WEBVTT - Fed, Deere, US Steel, Vivek Ramaswamy, and Gambling.com Group 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 0:00:17.400 --> 0:00:20.520 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:21.040 --> 0:00:23.760 Let's go to Ira Jersey. He covers all the interest 0:00:23.840 --> 0:00:27.040 rates stuff for Bloomberg in intelligence. 0:00:27.120 --> 0:00:27.360 Ira. 0:00:27.560 --> 0:00:29.200 You know me, I try to stay away from that 0:00:29.240 --> 0:00:31.640 whole interest rate thing, the whole yield curve discussion. You 0:00:31.680 --> 0:00:33.760 don't want me anywhere near that. But I guess what 0:00:33.840 --> 0:00:36.640 I'm hearing today and over the last couple of days 0:00:36.680 --> 0:00:40.920 is higher for longer for US interest rates. Is that 0:00:40.960 --> 0:00:42.040 what the market's telling. 0:00:41.840 --> 0:00:45.440 You, Well, it's not so much the higher, it's more 0:00:45.560 --> 0:00:48.479 the stay high for longer. So the story really that 0:00:49.280 --> 0:00:52.000 we've been pricing the last couple of days, and we're 0:00:52.000 --> 0:00:55.600 talking about very short term, is the idea that the 0:00:55.600 --> 0:00:57.920 Federal Reserve is not going to be cutting interest rates, 0:00:58.000 --> 0:01:00.480 you know, maybe even into the second half of next year. 0:01:01.240 --> 0:01:03.520 So although we you know, we're still pricing for some 0:01:03.600 --> 0:01:06.960 probability of a hike later this year. The more important 0:01:06.959 --> 0:01:09.440 thing is that we're starting to price out cuts, and 0:01:09.560 --> 0:01:12.600 pricing out cuts is you know, in my opinion, that's 0:01:12.600 --> 0:01:15.360 what the FED is really needed to try to try 0:01:15.360 --> 0:01:17.600 to convince the market of for a long time, because 0:01:18.280 --> 0:01:20.320 the fact that you were pricing in cuts just means 0:01:20.319 --> 0:01:22.800 that the market was was that And if you look 0:01:22.840 --> 0:01:26.160 at equities or credit, markets have just gotten easier and 0:01:26.200 --> 0:01:28.959 financial conditions have eased because people thought that the FED 0:01:29.040 --> 0:01:31.320 was going to be early in cutting rates. And if 0:01:31.319 --> 0:01:33.920 they're not going to cut rates early, then that's just 0:01:33.959 --> 0:01:35.679 as good as hiking. 0:01:36.160 --> 0:01:39.440 Isn't it. I mean, we're getting close to great financial 0:01:39.480 --> 0:01:43.559 crisis levels on rates. How high did we go back 0:01:43.640 --> 0:01:46.280 then on a ten year on the thirty year ioerd 0:01:46.319 --> 0:01:50.600 because that was like the sky is falling and it 0:01:50.600 --> 0:01:52.559 doesn't feel like that at all right now. 0:01:53.720 --> 0:01:56.080 Well, if you're talking about the financial crisis in two 0:01:56.080 --> 0:01:58.280 thousand and seven, eight, you know, when we go back 0:01:58.280 --> 0:02:01.400 to the early two thousands, whereasically back to those levels 0:02:01.480 --> 0:02:05.680 on a lot of the curve, you know after two 0:02:05.720 --> 0:02:07.960 thousand and seven, you know, this is the first time 0:02:07.960 --> 0:02:11.120 we've seen rates basically in the last fifteen years anywhere 0:02:11.160 --> 0:02:14.720 close to these kinds of levels, particularly in the front 0:02:14.800 --> 0:02:15.360 end of the curve. 0:02:16.480 --> 0:02:20.240 It's very isn't that crazy? Ira, Like two thousand and seven, 0:02:20.320 --> 0:02:24.320 two thousand and eight, we barely got above five percent 0:02:24.400 --> 0:02:27.360 on the tenure, right, And that was when like, if 0:02:27.400 --> 0:02:30.320 the TARP vote didn't pass, the United States was going 0:02:30.400 --> 0:02:32.720 to fail as a country. Like, how come were that 0:02:32.840 --> 0:02:33.880 level now? 0:02:34.520 --> 0:02:38.760 Well, mainly because we're in much different inflationary dynamics now 0:02:38.800 --> 0:02:41.080 than we were back then, Right, so we have to 0:02:41.120 --> 0:02:44.880 have a monetary policy that's ultimately going to be more 0:02:44.960 --> 0:02:48.240 restrictive than it was back during the financial crisis. So 0:02:49.160 --> 0:02:51.080 you know, during the financial crisis, you had easing a 0:02:51.080 --> 0:02:54.200 monetary policy, You had the Federal Reserve, Remember you had 0:02:54.200 --> 0:02:57.120 the TARP vote, and then very soon thereafter they started 0:02:57.120 --> 0:03:00.640 their quantitative easing program and whether to buy a lot 0:03:00.680 --> 0:03:03.959 of treasury, started to buy a lot of mortgages. Now 0:03:04.000 --> 0:03:07.200 that's reversing, right, So they started to do that. Remember 0:03:07.240 --> 0:03:10.320 in twenty eighteen, twenty nineteen, the economy started to slow. 0:03:10.400 --> 0:03:14.560 Then you had the pandemic, and that'll cause obviously the 0:03:14.960 --> 0:03:17.880 Federal Reserve to be even easier and way easier even 0:03:17.919 --> 0:03:21.600 than it was during the financial crisis. So I think 0:03:21.639 --> 0:03:24.440 it's a it's reactive right now that we're going to 0:03:24.480 --> 0:03:27.400 see higher rates because of the strength of the economy, 0:03:27.440 --> 0:03:30.639 because of the monetary policy actions by the Fed, and importantly, 0:03:30.680 --> 0:03:33.880 and I think this is definitely can't be underappreciated. And 0:03:34.680 --> 0:03:37.680 if you go back to when the Treasury Department at 0:03:37.680 --> 0:03:39.920 the beginning of the month came out and said we're 0:03:39.920 --> 0:03:42.560 going to issue a trillion dollars of debt this quarter, 0:03:42.680 --> 0:03:47.480 so just the July through September quarter, that was eye 0:03:47.480 --> 0:03:49.400 popping to a lot of people because it was two 0:03:49.480 --> 0:03:52.400 hundred billion dollars more than we thought. And I think 0:03:52.440 --> 0:03:56.760 consensus was probably somewhere near there too. So you have 0:03:56.800 --> 0:04:00.560 supply dynamics on top of a reasonably strong economy and 0:04:00.800 --> 0:04:04.360 monetary policy that's going to stay very uh, you know, 0:04:04.520 --> 0:04:07.160 very tight for a while. All of those things are 0:04:07.200 --> 0:04:09.280 going to mean that rates are going to be you know, 0:04:09.320 --> 0:04:12.040 stuck probably at this these higher levels at least for 0:04:13.160 --> 0:04:15.560 you know, for a few quarters, if not even a year. 0:04:15.920 --> 0:04:16.479 It's no good. 0:04:16.480 --> 0:04:19.080 I'm looking to refinance the mortgage, IRA, You're not helping 0:04:19.080 --> 0:04:22.440 me out whatsoever, all right, No, not at all. Yeah, No, no, 0:04:22.560 --> 0:04:26.400 thank you very much again, Uh Jackson Hole, Wyoming. Matt 0:04:26.400 --> 0:04:28.440 and I will not be there, but our good friends 0:04:28.440 --> 0:04:30.159 at Bloomberg Surveillance will be there. 0:04:30.200 --> 0:04:32.040 And why, I mean, what's the point of even going. 0:04:32.120 --> 0:04:34.200 They're sending, well, they're gonna, They're sending the A team, 0:04:34.240 --> 0:04:35.240 So Ira, does it matter? 0:04:35.360 --> 0:04:35.560 Yeah? 0:04:35.600 --> 0:04:36.120 Does it matter? 0:04:36.160 --> 0:04:36.400 Ira? 0:04:37.320 --> 0:04:39.880 I doubt that that Ja Powell is going to say 0:04:39.880 --> 0:04:44.280 anything to uh, you know, to groundbreaking really because with 0:04:44.960 --> 0:04:48.520 press conferences at every single FOMC meeting, he only uh, 0:04:48.600 --> 0:04:50.720 you know, spoke to us in late July. So it's 0:04:50.760 --> 0:04:53.280 hard to imagine that even though the data has been 0:04:53.320 --> 0:04:57.280 a little bit better maybe than expectations, it hasn't been 0:04:57.320 --> 0:04:59.719 strong enough for you know, for the FED to completely 0:04:59.800 --> 0:05:02.880 change their view. But there will be nuance. I think 0:05:02.880 --> 0:05:05.120 that we'll be listening for so things like if if 0:05:05.240 --> 0:05:07.559 Jay Powell starts talking about the medium term and about 0:05:07.560 --> 0:05:10.919 some of the structural shifts in the in the global 0:05:10.960 --> 0:05:14.200 economy with wages and with supply chains and the like, 0:05:14.960 --> 0:05:16.960 you know, we might be able to at least you know, 0:05:17.040 --> 0:05:20.200 glean some information from there. Will it be massively market moving? 0:05:20.240 --> 0:05:20.880 I doubt it. 0:05:21.960 --> 0:05:24.800 But at the same time, liquidity has been pretty poor, 0:05:24.839 --> 0:05:27.359 which is one of the reasons you've seen such big moves. 0:05:27.440 --> 0:05:29.480 So if he does happen to say something that's a 0:05:29.520 --> 0:05:32.000 little bit unexpected, you could see a pop here and 0:05:32.040 --> 0:05:35.080 there in the market, whether it's you know rates, you know, 0:05:35.160 --> 0:05:37.880 ten year yields, five bases points lower, five bases points. 0:05:37.760 --> 0:05:41.679 Higher, real quick, Ira, Are you surprised how successful Messi's 0:05:41.680 --> 0:05:42.719 been in Miami so far? 0:05:44.080 --> 0:05:44.640 Not really. 0:05:44.680 --> 0:05:47.840 You know, Major League soccer teams have have salary caps, 0:05:47.880 --> 0:05:50.480 and they tend to spend their money more on attacking 0:05:50.520 --> 0:05:53.039 talent than they do on defenders. So Messi is just, 0:05:53.320 --> 0:05:55.279 you know, tearing up a lot of the defenses in 0:05:55.400 --> 0:05:56.240 Major League Soccer. 0:05:56.440 --> 0:05:58.120 It's fun to watch. It'll taste coming to New York 0:05:58.200 --> 0:06:00.440 right now. And John Fair was just saying, I was 0:06:00.440 --> 0:06:02.799 listening on surveillance. A ticket that usually goes for seventy 0:06:02.800 --> 0:06:04.440 five or one hundred bucks in New York for the 0:06:04.480 --> 0:06:06.240 New York Red Red Bulls, when Miami comes in a 0:06:06.320 --> 0:06:06.840 thousand bucks. 0:06:06.920 --> 0:06:07.080 Dude. 0:06:07.080 --> 0:06:10.320 He told me that the DC game tickets start at 0:06:10.320 --> 0:06:13.680 twelve dollars. Yeah, but I mean once Messi and when 0:06:13.680 --> 0:06:16.960 Messi comes, tickets start at four ninety six exactly. That's 0:06:16.960 --> 0:06:17.400 a delta. 0:06:17.520 --> 0:06:19.640 That's a delta. Ira Jersey, thanks so much for joining us. 0:06:19.640 --> 0:06:23.880 Irad Jersey chief US interest rate strategist and soccer strategist 0:06:23.920 --> 0:06:27.080 as well soccer owner. He's a mogul in the world 0:06:27.120 --> 0:06:27.520 of soccer. 0:06:29.120 --> 0:06:32.520 You're listening to the team Can's are live program Bloomberg 0:06:32.560 --> 0:06:35.920 Markets weekdays at ten am Eastern on Bloomberg dot Com, 0:06:36.000 --> 0:06:39.160 the iHeartRadio app, and the Bloomberg Business App, or listen 0:06:39.240 --> 0:06:41.480 on demand wherever you get your podcasts. 0:06:43.560 --> 0:06:44.120 I'm so glad. 0:06:44.120 --> 0:06:46.960 I'm not like like I'm managing a cyclical business. I 0:06:46.960 --> 0:06:49.360 put up a really good quarter. I saw a lot 0:06:49.400 --> 0:06:52.440 of tractors, the farmers in good shape. Yet my stock's 0:06:52.480 --> 0:06:56.000 down four percent because these darn analysts and investors are 0:06:56.040 --> 0:06:58.720 looking six, twelve, eighteen months down the road and saying, hey, 0:06:58.720 --> 0:07:00.440 it can't get any better than it is right now. 0:07:00.880 --> 0:07:03.880 Somebody has to live this on a daily basis is 0:07:03.920 --> 0:07:06.800 Brook Southerland, and she covers all the industrial stuff, including 0:07:06.839 --> 0:07:09.480 dear for Bloomberg Are Opinion. 0:07:09.320 --> 0:07:09.720 Back to news. 0:07:09.720 --> 0:07:11.160 I don't know where are you these things still in 0:07:11.160 --> 0:07:14.680 Bloomberg Opinion bo Yeah, Brook Joints is here in our 0:07:14.680 --> 0:07:17.840 Bloomberg Interactive Brokers Studio. So Brook, what did you take 0:07:18.000 --> 0:07:21.080 of the deer earnings? How's the American farmer doing these days? 0:07:21.520 --> 0:07:23.960 You know, I think they had been doing pretty well, 0:07:24.160 --> 0:07:25.920 you know, on the back of rising crop prices, and 0:07:25.960 --> 0:07:28.720 that really provided an opportunity to go out and replace 0:07:29.040 --> 0:07:31.320 farm equipment because we had a very long period where 0:07:31.400 --> 0:07:34.000 you know, tractors were getting up there in terms of 0:07:34.040 --> 0:07:36.560 duration and people were holding off on purchases, and of 0:07:36.560 --> 0:07:38.600 course we've seen the other end of that, but now, 0:07:38.720 --> 0:07:41.480 you know, we're starting to see some pressure on crop prices, 0:07:41.760 --> 0:07:43.720 just with some of the harvesting proatorns that we've seen. 0:07:43.920 --> 0:07:45.800 But I think, you know, sort of the the crux 0:07:45.840 --> 0:07:47.560 of the issues. If you look at deer's numbers, they're 0:07:47.640 --> 0:07:51.240 very good, but it's not volumes that's really driving everything here. 0:07:51.280 --> 0:07:53.559 It's priced. And they have a ton of pricing power 0:07:53.880 --> 0:07:57.000 because they are such a dominant provider of tractors, and 0:07:57.040 --> 0:07:59.800 they also really have invested in the technology curve in 0:08:00.040 --> 0:08:02.800 terms of making their machines more efficient, more productive for 0:08:02.840 --> 0:08:05.200 those farmers, and that has really helped them get pricing power. 0:08:05.200 --> 0:08:07.360 But I think you have to wonder at what point 0:08:07.400 --> 0:08:09.600 have we reached sort of the peak of pushing through 0:08:09.600 --> 0:08:12.760 these price increases, we start to lap tougher comparisons. Has 0:08:12.800 --> 0:08:15.720 the farmer maybe had enough in terms of those price increases, 0:08:15.720 --> 0:08:17.000 And I think that's why you're seeing some of the 0:08:17.040 --> 0:08:18.920 pressure on the stairs today in the stock. 0:08:19.120 --> 0:08:23.520 Yeah, it's come down substantially, but they're still doing really well. 0:08:23.640 --> 0:08:27.200 I look at comp chart comp on the Bloomberg. It 0:08:27.360 --> 0:08:30.200 automatically defaults to a five year period, and they have 0:08:30.400 --> 0:08:34.000 more than tripled over the past five years. You know, 0:08:34.120 --> 0:08:37.199 compared to an S and P that's up sixty six percent. 0:08:37.400 --> 0:08:39.720 The Industrials index on the S and P is up 0:08:39.720 --> 0:08:43.600 fifty two percent. So they're a huge outperformer, right, Who 0:08:43.600 --> 0:08:48.319 are their biggest competitors? Like, who else has the name, brand, 0:08:48.360 --> 0:08:51.439 recognition and quality of a John Deere? 0:08:52.200 --> 0:08:54.480 I mean, not really anybody, And I think that's why 0:08:54.480 --> 0:08:56.160 they have so much pricing power. I mean, you do 0:08:56.200 --> 0:08:59.720 have competitors like CNH is one that people look at. 0:09:00.280 --> 0:09:03.280 I know is another tractor maker that people like. Lamborghini 0:09:03.960 --> 0:09:07.840 actually makes trackers tractors, not the car company that's owned 0:09:07.880 --> 0:09:11.120 by Folkswagen. But of course, yeah, Lamborghini started out as 0:09:11.160 --> 0:09:14.960 a tractor maker. That's what Feruccio Lamborghini did. 0:09:15.080 --> 0:09:16.800 Before make a better clutch. 0:09:16.880 --> 0:09:18.600 Yeah, that's right. He got in a fight with Enzo 0:09:18.720 --> 0:09:21.400 Ferrari about the clutch and he shifted businesses. 0:09:22.440 --> 0:09:24.600 But CNH has also made some comments about you know, 0:09:24.600 --> 0:09:27.080 we might be reaching sort of the limits of pricing 0:09:27.200 --> 0:09:29.960 increases with that farmer population. But and you know, to 0:09:30.000 --> 0:09:32.400 your point where you've seen that kind of really aggressive 0:09:32.440 --> 0:09:35.000 share climb, this is not the first time we wondered 0:09:35.040 --> 0:09:36.840 if this is as good as it gets for deer, 0:09:37.240 --> 0:09:40.319 because it has been a very good and somewhat prolonged 0:09:40.400 --> 0:09:44.080 ag production cycle here. But you know, at a certain 0:09:44.120 --> 0:09:45.440 point you can't go out forever. 0:09:45.559 --> 0:09:47.280 If I'm a farmer at in Iowa, how long do 0:09:47.360 --> 0:09:49.800 I own it my dear tractor before I replace it? 0:09:49.880 --> 0:09:50.200 Usually? 0:09:50.720 --> 0:09:52.560 I think it depends, I mean again on sort of 0:09:52.559 --> 0:09:54.960 what the market dynamics are and when it is a 0:09:55.000 --> 0:09:57.440 good time to spend on new equipment. And then, like 0:09:57.480 --> 0:10:00.960 I said, you know, they're also investing in better technology 0:10:00.960 --> 0:10:03.320 that can really help on the productivity front, especially for 0:10:03.360 --> 0:10:06.559 farmers that are suffering with labor shortages, to help get 0:10:06.600 --> 0:10:07.960 around some of that. And I think that all sort 0:10:08.000 --> 0:10:09.360 of weighs on the decision making. 0:10:09.160 --> 0:10:13.360 Process labor was an issue for Deer, and they solved 0:10:13.360 --> 0:10:16.840 that pretty quickly. I remember, is that an issue again 0:10:17.120 --> 0:10:19.840 or have they dealt with it for the long term 0:10:19.880 --> 0:10:22.439 and others have to now deal with that same issue. 0:10:22.520 --> 0:10:25.320 Well, I mean, the thing with these union negotiations is 0:10:25.320 --> 0:10:26.400 they kind of come back around. 0:10:26.760 --> 0:10:28.480 Well, That's why I'm wondering, because we're seeing it in 0:10:28.520 --> 0:10:32.439 automotive right the UAW right now is trying to negotiate 0:10:32.480 --> 0:10:36.240 a huge contract with GM and Ford and you also 0:10:36.320 --> 0:10:39.600 see you know, pilots and in airlines. The unions are 0:10:40.360 --> 0:10:44.880 getting agitated again. So has Deer, though, is that sort 0:10:44.880 --> 0:10:47.280 of one tailwind that they've already dealt with this? 0:10:47.800 --> 0:10:50.880 I think that to your point about how well Deer 0:10:50.880 --> 0:10:52.760 has been doing. I think that's one reason why the 0:10:52.840 --> 0:10:55.320 unions feel so empowered is that that was a pretty 0:10:55.360 --> 0:10:58.120 significant wage increase when they struck that deal. And then 0:10:58.160 --> 0:11:00.319 you just look at how successful Deer had has been 0:11:00.360 --> 0:11:02.679 and how much it has been able to increase prices 0:11:02.679 --> 0:11:05.200 for its customers and ramp up profits that it could 0:11:05.800 --> 0:11:08.400 was in a great position to shoulder that extra wage 0:11:08.400 --> 0:11:12.600 costs for those employees. UPS is obviously talking about trying 0:11:12.640 --> 0:11:14.520 to do the same thing down the road. They sounded 0:11:14.600 --> 0:11:16.840 very confident on their earnings call about being able to 0:11:16.840 --> 0:11:21.160 offset those higher wage costs with productivity improvements, investing in automation, 0:11:21.280 --> 0:11:22.960 things like that. And so I think that's what's really 0:11:23.000 --> 0:11:26.320 empowering the unions is they're saying, look, you're really raking 0:11:26.320 --> 0:11:28.080 it in and we want our for sure of that. 0:11:28.640 --> 0:11:30.400 If I'm a farmer in Iowa again, I'm going back 0:11:30.400 --> 0:11:32.720 there and I want to invest in a big tractor. 0:11:33.080 --> 0:11:35.120 Does Deer give me financing or where do I How 0:11:35.160 --> 0:11:35.640 does that work? 0:11:35.720 --> 0:11:37.000 They do have a financing arm? 0:11:37.080 --> 0:11:40.360 Yes, okay, because that guy, I mean, like Ge for example, 0:11:40.640 --> 0:11:42.840 that got to be such a huge part of their business. 0:11:42.920 --> 0:11:44.000 It's not like that for Deer. 0:11:44.400 --> 0:11:45.760 Well, Ge is now out of that. 0:11:45.760 --> 0:11:46.160 That's right. 0:11:47.320 --> 0:11:48.360 It didn't work that well. 0:11:48.280 --> 0:11:52.360 For they went maybe too far, too many different directions 0:11:52.360 --> 0:11:53.000 at the same time. 0:11:53.080 --> 0:11:56.520 But I do wonder though, I mean, is it is 0:11:56.520 --> 0:11:59.000 it a bonus to have your own in house financing 0:11:59.080 --> 0:12:02.120 arm when race ries like this, because you can find 0:12:02.200 --> 0:12:04.679 ways to maybe give customers a better deal than they're 0:12:04.720 --> 0:12:06.080 going to get from their local bank. 0:12:06.280 --> 0:12:08.160 That was always the argument. I mean, that's why Ge 0:12:08.280 --> 0:12:09.960 got into that business in the first place. And you 0:12:09.960 --> 0:12:12.440 know why some of these other companies have these financing arms. 0:12:12.840 --> 0:12:15.480 But it'll certainly be interesting to see how that plays 0:12:15.480 --> 0:12:17.600 out as we get further into this interest. 0:12:17.679 --> 0:12:19.480 Right, we've got you in studio, so we're going to 0:12:19.520 --> 0:12:21.360 just play around here. Rip up the script this, Tom 0:12:21.400 --> 0:12:24.120 Kean would say, US Steel a I didn't even think 0:12:24.160 --> 0:12:26.600 it was still in existence as a company until the 0:12:26.640 --> 0:12:31.160 takeover stuff happened. Where are we with that story here? 0:12:31.840 --> 0:12:34.600 It's it's heating up. It's the center of a binning ward. 0:12:34.600 --> 0:12:37.160 It's one of the oldest American companies, used to be 0:12:37.160 --> 0:12:39.120 one of the biggest, and now it increasingly looks like 0:12:39.160 --> 0:12:41.160 it is going to be bought by somebody. 0:12:42.120 --> 0:12:45.000 But they need so here's another place where unions have 0:12:45.120 --> 0:12:47.520 real strength. Right, Is it the case that the union 0:12:48.040 --> 0:12:53.080 has to support the bid in order for US Steel 0:12:53.120 --> 0:12:54.240 to be able to accept it. 0:12:54.400 --> 0:12:57.040 What US Steel has said is that the union does 0:12:57.080 --> 0:13:00.360 not have a veto over a takeover offer, but they 0:13:00.400 --> 0:13:04.280 do have the ability to mount a counter offer, and 0:13:05.040 --> 0:13:07.720 they have said this morning that they are going to 0:13:07.920 --> 0:13:11.360 transfer that right to a counter offer to Cleveland Cliffs. 0:13:11.600 --> 0:13:13.920 But I don't know that. You know, there's a lot 0:13:13.960 --> 0:13:16.240 of aggressive rhetoric out there, and I don't know that 0:13:16.240 --> 0:13:19.200 we should assume that US Steal necessarily doesn't want to 0:13:19.760 --> 0:13:22.800 sell to Cleveland Cliffs. There's some sort of bias against 0:13:22.840 --> 0:13:24.600 that sort of What they said is that they wanted 0:13:24.880 --> 0:13:27.880 Cleveland Cliffs to agree to an NDA to do a 0:13:27.960 --> 0:13:30.600 due diligence process, and Cleveland Cliffs wouldn't do that until 0:13:30.600 --> 0:13:33.520 they agreed to the economic terms upfront, which is somewhat unusual. 0:13:34.240 --> 0:13:36.240 And I think there's just a lot more of this 0:13:36.280 --> 0:13:38.160 process to play out. And I also don't think we 0:13:38.280 --> 0:13:41.000 know who all of the parties are yet. So when 0:13:41.120 --> 0:13:43.600 US Steal announced its strategic review, they said they'd had 0:13:43.679 --> 0:13:47.000 multiple offers for all and also parts of the company. 0:13:47.000 --> 0:13:49.319 And I think there might be more players to come 0:13:49.320 --> 0:13:51.400 out of the woodwork here, and I think there's just 0:13:51.400 --> 0:13:53.240 a long way to go with this takeover story. 0:13:53.480 --> 0:13:53.760 All right. 0:13:53.800 --> 0:13:56.160 I got a question on a different issue, but you've 0:13:56.200 --> 0:13:59.520 been writing about it. So when I moved to Berlin 0:13:59.600 --> 0:14:04.440 into the sixteen, I had just bought myself a Portie 0:14:04.559 --> 0:14:08.040 nine to eleven carrerass here and I didn't want to 0:14:08.400 --> 0:14:11.600 lose it, so I paid the four and a half 0:14:11.640 --> 0:14:13.800 thousand dollars that I think it costs for me to 0:14:13.840 --> 0:14:18.280 get you know, half half a trailer on a freighter 0:14:18.400 --> 0:14:20.680 ship and shipped it over to Germany and it was great. 0:14:20.680 --> 0:14:22.400 I got to drive it on the Autuban. It absolutely 0:14:22.440 --> 0:14:25.240 loved it. It was the perfect car for Germany. But when 0:14:25.280 --> 0:14:27.680 I moved back to New York at the end of 0:14:27.960 --> 0:14:31.240 twenty twenty one and I went to call the same 0:14:31.280 --> 0:14:33.920 shipper to ask how much it would be, they quoted 0:14:33.960 --> 0:14:37.520 me more than twenty thousand dollars, approaching twenty five thousand dollars, 0:14:37.560 --> 0:14:41.040 So the price had essentially gone up five x and 0:14:41.080 --> 0:14:45.520 I had to sell my beloved Carrera. It was I'm 0:14:45.520 --> 0:14:48.120 still a little bit heartbroken, although it helped me to 0:14:48.200 --> 0:14:53.440 finance my current home. Are those prices coming back down 0:14:53.440 --> 0:14:55.840 to earth? Have we come back to normal now in 0:14:55.920 --> 0:14:57.880 terms of freight shipping, they have. 0:14:57.960 --> 0:15:00.320 Come back down. I would say you maybe or surely 0:15:00.400 --> 0:15:02.280 moved at the raw town. If you've moved in the 0:15:02.320 --> 0:15:04.080 spring of twenty twenty three, you might have had a 0:15:04.120 --> 0:15:08.960 better quoted on that. But yes, so it is that 0:15:09.080 --> 0:15:12.120 we did see shipping prices really crashing back down to 0:15:12.200 --> 0:15:14.120 earth as we sort of had that pivot away from 0:15:14.160 --> 0:15:17.200 good spending back towards services. But now we're starting to 0:15:17.200 --> 0:15:20.960 see signs of life again in the freight market. The DRWY, 0:15:21.000 --> 0:15:24.960 the WCI freight indexes increased for six straight weeks. That's 0:15:25.000 --> 0:15:29.520 the longest positive stretch since January twenty twenty two. And so, 0:15:29.800 --> 0:15:32.600 and you know, we're also seeing maybe some progress in 0:15:32.640 --> 0:15:35.360 the trucking market where we might be hitting a bottom 0:15:35.400 --> 0:15:37.360 and starting to find our way, you know, toward a 0:15:37.360 --> 0:15:39.840 point of stabilization, because it has been really rough for 0:15:39.920 --> 0:15:41.440 that freight sector. I mean, I know there's a lot 0:15:41.440 --> 0:15:44.480 of debate about whether the broader economy is in a session, 0:15:44.480 --> 0:15:46.240 but the freight sector has been there and it's been 0:15:46.240 --> 0:15:48.000 tough out there, and we're starting to see sort of 0:15:48.040 --> 0:15:49.040 a light at the end of the tunnel. 0:15:49.160 --> 0:15:51.360 I mean, you go over to like by the Port 0:15:51.400 --> 0:15:53.360 of Newark over there, like by Newark Airport, they got 0:15:53.400 --> 0:15:55.720 the container stack like twenty high. 0:15:55.840 --> 0:15:57.440 Yeah, go get one of that. And I only needed 0:15:57.480 --> 0:15:59.520 half from my car because the containers I think are 0:15:59.560 --> 0:16:02.200 forty feet long and I only needed twenty feet. But 0:16:02.280 --> 0:16:06.320 I just couldn't justify paying twenty five grand, and I 0:16:06.320 --> 0:16:08.440 wouldn't have been able to afford my house if I 0:16:08.440 --> 0:16:10.520 hadn't sold the nine eleven. That's probably a good thing 0:16:10.600 --> 0:16:13.600 in a sense. I'm living in a Porsche in West Yes, 0:16:14.160 --> 0:16:14.800 all right, Brooks. 0:16:14.840 --> 0:16:17.320 Other then she covers all the industrial stuff for Bloomberg Opinion. 0:16:17.480 --> 0:16:20.240 Joining us here in our Bloomberg Interactive Brokers Studio. 0:16:20.160 --> 0:16:23.280 You're listening to the tape Cat's are live program Bloomberg 0:16:23.360 --> 0:16:26.960 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:16:27.000 --> 0:16:28.960 tune in app, Bloomberg dot Com, and. 0:16:28.920 --> 0:16:30.240 The Bloomberg Business App. 0:16:30.280 --> 0:16:33.080 You can also listen live on Amazon Alexa from our 0:16:33.080 --> 0:16:38.160 flagship New York station. Just say Alexa, play Bloomberg eleven thirty. 0:16:39.400 --> 0:16:42.040 Let's stop tech talk here. The tech stocks have been 0:16:42.680 --> 0:16:45.040 particularly the top five to seven names have really been 0:16:45.120 --> 0:16:48.520 leading this market this year. As people are in search 0:16:48.560 --> 0:16:51.320 for growth and what are they doing. They're generating a 0:16:51.480 --> 0:16:54.120 ton of cash, which raises the question, what are these 0:16:54.120 --> 0:16:56.280 tech companies doing with their cash? Let's bring in Angelas. 0:16:56.320 --> 0:17:00.240 You know he's a senior industry analyst at CFRA Research. 0:17:00.360 --> 0:17:00.960 Hey, Angela. 0:17:01.120 --> 0:17:03.520 Again, a lot of these tech companies, you know, it's 0:17:03.600 --> 0:17:06.159 putting up gobs and gobs and cash like Alphabet, you know, 0:17:06.160 --> 0:17:09.239 one hundred and eighteen billion dollar cash pile. What are 0:17:09.280 --> 0:17:11.800 these companies doing with their cash? And what do you 0:17:11.840 --> 0:17:14.400 think they should be doing with their cash? 0:17:14.520 --> 0:17:17.040 Yeah, so for the most part, most of these you know, 0:17:17.080 --> 0:17:21.440 megacap tech names are really leveraging the cash towards buybacks, 0:17:21.560 --> 0:17:24.080 and it's what they've been doing for years at this 0:17:24.119 --> 0:17:24.680 point in time. 0:17:24.880 --> 0:17:27.879 Clearly, Apple kind of you know the post. 0:17:27.600 --> 0:17:30.840 A boy child in that area buying back, announcing a 0:17:30.920 --> 0:17:33.760 ninety billion dollar buy back earlier this year on top 0:17:33.760 --> 0:17:35.480 of the ninety billion they did last year. 0:17:35.840 --> 0:17:38.400 So that's really where most of the cash is going. 0:17:39.760 --> 0:17:42.480 Alphabet did the same thing, announcing a seventy billion dollar 0:17:42.520 --> 0:17:44.920 buy back this year on top of the seventy billion 0:17:45.080 --> 0:17:46.080 announced last year. 0:17:46.200 --> 0:17:48.000 So that's where the cash is going. 0:17:48.040 --> 0:17:50.040 A big reason for that is they really can't do 0:17:50.080 --> 0:17:52.879 anything else with it in the sense that the M 0:17:52.920 --> 0:17:54.720 and A market for a lot of these large cap 0:17:54.800 --> 0:17:57.320 companies are essentially closed outside of the fact that we 0:17:57.400 --> 0:18:00.280 are likely going to see an improved deal of that 0:18:00.280 --> 0:18:03.240 that Microsoft Activision transaction out there. 0:18:03.320 --> 0:18:05.480 So we expect them to continue to. 0:18:05.480 --> 0:18:09.439 Utilize most of the cash towards buybacks going forward, and 0:18:09.480 --> 0:18:11.879 we actually think that's the right move here and a 0:18:11.920 --> 0:18:14.440 big reason for that is it will support earnings grow. 0:18:14.640 --> 0:18:16.720