to actually cure these cases. I think one of
Speaker 1: the keys is just limiting its spread. So I think
Speaker 1: as a radiologist and one of the key ways that
Speaker 1: we can be huffle is to ensure prompt diagnosis. So,
Speaker 1: for example, one of our findings was that patients very
Speaker 1: early on after symptom onset, if they had a camp
Speaker 1: skin it was negative actually about half of the time,
Speaker 1: and that's important to know that there could be false negatives,
Speaker 1: particularly very early in the disease, so that patients shouldn't
Speaker 1: be taken off isolation. In terms of combating the epidemic
Speaker 1: on a larger global scale and treatment, I think the
Speaker 1: best way is really preventing its spread. So if we
Speaker 1: have patients that may be suspected of having infection, it's
Speaker 1: really helpful to know that we can make a diagnosis
Speaker 1: as early as possible, which is certainly helpful for that
Speaker 1: individual patients, so we can start treatment as early as possible,
Speaker 1: but it's also necessary for a greater public health perspective
Speaker 1: to ensure that patient does remain isolated and will not
Speaker 1: transmit the disease to others. Donctor, you would have heard
Speaker 1: people make the comparison to the seasonal flu many many
Speaker 1: times over the last couple of months. And a question
Speaker 1: I've had for quite a while and I'd love to
Speaker 1: put to you, is why this particular coronavirus requires such
Speaker 1: a huge containment effort to degree that China and others
Speaker 1: are taking it. Why is that the case? The flu
Speaker 1: has some similarities to coronavirus, but also some differences Influenza
Speaker 1: the flu in itself is a very deadly disease that
Speaker 1: is killed about sixteen thousand people already in this year's
Speaker 1: season and hospitalized almost three hundred thousand. So influenza and
Speaker 1: its own right is certainly a very serious infection. However,
Speaker 1: COVID nineteen are coronavirus infection now is concerning in other ways.
Speaker 1: For example, the mortality of an infected patient is actually
Speaker 1: quite a bit higher than influenza. So, for example, the
Speaker 1: chance of any given patient passing away from suluenza infection
Speaker 1: is about point one percent, but the mortality rate here
Speaker 1: is twenty times that about two. That's one feature that's
Speaker 1: different and another, and I think one of the concerns
Speaker 1: is that there's a large percentage of the patients that
Speaker 1: actually have very mild symptoms about of COVID nineteen cases
Speaker 1: are actually patients that have very mild, non specific symptoms,
Speaker 1: perhaps some fever and a cough, shortness of breath and
Speaker 1: little more than that. And there are many that are
Speaker 1: actually asymptomatic for a very long time before the manifest symptoms.
Speaker 1: So one of the concerns and one of the distinguishing
Speaker 1: from influenza, is that you have patients that have sometimes
Speaker 1: no or mild nonsphysics symptoms and are easily transmitting the
Speaker 1: disease to others. Dr Bernhind, you have a good knowledge
Speaker 1: or understanding of the age distribution effect of this virus.
Speaker 1: The bar charts are simplistic. Everybody over eighties in trouble.
Speaker 1: Enlighteness on how you go down to the younger patients
Speaker 1: on that, that's a really interesting question that we're looking at,
Speaker 1: and you're right. Early investigators have noted a higher mortality
Speaker 1: in older patients and those with pre existing lung disease
Speaker 1: like emphysema or fibrosis, and also mail seems to be
Speaker 1: affected a little bit more as well. One of the
Speaker 1: things that we found that was really striking is that
Speaker 1: pediatric patients were characteristically very unaffected. In other words, even
Speaker 1: the patients that even kids that were positive for the
Speaker 1: coronavirus very often had normal CT scans, which is something
Speaker 1: that's uh, not something we necessarily expected. Oh, we have
Speaker 1: ten more questions in no time. Dr Bernheim, thank you
Speaker 1: so much for joining us today with Mount sign A Hospital.
Speaker 1: We look forward to speaking to you again as soon.
Speaker 1: Adam Bernheim abount uh sign Hi, that's just extraordinary. Let's
Speaker 1: bring in Patrick now, Patrick Armstrong Flaim Wealth ce io. Patrick,
Speaker 1: interested to find out what you've been doing in the
Speaker 1: market of the last couple of weeks. What kind of
Speaker 1: moves have you've been making. We've not been doing a
Speaker 1: huge amount, despite a huge amount of volatility, really because
Speaker 1: we were defensively positioned, so we were quite frustrated when
Speaker 1: everything was moving higher together earlier in the year, and
Speaker 1: quite comfortable with our positioning right now at the margins.
Speaker 1: We've been moving away from some sequality and equities. We
Speaker 1: sold air Bus Um yesterday. We bought some alphabet Google. Basically,
Speaker 1: we think Cloud's not going to be impacted by the virus.
Speaker 1: People stay at home, watch YouTube, search will continue to
Speaker 1: do well. So we're looking for companies that have a
Speaker 1: lot of cash, not in new and to the virus
Speaker 1: by the means, but not going to be severely impacted.
Speaker 1: To be clear that, Patrick, you are starting to put
Speaker 1: capital to work then in more offensive areas of the market.
Speaker 1: Would that be a correct a correct observation of what
Speaker 1: you're doing. Sorry, you're just cut out for a second.
Speaker 1: That's okay, Patrick, I'm just wondering if you are starting
Speaker 1: to put fresh capital into more offensive parts of the
Speaker 1: market given the sell off that we've seen over the
Speaker 1: last couple of weeks. Not really so adding off about
Speaker 1: something we did. Um, it's a great company obviously, but
Speaker 1: still not cheap we I think the next move I'm
Speaker 1: going to make is actually selling out of some of
Speaker 1: my treasury positions and moving into the shorter end of
Speaker 1: the old curve, so that that's not really an offensive move.
Speaker 1: But I do think pricing in secular stagnation and that
Speaker 1: you're going to have a sharp hit to the economy
Speaker 1: from this. But twelve months from now, very confident what
Speaker 1: what level of yields is sort of the trigger point
Speaker 1: for you to sell. I've been thinking about it for
Speaker 1: the as few days, and we'll probably pull the trigger today.
Speaker 1: Even the levels now, it's very hard to see how
Speaker 1: when you get a dividend yield on the SMP five
Speaker 1: hundred of one point nine percent versus a ten year
Speaker 1: yield at one point to five and thirty year yield
Speaker 1: one seven, it's I'd rather have equities for the long term.
Speaker 1: Short term, there's a lot of momentum behind bonds and
Speaker 1: a lot of negative momentum on equities. I'm not ready
Speaker 1: to really make a big position on equities yet because
Speaker 1: I still think they're expensive, but I do think the
Speaker 1: bond rally has probably gone too far. Your thoughts one
Speaker 1: final question, your thoughts on financials right now? And not
Speaker 1: talked about the banks, but they've got to deal with
Speaker 1: this unique yield market, don't they. Definitely, And we've owned
Speaker 1: the banks in Europe in the past, and that's been
Speaker 1: a mistake we made. When I was Bush on the banks,
Speaker 1: I expected the ECB to get rates towards zero, and
Speaker 1: I really think that's the catalyst. Don't need to get
Speaker 1: back into that. The negative interest rate engine is such
Speaker 1: a headwind. Unless there is a wave of consolidation in Europe,
Speaker 1: that would also be good news for the banks, but
Speaker 1: you have to allow employees to be fired for that
Speaker 1: to work. Too short of visit Patrick Armston, Thank you
Speaker 1: so much, Plurimi Capital in London joining us. If you
Speaker 1: are in the tech stocks, I will just say flat out,
Speaker 1: this is your interview of the day. She's Shannon Cross
Speaker 1: of Cross Research. She's not like some ginormous uh name
Speaker 1: out there where she's like doing the media trial. And
Speaker 1: we're thrilled to get her on today because she uh
Speaker 1: sticks to her clients and attention of her clients out
Speaker 1: of Berkeley political economics, and she does prodigious tech research.
Speaker 1: Have you changed Shannon your by hold cell on the
Speaker 1: big thing tech names? You know, I haven't. Um, here's
Speaker 1: the interesting thing, whether it's Microsoft or Apple or even
Speaker 1: best by just and I don't cover best Buy, but
Speaker 1: I was just listening to their earnings called. You know,
Speaker 1: everyone at this point continues to say that underlying demand
Speaker 1: remains strong. So yes, the supply chain is interrupted, but
Speaker 1: all of these companies continue to believe that this will be,
Speaker 1: you know, a relatively relatively short term issue. Um. Right now,
Speaker 1: the biggest challenge is getting employees back to the factories
Speaker 1: in China, and you know, it sounds like some of
Speaker 1: the factories are starting to come back online. Clearly you know,
Speaker 1: it seems to be spreading, so we'll have to see
Speaker 1: what that does over time. But you know, demand is
Speaker 1: demand is still there. What do the companies you follow
Speaker 1: do with there once in a century levels of cash?
Speaker 1: I mean, if there were opportunities seven weeks ago, some
Speaker 1: of these stocks are down bear market. Is this where
Speaker 1: we finally see them deploy cash? Well, you know, it
Speaker 1: will be interesting. I mean from an M and A perspective,
Speaker 1: we'll see where things things play out. I mean we've
Speaker 1: been teen HP and Xerox, and obviously that transaction is
Speaker 1: one where Xerox is looking on putting a ton of
Speaker 1: leverage onto the combining company, which frankly doesn't seem particularly
Speaker 1: smart at this point in time. But the ones that
Speaker 1: have a lot of cash, I mean, I would assume
Speaker 1: Apple is going to be out very aggressively buying backstock.
Speaker 1: You know, HP will They just announced a fifteen billion
Speaker 1: dollar share repurchase program. So as soon as they sort
Speaker 1: of get through some of the Xerox tender offer prohibitions
Speaker 1: about buying, they will be you know, and others as well,
Speaker 1: being Microsoft too, So I think, you know, companies are
Speaker 1: going to be smart about this. I don't think they're
Speaker 1: going to overreact. I think the ones I've talked to
Speaker 1: in the management that most of them are being very
Speaker 1: prudent about looking at it. They're protecting their employees, they're
Speaker 1: protecting their partners, and they're assuming that this is going
Speaker 1: to be short term. And again they keep pointing to
Speaker 1: the fact that demand remains very solid. Market negative four
Speaker 1: seventy seven Paul Apple on a weekly chart negative. Yeah, exactly, Shannon.
Speaker 1: You know, we're so happy to have you on here
Speaker 1: because we're you know that Microsoft News just kind of
Speaker 1: added onto the Apple News again, pulling back revenue guidance
Speaker 1: or adjusting revenue guidance. UM. At this point, is it
Speaker 1: primarily a supply chain issue for the tech companies throughout
Speaker 1: the tech stack or is there also, you know, some
Speaker 1: demand issues. I know you mentioned that the companies are
Speaker 1: still talking about good underlying demand, But are they seeing
Speaker 1: canceled orders and mean that type of thing, or is
Speaker 1: this just supply chain not yet I mean, and you know,
Speaker 1: no canceled orders that I've heard of yet. I mean,
Speaker 1: it's it's supply chain. Obviously, sales in China are going
Speaker 1: to be weak this quarter. UM, But you know, I
Speaker 1: think you can not that it's going to make up
Speaker 1: for it, but Apple, for instance, will sell more services
Speaker 1: and I've had sales appaired to be pretty strong because
Speaker 1: people are going to remote um you know, remote learning
Speaker 1: and remote working. Uh, you know, I think that what
Speaker 1: I've heard is it's literally getting the people to the
Speaker 1: factories because obviously transportation and in sorry in China has
Speaker 1: been um impacted, and then you know, people have to
Speaker 1: be quarantined when they get there to make sure they
Speaker 1: don't have the virus, and getting the of factories up
Speaker 1: and running. Um. Interestingly, what I've been told, and I
Speaker 1: some somehow question it, but it's what I've been told
Speaker 1: by several people is that shipping has not been a
Speaker 1: particular issue. So and even access to a lot of
Speaker 1: components haven't been necessarily the issue. It's been the people issue. So, Shannon,
Speaker 1: are the companies that you chat to, are they saying, hey,
Speaker 1: once this passes in China particular, and maybe there's some
Speaker 1: evidence that maybe it's peaking there, that we can ramp
Speaker 1: up quickly and this might be a one quarter type
Speaker 1: issue for them, or this might drag on throughout the year.
Speaker 1: You know, they're there at this point a lot of
Speaker 1: them were saying, look, it will be you know, if
Speaker 1: we can get back to a percent utilization of the
Speaker 1: factory by the end of March, then you know things
Speaker 1: should be good for a second quarter. It might be
Speaker 1: a little optimistic. I mean, you know, we'll see how
Speaker 1: how long it takes to ramp. I mean, I've heard
Speaker 1: from companies that they have some factories that are basically
Speaker 1: making nothing and some factories that are running in a
Speaker 1: dent um. So that's not really helpful, right, but you know,
Speaker 1: it's it's kind have along the spectrum um I would
Speaker 1: I would say, as long as this doesn't expand and
Speaker 1: start hitting economies, you know, and then you know, consumer
Speaker 1: confidence than all of that that you can you can
Speaker 1: kind of get back to normal. I think, you know,
Speaker 1: companies like Apple can probably go a bit above a
Speaker 1: hundred percent in terms of bursts in their factories to
Speaker 1: try to make up for channing Cross with us with
Speaker 1: a Cross research. We do this with another day to
Speaker 1: check negative five Dow right now twenty six thousand and
Speaker 1: four sixty two sixty six points on the standard three
Speaker 1: zero five one and the vix Paul and I've been
Speaker 1: watching carefully from a twenty eight level up to thirty
Speaker 1: two point seven four. I don't have the chart in
Speaker 1: front of that. Maybe a high more sphear laden fix
Speaker 1: of the day up five point one eight big figures
Speaker 1: two year yield bottoms out low yield for the day
Speaker 1: one point zero six one. To be clear, that's a
Speaker 1: bid to note prices price up, yield down uh tenure
Speaker 1: yield and Paul, I'm sorry, oil is my mint of
Speaker 1: the day, if you will, Oil forty six nine down
Speaker 1: two dollars forty four since and there's just simply no bid.
Speaker 1: There's no best Texas in me absolutely, Tom Shannon, I
Speaker 1: know you spent a lot of time talking to institutional investors. Um,
Speaker 1: what do you sense they're doing. Are they taking this
Speaker 1: as an opportunity to add to some of their best
Speaker 1: high conviction tech names, or are they just saying this
Speaker 1: is beyond kind of this is not in our model. Well,
Speaker 1: I think initially they were saying this is not in
Speaker 1: our model. We're going to look through that. You know,
Speaker 1: obviously that was about ten ago, so we can we
Speaker 1: can get past those comments. I think at this point
Speaker 1: they are starting to look at you know, I talked
Speaker 1: to a number of people in Microsoft yesterday, for instance,
Speaker 1: and they're saying, look, this is you know, a part
Speaker 1: of their business. Um, it will impact this quarter and
Speaker 1: maybe a little bit next quarter, but the core underlying um,
Speaker 1: you know, Fundamentals and Microsoft are very strong, and so
Speaker 1: I think some of those names they're they're kind of
Speaker 1: trying to start adding to. I assume people will start
Speaker 1: taking up Apple at some point. But you know, there's
Speaker 1: that old adage about you know, not not catching a
Speaker 1: falling knife. Um, so I think some people are sort
Speaker 1: of just sideline point. I'm glad you mentioned that let's
Speaker 1: go stochastic. We can do that with Shannon Cross the
Speaker 1: great chart idea of catching a falling knife in the
Speaker 1: dark leads to guessing single data points on a chart. Okay,
Speaker 1: we're not going to do that. We're gonna look at
Speaker 1: the opposite, which is not stochastic, but trend. Shannon, if
Speaker 1: you if you were, you know not, you know, there's
Speaker 1: only just me and Paul listening. But Shannon, if you
Speaker 1: were to establish a trend for the names you follow,
Speaker 1: am I clear that that trend is still up? From
Speaker 1: a yes, I think from a long term perspective, Look,
Speaker 1: people there are underlying I don't know, changes in business
Speaker 1: that are going on. People are moving to the cloud,
Speaker 1: people are you know, moving to edge computing. We will
Speaker 1: eventually we have five G there's gonna be a lot
Speaker 1: of data that's going to be crunched. I mean, you know,
Speaker 1: technology is not something that's you know, going the way
Speaker 1: of the buggy whip. I mean, it's it's definitely where
Speaker 1: people are going to be in investing. And again, the
Speaker 1: economies were strong going into this. So assuming this is,
Speaker 1: you know, something that sort of plays itself out through
Speaker 1: I don't know early summer. I haven't know. I'm not
Speaker 1: a doctor, I don't know, but you know, it's I
Speaker 1: think the underlying demand and fundamentals are pretty solid for
Speaker 1: the names we cover. So Shannon, going back to Tom's
Speaker 1: initial question, here, would you expect to see press releases
Speaker 1: from companies saying we are increasing our buy back, we're
Speaker 1: doing a one time buy back, or just taking a
Speaker 1: more aggressive stance, or is this just gonna be part
Speaker 1: of their existing buy back kind of strategy. I don't
Speaker 1: think at this point, um, anybody's gonna put something out
Speaker 1: because there's just too many unknowns. I mean I was
Speaker 1: talking to one executive and he basically said, if anybody
Speaker 1: tells you they know exactly what's going on, they're not
Speaker 1: really you know, they don't really know. Um So I
Speaker 1: don't think this is the time when people step in
Speaker 1: with sort of inclemental bibact related to Corona, and I'm
Speaker 1: not sure they ever will. But you know, I think
Speaker 1: for companies that have as their amount of cash to deploy,
Speaker 1: they always use the term opportunistic. So as this thing
Speaker 1: starts to sort of settle out, I think that opportunity
Speaker 1: will probably come in and you will see some aggressive
Speaker 1: buying depending on where we are in the quarter, because
Speaker 1: remember a lot of these companies do have to go
Speaker 1: into quiet period. You have been opportunistic. Shannon Cross, thank
Speaker 1: you so much for joining us today Cross Research. Again,
Speaker 1: we protect the copyright of all of our guests research.
Speaker 1: You can get Cross Research research from them. Shannon Cross
Speaker 1: of her own firm, and she doesn't Thanks for listening
Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews
Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.
Speaker 1: I'm on Twitter at Tom Keane. Before the podcast, you
Speaker 1: can always catch us worldwide. I'm Bloomberg Radio