WEBVTT - Oil, Central Banks, Earnings, and Intel 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day, we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moving news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 0:00:17.360 --> 0:00:20.480 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:20.840 --> 0:00:23.120 Let's talk about WTI Crudo. Matt just called it at 0:00:23.120 --> 0:00:26.079 where Dan We hit eighty dollars a barrel yesterday on 0:00:26.200 --> 0:00:28.440 WTA Crude. I don't know where this is coming, so 0:00:28.520 --> 0:00:29.280 let's bring in some people. 0:00:29.320 --> 0:00:31.560 And it was fast, right. We went from seventy eighty 0:00:31.680 --> 0:00:32.199 very quickly. 0:00:32.320 --> 0:00:37.000 Exactly. We're blow sixty eight dollars in late June for 0:00:37.159 --> 0:00:38.800 w TA crude. Now here we are at eighty. Go 0:00:38.840 --> 0:00:41.920 figure Mike McLoone, though he knows what's going on. So 0:00:41.960 --> 0:00:45.080 does Fernando Valley. They are both analys covering the energy 0:00:45.159 --> 0:00:48.839 space for Bloomberg Intelligence. Hey, Mike, let's start with you. You're 0:00:48.720 --> 0:00:52.160 done in Bambi, Miami, Florida. How is it now, tough guy? 0:00:52.840 --> 0:00:55.800 It's actually cooler here than you are there. You're high 0:00:55.880 --> 0:00:59.000 yesterday ninety in the low eighties, so you got it 0:00:59.040 --> 0:01:00.040 comes out the cool op. 0:01:00.040 --> 0:01:03.200 All right, buddy. How did we get here with wtacrude 0:01:03.200 --> 0:01:04.360 oil at eighty bucks a barrel? 0:01:04.440 --> 0:01:06.280 We were at seventy at the beginning of July, so 0:01:06.360 --> 0:01:08.120 within a month we're up ten bucks. 0:01:08.560 --> 0:01:10.240 So let's look at it in the year. It's unchanged 0:01:10.280 --> 0:01:13.200 basically still actually down in the year, so it's basically 0:01:13.240 --> 0:01:15.880 bouncing from getting two over sold. But look at the 0:01:15.959 --> 0:01:18.560 macro big picture. What we did last year was one 0:01:18.560 --> 0:01:21.319 of the biggest pumps on a two year basis ever 0:01:21.600 --> 0:01:23.240 and it's in the back end of that. And the 0:01:23.280 --> 0:01:26.039 history of these things are very bad for crude oil, 0:01:26.400 --> 0:01:29.120 particularly if you have the federal reserve still tightening and 0:01:29.160 --> 0:01:32.000 disappointing data out of China. Those are current trends. So 0:01:32.000 --> 0:01:34.080 I'm still very veriss crude oil. I see it at 0:01:34.080 --> 0:01:35.880 the upper end of the range. I still think it's 0:01:35.880 --> 0:01:38.679 more likely head towards forty and right now. One key 0:01:38.720 --> 0:01:42.440 thing that's really mattering for everything and muchly all risk asses, 0:01:42.520 --> 0:01:45.520 most notably copper and crude oils. The US stock market 0:01:45.520 --> 0:01:48.640 basically has to keep going just for these markets to 0:01:48.680 --> 0:01:51.560 stay stable. So that's the problem. If stock market actually 0:01:51.640 --> 0:01:53.920 drops a little bit. These assets are probably going to 0:01:54.000 --> 0:01:56.200 continue reverting last year's pumps. 0:01:56.280 --> 0:01:59.520 So that's the trader perspective, Fernando, What do we know 0:01:59.520 --> 0:02:01.080 about and demand here? 0:02:01.640 --> 0:02:04.400 Well, on the demand side, of course, Northern Hemisphere summer, 0:02:04.640 --> 0:02:07.120 Paul's driving more to the shore. Yep, they're driving a 0:02:07.120 --> 0:02:09.960 little bit more consumption, but it's been slightly underwhelming on 0:02:10.000 --> 0:02:12.400 the last few numbers of the EIA. In July, of 0:02:12.480 --> 0:02:14.560 course you had the start of the Saudi Arabia the 0:02:14.560 --> 0:02:17.079 additional cuts that they promised in the last so Pack 0:02:17.120 --> 0:02:19.920 plus meeting, so that's probably sapping a little bit on 0:02:19.960 --> 0:02:22.680 the supply side. But when we look at the inventory figures, 0:02:22.720 --> 0:02:26.600 it hasn't changed drastically. It's really been this whole all right. 0:02:26.639 --> 0:02:29.679 We're coming to a soft landing in the economy, which 0:02:29.760 --> 0:02:32.560 Mike is just showing that the current data is not 0:02:32.600 --> 0:02:36.960 really pointing towards that direction. But there's an expectation that 0:02:37.040 --> 0:02:40.040 the soft landing is what will really put a pushes 0:02:40.080 --> 0:02:44.080 over the edge, and that's likely what's driving oil prices 0:02:44.160 --> 0:02:47.160 higher and the OPEC plus cut at least in the 0:02:47.240 --> 0:02:48.160 short term. 0:02:48.680 --> 0:02:51.200 Excellent kind of missed numbers today. How do you do 0:02:51.280 --> 0:02:53.160 that if you're an energy company, I could make money 0:02:53.160 --> 0:02:54.920 as an energy company. What happened xceon. 0:02:55.080 --> 0:02:57.720 They've made money, And to be fair, they told you 0:02:57.840 --> 0:03:00.520 they came right on in the range that they guided. 0:03:00.680 --> 0:03:02.000 Okay, four weeks ago. 0:03:02.040 --> 0:03:04.600 It's just going sense. It's a little slow to update sometimes. Okay, 0:03:04.639 --> 0:03:06.640 you know, unless they're a little stubborn, you wouldn't know 0:03:06.639 --> 0:03:11.800 anything about that. But they still generated significant free cash flow, 0:03:12.400 --> 0:03:16.079 not enough to cover their buybacks, but they generated enough 0:03:16.120 --> 0:03:18.440 free cash flow. The good thing is they came into 0:03:18.480 --> 0:03:21.959 the quarter with almost thirty three billion dollars in cash, 0:03:22.200 --> 0:03:26.200 the debt under zero point two times. It stayed at 0:03:26.200 --> 0:03:28.919 that level, so they can still get to their thirty 0:03:28.919 --> 0:03:31.440 five billion dollars of buybacks by the end of twenty 0:03:31.440 --> 0:03:35.880 twenty four. Of course, that will probably mean higher leverage 0:03:36.000 --> 0:03:37.920 unless Brent goes above eighty five. 0:03:38.240 --> 0:03:41.400 Mike, how do you play earnings as a trader or 0:03:41.440 --> 0:03:45.320 do you give us give us some trader insight for 0:03:45.320 --> 0:03:47.480 for those at home that want to play along. I mean, 0:03:47.640 --> 0:03:52.080 when an earning season comes around, usually analysts are low balling, right, 0:03:52.240 --> 0:03:54.960 but in this case is Fernando points out, they haven't 0:03:54.960 --> 0:03:57.680 caught up with the with the forecast cut that we 0:03:57.720 --> 0:03:59.360 got out of xceon how do you how do you play? 0:03:59.400 --> 0:04:01.080 Is an opportunity the earnings. 0:04:01.080 --> 0:04:04.840 Well, the key thing to remember about energy equities versus 0:04:04.960 --> 0:04:09.400 underlying energy measures as measured by the Bloomberg Energy Commodity Index, 0:04:09.600 --> 0:04:13.040 is the equities typically outperforming. That was definitely the case 0:04:13.120 --> 0:04:15.360 last year, and it's still been the case this year. 0:04:15.360 --> 0:04:17.760 The key thing is you look like the XL that's 0:04:17.800 --> 0:04:20.520 like the major ETF the tracks energy prices they're up. 0:04:20.560 --> 0:04:22.880 It's almost almost the same thing as S and P 0:04:23.000 --> 0:04:26.040 five hundred. So that's the key thing. Remember, the energy 0:04:26.080 --> 0:04:28.520 equities can create more with less every day, and the 0:04:28.560 --> 0:04:31.360 actual underlying commodities are succumbing to that, which is by 0:04:31.400 --> 0:04:33.520 the price of crudial. Now it's first traded in about 0:04:33.560 --> 0:04:35.800 two thousand and six. But the key thing I want 0:04:35.839 --> 0:04:37.679 to point out is a recent day that you mentioned 0:04:37.680 --> 0:04:40.599 supplying demand. I enjoyed putting in my energy outlook is 0:04:41.200 --> 0:04:44.039 this month the latest estimates and Department Energy is this 0:04:44.200 --> 0:04:47.440 month in July that the US is consuming about nine 0:04:47.440 --> 0:04:50.680 million barrels a day of motor fuel gasoline, which includes 0:04:50.720 --> 0:04:53.200 that's and a I know Matt loves that compared to 0:04:53.200 --> 0:04:56.480 twenty nineteen. In July, it's five percent below. And here's 0:04:56.480 --> 0:04:59.400 another statistic I really like pointing out that really accelerated 0:04:59.480 --> 0:05:02.400 is bloomb New Energy Finance point out that global EV 0:05:02.600 --> 0:05:05.919 sales are now about fifteen percent of new auto sales, 0:05:06.080 --> 0:05:09.240 compared to the same period in twenty nineteen, it was 0:05:09.320 --> 0:05:10.880 three percent. Wow, where's that going? 0:05:11.400 --> 0:05:13.760 Yeah, that's crazy. And by the way, that's only going 0:05:13.880 --> 0:05:16.760 up right, I mean, who was it? I think I 0:05:16.800 --> 0:05:19.960 was talking a fatty b roll of the IA and 0:05:20.240 --> 0:05:22.680 he said he expects it to go over twenty percent 0:05:22.720 --> 0:05:23.159 this year. 0:05:23.600 --> 0:05:25.880 So but those of us own ebs, I said, there's 0:05:25.880 --> 0:05:27.400 no way I'm going back. It's just a better way 0:05:27.400 --> 0:05:28.840 to get around, all right. 0:05:28.800 --> 0:05:31.640 Fernando, I'm gonna go ahead and disagree with you. 0:05:31.760 --> 0:05:32.000 There. 0:05:32.520 --> 0:05:37.480 There's no replacement for displacement there, Mike, So, Fernando, our 0:05:37.480 --> 0:05:39.720 good friends. Then in the Permian, I mean, in other 0:05:40.200 --> 0:05:42.280 shell areas in US, they're pumping, aren't they. 0:05:42.440 --> 0:05:45.000 Yeah, I mean, Chevron just broke their record seven hundred 0:05:45.000 --> 0:05:47.560 and seventy two thousand barrels a day in the second quarter, 0:05:47.680 --> 0:05:50.400 so they're trending towards that one million barrel a day 0:05:50.440 --> 0:05:54.240 by twenty twenty six that they aimed in excellent as well, 0:05:55.000 --> 0:05:58.479 producing significant barrels there. And I think we mentioned last time, 0:05:58.520 --> 0:06:01.320 but we think the five lar just producers in the 0:06:01.320 --> 0:06:04.280 Permian are going to account for nearly fifty percent of 0:06:04.320 --> 0:06:08.159 production by the end of the decade. That's Excellent, Chevron, Conical, Phillips, Pioneer, 0:06:08.160 --> 0:06:12.720 and Occidental. So they are growing. It's just not as 0:06:12.760 --> 0:06:15.640 fast as that was once hoped. You know, the dreams 0:06:15.640 --> 0:06:18.320 of us getting to sixteen eighteen million barrels a day 0:06:18.880 --> 0:06:20.880 are probably in the rear view mirror. 0:06:20.960 --> 0:06:22.000 So what do we do now? 0:06:22.080 --> 0:06:24.320 We do about twelve and a half, just under twelve 0:06:24.360 --> 0:06:24.760 and a half. 0:06:25.200 --> 0:06:27.480 Okay, how much do we We're net exporter. 0:06:27.160 --> 0:06:31.280 Right, yes and no, it depends because we don't have 0:06:31.360 --> 0:06:33.719 all the crews that we need, so we import some. 0:06:33.920 --> 0:06:35.160 And yes, on a net. 0:06:35.120 --> 0:06:38.719 Stait, I think I can go down to Texas, Houston, 0:06:39.480 --> 0:06:41.479 you know, raise some money from some good old boys 0:06:41.480 --> 0:06:43.720 and start putting some holes in the ground, and eighty 0:06:43.720 --> 0:06:45.279 dollars a barrel, I can make a lot of money. 0:06:45.600 --> 0:06:45.920 You would. 0:06:45.960 --> 0:06:47.280 My cost it's like forty. 0:06:47.080 --> 0:06:51.280 Right, it's it's it's forty just on the drilling side. 0:06:51.279 --> 0:06:53.000 But then you have all the I mean, you're not 0:06:53.120 --> 0:06:55.359 cheap okay, and you have to pay for you you 0:06:55.440 --> 0:06:57.880 have to pay for your CFO, you have to pay taxes, 0:06:58.440 --> 0:07:01.640 so your overall fully loaded costs are higher. 0:07:01.720 --> 0:07:02.279 Me a wildcat. 0:07:02.360 --> 0:07:04.440 And then you don't get eighty dollars, you get a 0:07:04.440 --> 0:07:06.719 discount on that. And you don't only produce oil, you 0:07:06.760 --> 0:07:07.560 produce other things. 0:07:07.640 --> 0:07:12.240 Hey, Mike, does does the SPR play any play at 0:07:12.240 --> 0:07:14.120 all into the equation here? I mean, I know that 0:07:14.160 --> 0:07:17.240 we we drained it, you know, to buy votes for 0:07:17.240 --> 0:07:20.040 the Democratic Party before the midterms, which is you know 0:07:20.120 --> 0:07:21.280 that's what the SPR was for. 0:07:21.400 --> 0:07:21.800 Nice straight? 0:07:22.040 --> 0:07:23.800 Are we gonna fill it back up? I thought the 0:07:23.840 --> 0:07:25.680 idea was we're going to do that when it was low, 0:07:25.720 --> 0:07:27.640 and it was low, and we didn't. 0:07:28.400 --> 0:07:30.760 There was no hurry to do that. If you really 0:07:30.760 --> 0:07:32.560 compare it to when I was pumping gas at a 0:07:32.600 --> 0:07:35.000 gas station in nineteen seventy nine is a gas jockey 0:07:35.040 --> 0:07:37.200 and gas price went over a dour. We had a 0:07:37.240 --> 0:07:40.880 price in half gallons because of the analog tanks couldn't 0:07:40.880 --> 0:07:43.560 do that. There is a massive excess of supply. If 0:07:43.560 --> 0:07:47.120 you look at liquid fuels of US and Canada, around 0:07:47.120 --> 0:07:49.280 four million barrels a day. For those old days when 0:07:49.360 --> 0:07:51.320 US was a net importer are over. So the only 0:07:51.360 --> 0:07:54.240 really reason you need the SPR notes for offsetting things 0:07:54.280 --> 0:07:56.520 like hurricanes and stuff, because we could ramp up that 0:07:56.880 --> 0:07:59.040 supply even more so if we want. I'm looking at 0:07:59.040 --> 0:08:02.360 liquid fuel products in his countries. Basically all new high 0:08:02.360 --> 0:08:04.760 include liquid fuels because they have to include ethnome from 0:08:04.800 --> 0:08:07.240 the farm. It's almost twenty million barrels a day. Our 0:08:07.280 --> 0:08:11.320 consumption peeked about fifteen years ago. So there's a very 0:08:11.360 --> 0:08:14.480 bad trend for prices. And that's the key thing about SPR. 0:08:14.920 --> 0:08:16.680 President Biden might go down as one of the best 0:08:16.680 --> 0:08:17.760 oil traders in history. 0:08:18.720 --> 0:08:22.000 All Right, all right, I heard it here. That's fascinating stuff. 0:08:22.040 --> 0:08:25.080 Petroleum distribution engineer, that is the term. 0:08:25.320 --> 0:08:29.400 That's what the gas jockey is. Were you pumping leaded gas? 0:08:29.600 --> 0:08:29.840 Yes? 0:08:30.720 --> 0:08:31.680 Was that leaded? Mike? 0:08:32.800 --> 0:08:35.440 I guess he's yes. Stop all right, all right, Mike mcloan, 0:08:35.520 --> 0:08:38.120 he's back at on the pump. Mike mcgloan, Fernando Valley. 0:08:38.120 --> 0:08:40.520 They cover all the energy space for Bloomberg Intelligence. They 0:08:40.520 --> 0:08:41.600 put it in perspective for us. 0:08:42.559 --> 0:08:46.400 You're listening to the Team ken'shar Live program. Bloomberg Markets 0:08:46.440 --> 0:08:49.560 weekdays at ten am Eastern on Bloomberg dot com, the 0:08:49.640 --> 0:08:52.760 iHeartRadio app and the Bloomberg Business app, or listen on 0:08:52.840 --> 0:08:54.800 demand wherever you get your podcasts. 0:08:56.559 --> 0:08:58.280 Some of these central banks share we've had a lot 0:08:58.280 --> 0:09:02.040 of activity, including the Bank at Japan today. It I mean, 0:09:02.080 --> 0:09:03.840 when I look at the ECB, when I look at 0:09:03.840 --> 0:09:07.360 the FED, it seems like they're saying we're pretty much done. 0:09:07.480 --> 0:09:08.720 Is that kind of your takeaway? 0:09:09.160 --> 0:09:11.000 Yeah, I mean we knew that we were close to 0:09:11.040 --> 0:09:13.520 the end of the cycle, so the question was always 0:09:13.880 --> 0:09:16.640 would it take another turn of the screw basically to 0:09:16.720 --> 0:09:19.120 get us into the landing zone for both the FED 0:09:19.160 --> 0:09:23.280 and the ECB. And you know, the the central banks 0:09:23.280 --> 0:09:27.840 are signaling, are reinforcing that they essentially agree with the 0:09:27.880 --> 0:09:35.400 markets that that we're near the end. I still feel that, 0:09:35.520 --> 0:09:38.240 you know, we are currently in the state of I 0:09:38.320 --> 0:09:41.880 was thinking of using the term disinflation euphoria, but I 0:09:41.920 --> 0:09:46.640 think that kind of is a little too prioritive disinflation optimism, 0:09:46.720 --> 0:09:49.160 because there is you know, there's there's a reason, there's 0:09:49.280 --> 0:09:55.480 reason for it. But broadly speaking, I think that through 0:09:55.520 --> 0:10:00.439 the course of this whole inflation cycle, the our kids 0:10:00.440 --> 0:10:04.400 and policy makers have underestimated the resilience of the economy. 0:10:04.440 --> 0:10:07.160 They sort of look through a lot of the you know, 0:10:07.240 --> 0:10:11.719 the demand driven components of inflation, and people look very 0:10:11.800 --> 0:10:15.880 much at sort of you know, the the the subcomponents 0:10:15.880 --> 0:10:18.040 of you know of inflation used card. 0:10:18.080 --> 0:10:20.640 I have no idea why economists ignore it. Seems like 0:10:21.240 --> 0:10:23.920 ignore the demand driven side of it. Yeah, I don't 0:10:23.920 --> 0:10:25.079 get why. Why is that? 0:10:25.600 --> 0:10:30.880 Yeah, I think people want to declare victory, you know, 0:10:30.920 --> 0:10:34.200 and I think policy makers, everybody wants this to be over. 0:10:34.400 --> 0:10:38.040 Well, yesterday we talked with Cam Harvey at Duke and 0:10:38.120 --> 0:10:42.040 he said, you know that the Fed's got it all wrong. 0:10:42.160 --> 0:10:45.720 It's not three percent inflation, It's like zero point one 0:10:45.760 --> 0:10:49.640 percent inflation. Like he said, the picture is completely skewed 0:10:49.640 --> 0:10:52.680 by the housing the way they calculate housing in there. 0:10:52.960 --> 0:10:54.720 And I think a lot of people agree with him 0:10:54.760 --> 0:10:58.400 that it's much lower than the FED expects. Are you 0:10:58.520 --> 0:11:01.679 worried that the FED put pushes us into a recession 0:11:01.760 --> 0:11:03.079 by hiking too much. 0:11:04.520 --> 0:11:07.359 I'm not worried that the FED pushes us into recession. 0:11:07.920 --> 0:11:12.240 I think that it will take a recession, and I 0:11:12.240 --> 0:11:16.000 don't think the FED, the FED, the ECB everybody is 0:11:16.040 --> 0:11:18.760 now managing towards growth. So this is what's new here 0:11:18.800 --> 0:11:21.160 with this inflationary cycle. As we get closer to the 0:11:21.240 --> 0:11:24.080 to the top, they're more you know, looking on a 0:11:24.120 --> 0:11:27.000 two sided view, trying to balance the soft landing that 0:11:27.040 --> 0:11:30.400 everybody's talking about. And you know, I don't want to 0:11:30.880 --> 0:11:33.640 policy error, as you know, maybe it's too easy of 0:11:33.760 --> 0:11:36.440 glib of a word to say, because I understand what 0:11:36.480 --> 0:11:41.000 they're trying to achieve here. But you know, to the 0:11:41.040 --> 0:11:46.040 extent that spot inflationary numbers are showing a disinflationary trend, 0:11:46.080 --> 0:11:51.920 I think people really underestimate the self reinforcing elements of inflation, 0:11:52.480 --> 0:11:54.439 don't I think we have, you know, I mean I 0:11:54.440 --> 0:11:56.280 don't want to sound like you know all back in 0:11:56.360 --> 0:11:59.200 my day, but I think that that that you know, 0:11:59.720 --> 0:12:02.720 the that that the global central bank community, you know, 0:12:02.760 --> 0:12:04.560 back when they did the new Framework and all that, 0:12:04.600 --> 0:12:06.720 they said, inflection, will we know how to deal with 0:12:06.760 --> 0:12:08.679 it when we see it, And you know, they were 0:12:08.760 --> 0:12:11.560 kind of caught deer in the headlights. They scrambled to 0:12:11.640 --> 0:12:15.480 catch up. But I think there's still this this this 0:12:15.600 --> 0:12:20.160 tendency to think that that to to underestimate the forces 0:12:20.200 --> 0:12:23.640 of inflation pressures once you unleash them. For example, you 0:12:23.679 --> 0:12:27.840 know the nominal spending. I mean we look in you know, 0:12:27.960 --> 0:12:30.640 corporate profits, and you look at how you have to 0:12:30.640 --> 0:12:33.200 think in nominal terms a lot here and you see, 0:12:33.400 --> 0:12:37.160 you know, the corporate America is doing well. They're still 0:12:37.160 --> 0:12:40.439 able to pass the price pricing, you know, is being 0:12:40.480 --> 0:12:44.080 passed through to the consumers. Europe is a little bit 0:12:44.080 --> 0:12:46.920 different story. We're seeing obviously more slow down in Germany 0:12:47.040 --> 0:12:50.880 in particular, but uh, they're there. I think there are 0:12:50.920 --> 0:12:55.400 two things that really stand out to me. One is 0:12:55.440 --> 0:13:01.400 that the underestimating the self reinforcing elements of inflationary dynamics 0:13:01.440 --> 0:13:04.080 once it sets in. And the other is that I 0:13:04.080 --> 0:13:09.480 think people still even today underestimate the power of the 0:13:09.520 --> 0:13:13.920 fiscal impulse that was put into the system. And economists 0:13:13.960 --> 0:13:16.080 and you know, the central bankers they don't like to 0:13:16.200 --> 0:13:19.160 especially the FED, they don't like to talk about fiscal policy, 0:13:19.280 --> 0:13:22.160 but you know, we still have you know this these it's. 0:13:21.800 --> 0:13:24.240 Too big to be left out of the station, still 0:13:24.240 --> 0:13:27.640 feeding through, it's still feeding the Paul. This morning, as 0:13:27.640 --> 0:13:29.199 I was driving to work, I was on a call. 0:13:30.400 --> 0:13:33.800 I'm driving right now, I'm driving Alfa Romeo we'll talk 0:13:33.840 --> 0:13:35.800 about that. But I was on the phone with the 0:13:35.840 --> 0:13:36.400 CEO of. 0:13:36.400 --> 0:13:38.600 Masarati apparently not paying tolls either. 0:13:38.960 --> 0:13:42.400 No, John, what do you drive? 0:13:43.080 --> 0:13:44.000 Uh? 0:13:44.320 --> 0:13:48.760 Super a super got everybody off track? 0:13:48.840 --> 0:13:52.040 Sorry, No, I was just no, No, Uh, Super is 0:13:52.080 --> 0:13:54.480 a great car. I was talking to CEO of Maserati, 0:13:54.640 --> 0:13:58.760 David de Grasso, and he said they still have inflation. 0:13:59.000 --> 0:14:02.640 They still feel it pretty strongly in their input costs, right, 0:14:03.000 --> 0:14:06.319 and so they're passing that along. To prove your point, 0:14:06.360 --> 0:14:10.400 the Maserati Gricalai Trofeo, which is a small suv, is 0:14:10.440 --> 0:14:11.920 going for over one hundred thousand dollars. 0:14:12.280 --> 0:14:15.280 Yeah, yep, which no problem for Memlania. All right. Soissan, 0:14:15.360 --> 0:14:18.760 before you were found at sgh Macroadvisors in two thousand 0:14:18.800 --> 0:14:20.800 and nine, you made your living trading currencies here. So 0:14:21.040 --> 0:14:23.840 I gotta ask you. I got the dollar down, I 0:14:23.840 --> 0:14:26.880 don't know, ten percent from its high back in the fall. 0:14:26.920 --> 0:14:27.160 Here. 0:14:27.480 --> 0:14:30.160 What you call on the dollar here? Is there a 0:14:30.160 --> 0:14:33.120 bearish call on the Dollar's just just a little trade down? 0:14:33.720 --> 0:14:36.600 No, I think there's a bearish call on the dollar. 0:14:36.720 --> 0:14:38.920 I think, as you know, I mean, it might seem 0:14:38.960 --> 0:14:41.480 at odds with the notion that we still have inflation 0:14:41.640 --> 0:14:44.560 we have more room to hike rates, but you know, 0:14:44.600 --> 0:14:46.200 we have to look at it, you know, and this 0:14:46.280 --> 0:14:48.600 is always a tricky part with currencies. You know, to 0:14:48.680 --> 0:14:50.960 have a dollar call is really you got to look 0:14:50.960 --> 0:14:53.560 at what dollar yen is kind of a different animal than. 0:14:53.400 --> 0:14:55.240 Almoly goodness what happened yesterday. 0:14:55.360 --> 0:14:59.760 But yeah, you know, I they pulled it off very nicely. 0:14:59.800 --> 0:15:01.440 I think, Yeah, the Bank of Japan, you know, they 0:15:01.560 --> 0:15:04.440 and you know, it's it's people were expecting this to 0:15:04.480 --> 0:15:08.840 be sort of a huge, you know, explosive event for markets. 0:15:08.840 --> 0:15:11.120 We had to end still in the same range that 0:15:11.160 --> 0:15:14.760 it was one forty, right, US treasure you're still under four. 0:15:14.960 --> 0:15:18.920 Yeah, And importantly, the JJB yields, you know, they they 0:15:19.040 --> 0:15:21.880 went up to like fifty six basis points and settled 0:15:21.880 --> 0:15:24.600 in like the mid fifties. So it's not like they 0:15:24.640 --> 0:15:27.800 lifted a fifty you know, fifty basis point ceiling and 0:15:27.400 --> 0:15:29.280 it went and it went to one hundred. And you 0:15:29.280 --> 0:15:31.120 know the reason is, and this is why I think 0:15:31.160 --> 0:15:34.200 you Eda did a nice job on this is that 0:15:34.280 --> 0:15:37.640 and we've kind of been flagging this that the tactical 0:15:37.680 --> 0:15:40.520 window for them to do this what was going to 0:15:40.560 --> 0:15:42.520 be at a time when there wasn't a lot of 0:15:42.520 --> 0:15:45.960 bearish pressure on global bond markets, which you know, we 0:15:46.520 --> 0:15:48.320 look at what's happening in the US and what's happening 0:15:48.360 --> 0:15:50.280 the ed to be it was a really nice window 0:15:50.320 --> 0:15:53.480 for them to sort of, uh to walk in and 0:15:53.640 --> 0:15:56.280 you know and manage it. So Dollar call, you know, 0:15:56.400 --> 0:16:00.360 I I think, you know, we're close to the end 0:16:00.400 --> 0:16:02.560 of the cycle. I don't think we're at the end 0:16:02.600 --> 0:16:04.560 of the cycle. I think we still have a couple 0:16:04.680 --> 0:16:07.560 more hikes, you know. I think we have at least 0:16:07.560 --> 0:16:10.160 one more hike left, you know, for for the fad 0:16:11.000 --> 0:16:13.520 And I sort of think that, you know, looking ahead, 0:16:13.960 --> 0:16:17.920 the central banks might need to, you know, put another 0:16:18.520 --> 0:16:21.880 turn on the screw on tightening because. 0:16:21.760 --> 0:16:23.920 Well Pal said that, he said September, he kind of 0:16:23.960 --> 0:16:25.600 warned us about September. 0:16:25.200 --> 0:16:28.680 Right, Yeah, yeah, I mean September. The market is a 0:16:28.760 --> 0:16:30.960 price to everything out you know, for the US right now. 0:16:31.040 --> 0:16:33.600 And I think that the issue with September is just 0:16:33.680 --> 0:16:37.240 that it's going to be hard for them to explain 0:16:37.440 --> 0:16:40.840 or to even want to, you know, press for a 0:16:40.920 --> 0:16:44.320 hike when you know, when when the when the inflation 0:16:44.480 --> 0:16:47.680 numbers are going to are most likely going to come 0:16:47.680 --> 0:16:49.920 in benign, you know, and markets have been expecting that, 0:16:50.080 --> 0:16:51.240 and I think there's no reason. 0:16:51.320 --> 0:16:53.320 But they can prove their point. He can say, listen, 0:16:53.480 --> 0:16:55.520 I was telling you all year, I want to get 0:16:55.520 --> 0:16:58.600 to two percent. Three percent is not good enough. Yeah, 0:16:58.800 --> 0:17:00.560 you know. Yeah. 0:17:00.600 --> 0:17:04.280 I think that's the broader point is that the both 0:17:04.280 --> 0:17:07.200 the ECB and the FAD, I think their current stance. 0:17:07.560 --> 0:17:10.399 I think the you know, putting aside the twenty twenty 0:17:10.400 --> 0:17:12.240 three numbers, if you look at kind of the twenty 0:17:12.280 --> 0:17:15.959 twenty four forecast, I think it's a little aspirational the 0:17:15.960 --> 0:17:18.800 pace at which that they expect that, you know, that inflation, 0:17:18.960 --> 0:17:22.880 the disinflationary trend is going to continue when that manifests itself. 0:17:22.920 --> 0:17:25.480 You know, I still think the UCB is going. 0:17:25.480 --> 0:17:27.920 To hike in September summer. 0:17:28.040 --> 0:17:32.760 Yeah, fun, I'm done. I'm done. I've taken a recession 0:17:32.800 --> 0:17:36.280 off the table. I'm done with rate hikes. I got 0:17:36.320 --> 0:17:39.240 earnings troughing here. I'm set up for a ripping market. 0:17:39.720 --> 0:17:40.360 That's my call. 0:17:40.400 --> 0:17:44.480 I'm still one of the problems for traders has been 0:17:44.720 --> 0:17:47.919 that I think they haven't been able to square the 0:17:48.000 --> 0:17:52.000 circle with interest rate hikes versus stock market going up. 0:17:52.080 --> 0:17:53.000 It can still happen. 0:17:53.119 --> 0:17:56.040 Yeah, all right, Sissan, thank you so much. Sassan Goa Rimani, President, 0:17:56.160 --> 0:17:59.600 CEO and founder of sg H Macro Advisors. We appreciate 0:17:59.600 --> 0:18:00.000 you coming here. 0:18:00.440 --> 0:18:03.480 You're listening to the tape. Can's our live program Bloomberg 0:18:03.600 --> 0:18:07.199 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:18:07.240 --> 0:18:10.480 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:18:10.520 --> 0:18:13.320 You can also listen live on Amazon Alexa from our 0:18:13.359 --> 0:18:19.440 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:18:18.680 --> 0:18:22.480 The Bloomberg Intelligence b I go on yourternal Bloomberg Intelligence 0:18:22.600 --> 0:18:25.680 is the biggest research department on Wall Street, and more importantly, 0:18:26.400 --> 0:18:28.720 I believe the best research department on Wall Street. So 0:18:28.760 --> 0:18:31.480 we have access to all their analysts, including Matt Hendrickson. 0:18:31.520 --> 0:18:35.200 He's a senior Ecura analyst covering medical technology. He joins 0:18:35.240 --> 0:18:37.600 us here in our Bloomberg Interactive Broker Studio. And one 0:18:37.600 --> 0:18:39.640 of the things we like about our BI analysts often 0:18:39.680 --> 0:18:42.200 bring us companies that we never would have thought about, 0:18:42.359 --> 0:18:45.320 never would have really you know, think of as an investment. 0:18:45.320 --> 0:18:49.359 But here's dex Com. D x CM is a symbol. 0:18:49.560 --> 0:18:51.840 This is a fifty billion dollar market cap. Stock hit 0:18:52.000 --> 0:18:55.960 fifty two week high today, it's up twenty one percent. Matt. 0:18:55.960 --> 0:18:58.840 What is Dexcom and what's going on with this stock today? 0:18:59.160 --> 0:19:03.280 Yeah, SOX makes what they're called cgms. It's that's short 0:19:03.320 --> 0:19:07.960 for continuous glucose monitors, And basically this technology is replacing 0:19:08.200 --> 0:19:11.000 what is antiquated, which is fingersticks, which is you have 0:19:11.080 --> 0:19:14.600 to prick your finger three or four times a day 0:19:14.640 --> 0:19:15.800 to get your glucose reading. 0:19:15.880 --> 0:19:17.560 Wasn't there a company that kind of did that a 0:19:17.560 --> 0:19:19.160 little bit of their nose or something. 0:19:19.720 --> 0:19:24.880 Oh, that's a that's a different story, but the same thing. 0:19:24.760 --> 0:19:27.560 Though, prick your finger, get four ings a day, that's antiquated. 0:19:27.600 --> 0:19:31.120