Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors,
Speaker 1: and of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
Speaker 1: and twenty countries and Jason. You can download Bloomberg Business
Speaker 1: Week on iTunes, SoundCloud, ol Bloomberg dot com. You can
Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. We want to get to
Speaker 1: our virus update, which we do every day, and we've
Speaker 1: got a great guest to talk about what's going on
Speaker 1: Tonics Pharmaceuticals. It's among several drug companies working on a
Speaker 1: COVID nineteen vaccine, So let's get into it with Dr
Speaker 1: Seth leader In his chairman, President CU and founder of
Speaker 1: the New York based specialty pharmaceutical company Tonics. He joins
Speaker 1: us on the phone in Massachusetts. Dr Letterman Leaderman, excuse me,
Speaker 1: it's nice to have you here with us. Um I
Speaker 1: want to get into and we want to get into
Speaker 1: what you guys are doing. But I've got to ask
Speaker 1: you about the latest news involving the virus. And we've
Speaker 1: all been talking about the World Health Organization coming out
Speaker 1: and talking about a symptomatic transmission of the virus and saying, uh,
Speaker 1: it's very rare. And I know a top w h
Speaker 1: official has now come come back out and kind of
Speaker 1: downplayed her comment. So I don't know, how do you
Speaker 1: make sense of this? Well, first of all, thank you
Speaker 1: very much for having me on the show, and thank
Speaker 1: you for covering the COVID nineteen story so effectively. It's
Speaker 1: important that you know knowledge is power and everyone is
Speaker 1: in this together. Thanks for asking me about the w
Speaker 1: h O recommendations. I would say generally that people should
Speaker 1: air on the side of caution. It's it's hard to know,
Speaker 1: um what's safe and what's not safe, but people making
Speaker 1: individual decisions should be cautious. I think that I find
Speaker 1: some of the information compelling. Being outside is better than
Speaker 1: inside with people. I think that uh, staying six ft apart,
Speaker 1: wearing a mask and hands are all very important. So
Speaker 1: this new thought about asymptomatic transmission. It is something that
Speaker 1: people can put into an equation, but I wouldn't use
Speaker 1: that to engage in any behaviors that don't follow the
Speaker 1: basic tenants. So, as we think about a vaccine, doctor,
Speaker 1: I mean, it is the thing everyone's looking forward to,
Speaker 1: and in so many ways, you are, as Carol said, right,
Speaker 1: and the think of us think of this help us
Speaker 1: understand what's realistic, what you are seeing and how this development,
Speaker 1: which feels different to those of us who don't normally
Speaker 1: pay so much attention to how vaccines are created, how
Speaker 1: it is or isn't different from what you normally seek. Well,
Speaker 1: first of all, I think that there's a remarkable effort
Speaker 1: going on all over the world, many companies, and it's
Speaker 1: really exciting to see how governments, nonprofits, companies have come
Speaker 1: together with the common goal of doing something about this.
Speaker 1: I agree with the general belief that we really can't
Speaker 1: get back to work and back to school, and in
Speaker 1: the same way that we now look back on it's
Speaker 1: called normal until there's a vaccine. So a vaccine is
Speaker 1: very important and one of the exciting aspects of this
Speaker 1: that so many different technologies are being tested. I think
Speaker 1: it's realistic that there will be a vaccine either late
Speaker 1: this year or early next year, but I'm not sure
Speaker 1: that that would be the vaccine that will ultimately win
Speaker 1: market acceptance and the confident of doctors and patients. So
Speaker 1: there's an element of the tortoise in the hair here
Speaker 1: where there are some companies that are very fast out
Speaker 1: of the gate. They have exciting technology, but there are
Speaker 1: other companies like ours that are going more slowly and
Speaker 1: have different technologies. And I think that COVID nine team
Speaker 1: will be with us for a long time, so it
Speaker 1: will be possible to figure out which vaccines are best
Speaker 1: in the public health sense. Explain the science. As you say,
Speaker 1: there's different technologies for the virus, so explain that, because
Speaker 1: you're right there is this huge race going on the
Speaker 1: government is involved to what are the different technologies we're
Speaker 1: talking about, you know, and how that affects the efficacy
Speaker 1: of an ultimate vaccine. I think the simplest way to
Speaker 1: do to divide the different vaccine technologies that are out
Speaker 1: there um is to think about the two main components
Speaker 1: of the immune system, and that is either antibodies or
Speaker 1: T cells. And I think that vaccines are designed to
Speaker 1: stimulate either antibody responses or T cell responses. Antibody responses
Speaker 1: are shorter lived and tend to stop an infection from happening,
Speaker 1: and T cell responses are longer lived but tend to
Speaker 1: eliminate an infection after it's happened and also clear the
Speaker 1: bloodstream and the body of the virus. Now, those are
Speaker 1: the extremes. Just about every vaccine will have elements of both.
Speaker 1: But I think that dividing them up into whether something
Speaker 1: is more antibody or more T cell focused is a
Speaker 1: good way to do to divide the many technologies being
Speaker 1: thrown at this. Do we need both or do we
Speaker 1: need the T cells, which to me sounds like a
Speaker 1: bigger deal. Just quickly and then we'll come back and
Speaker 1: talk we need both and um, but but there there
Speaker 1: are flavors within both. But for example, it's probably true
Speaker 1: that an antibody test is a good sign that someone
Speaker 1: has recovered from the illness and as some level of immunity,
Speaker 1: But antibodies without key cells is probably not a solution.
Speaker 1: Let's get back to our guest. UM continue to talk
Speaker 1: about what's going on with the virus, and of course,
Speaker 1: the search for a vaccine. Dr Seth Letterman is still
Speaker 1: with US chairman, president, CEO, and founder of Tonics Pharmaceuticals.
Speaker 1: He's on the phone in Massachusetts. So, you know, when
Speaker 1: you kind of take into account UM, Dr Letterman, the
Speaker 1: reopenings that we're seeing, but we're continuing to be vigilant,
Speaker 1: wearing masks and so and so forth, do you feel
Speaker 1: like things are progressing like they should be and in
Speaker 1: a safe way. I'm optimistic, but cautious. The most of
Speaker 1: the United States still has very low levels of in
Speaker 1: fact and exposure. So while some areas like New York
Speaker 1: City um is may be prepared to reopen, it seems
Speaker 1: like the rest of the country has to really pay
Speaker 1: attention to the guidelines of interacting and behaving with appropriate
Speaker 1: caution and so as you look at that UH, and
Speaker 1: also you look at everything that's been going on with
Speaker 1: folks going into UM public spaces, and you think ahead
Speaker 1: to kind of the broader sentiment out there of where
Speaker 1: we are around the virus. We talked about the w
Speaker 1: h OH, we talked about UM, you know, the reopening element.
Speaker 1: How does that all factor into what we need, how
Speaker 1: we need to be acting sort of in the meantime,
Speaker 1: and you said earlier in the conversation, you know that
Speaker 1: that we're not really going to get back to anything
Speaker 1: resembling normal till till there is a vaccine. But we
Speaker 1: don't live in this sort of binary world anymore, and
Speaker 1: so so I do wonder, Um, you know, when you
Speaker 1: think about things like I'm just gonna be very procial here,
Speaker 1: like sports in the fall, you know, whether it's youth
Speaker 1: or professional or college, when you think about people going
Speaker 1: to conferences, all those different things, is that all just
Speaker 1: delayed until there's a vaccine. Well, I think that if
Speaker 1: regardless of this scenario is people are following the guidelines,
Speaker 1: who's staying six ft apart, wear a mask, washing hands regularly,
Speaker 1: I think a lot of activities can resume there. It's
Speaker 1: it's clear that this is a virus and it's transmitted
Speaker 1: in a certain way by the respiratory route, and if
Speaker 1: people are very cautious, they can protect themselves and others.
Speaker 1: So with that in mind, I think a lot of
Speaker 1: activities can and should reopen. But it's there's a fear
Speaker 1: that people will become complacent or get sloppy, and that's
Speaker 1: something to really guard against. Yeah, and certainly when you
Speaker 1: see pictures as things reopen, you do see people getting sloppy.
Speaker 1: I was reading a story on the Bloomberg about I
Speaker 1: think one of our reporters who took a flight, and
Speaker 1: you know, yep, there were certainly social distancing and things
Speaker 1: get in place. But then when there was all of
Speaker 1: a sudden a flight change, like all of a sudden,
Speaker 1: everybody's crammed next to each other, and it's very easy
Speaker 1: to go back to the ways. I do want to
Speaker 1: Dr Letterman, just you guys are working on a vaccine,
Speaker 1: So tell us where you are, how, what's the timeline
Speaker 1: you're working on, and and what kind of a vaccine
Speaker 1: it could ultimately be, Oh, thank you. Our vaccine is
Speaker 1: a live replicating vaccine, and that's particular kind of vaccine
Speaker 1: that stimulates T cell immunity. Ours is based on the
Speaker 1: oldest vaccine. It's the same vaccine that eradicated smallpox from
Speaker 1: the world. And the core that we're working on is
Speaker 1: about two hundred and twenty years old, and we're using
Speaker 1: that as a vector to carry a piece of the
Speaker 1: of the COVID nineteen passage in in it, and we
Speaker 1: are we are expecting to be in animal studies in
Speaker 1: the second half of this year, and that will determine
Speaker 1: how quickly we can get into humans. But we're hoping
Speaker 1: it can be in well, here's hoping. I mean, we're
Speaker 1: all looking forward to that in many ways, and as
Speaker 1: you have very well set out, Dr Letterman, it is
Speaker 1: the it is the path back towards something that looks
Speaker 1: much more normal. Dr Steth Letterman is the CEO of
Speaker 1: Tonics Pharmaceuticals, joinings on the phone from Massachusetts. They are,
Speaker 1: of course a clinical stage biopharma company and they're working
Speaker 1: on a vaccine, and I liked what he was able
Speaker 1: to explain to us in terms of the types of
Speaker 1: vaccines that are out there, and there is the most
Speaker 1: concerted effort I think we've certainly seen in our lifetimes
Speaker 1: to eradicate anything. Carol's fair. I hope we stay in
Speaker 1: touch because I thought the science of explaining the different
Speaker 1: because we know that there's a lot of different vaccines
Speaker 1: being worked on UM and I know they just joined
Speaker 1: it had signed a deal to support the manufacturing of
Speaker 1: their vaccine candidate UM. But I'd love to touch base
Speaker 1: as this progressis because certainly UM, I really do feel
Speaker 1: like we get a lot of the science holes filled
Speaker 1: in on what we need to know as um, you know,
Speaker 1: individuals who are trying to get back out into our society.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. I am really excited to talk
Speaker 1: about this next story and with this reporter, in part because,
Speaker 1: as you know, Carol, you're talking to bureau chief spirit
Speaker 1: chiefs are the best. You're just saying, do the chief thing. Uh.
Speaker 1: Natalie Opaco Pearson is our Vancouver bireau chief for Bloomberg.
Speaker 1: She joins us on the phone from that gorgeous city
Speaker 1: and her story. I'm so excited about Shopify because I mean,
Speaker 1: this is a juggernaut in Canada and I really want
Speaker 1: to understand how it's gotten there and what maybe next. Natalie,
Speaker 1: Really nice to have you with us. How are you doing?
Speaker 1: Thanks for having me so tell us about shop if
Speaker 1: I remind us what this is and how it has
Speaker 1: become so important so fast. It's this really odd Canadian
Speaker 1: story that's very big company that a lot of people
Speaker 1: have never heard of. Um, it's remained mostly invisible to consumers,
Speaker 1: but it's it's become the sort of platform of choice
Speaker 1: for any business that wants to get online quickly and cheaply.
Speaker 1: And obviously since the beginning of the year with a
Speaker 1: pandemic that pandemic, there's been a lot of businesses that
Speaker 1: suddenly want to get online very quickly and very cheaply.
Speaker 1: So essentially what it is is, you know, starting with
Speaker 1: a monthly fee of about twenty nine dollars, you can
Speaker 1: set up a virtual shop and everything that's needed to
Speaker 1: run it, so you know, manage things like payments, inventory levels,
Speaker 1: shipping um. And we've seen you know, mega brands from
Speaker 1: like Heins the catchup maker, to Heineken the beer maker
Speaker 1: use there you have their online presence on Shopify down
Speaker 1: to like a small florist in Dublin UM. And one
Speaker 1: thing that's Keita note about Shopify is it's essentially for
Speaker 1: those businesses that don't want to be selling on Amazon.
Speaker 1: So if you want to go online and keep control
Speaker 1: of your online shop in your e commerce presence, you're
Speaker 1: gonna go to something like Shopify and set up you
Speaker 1: set it up on that platform. And so today in
Speaker 1: the US, you know, one of the world's biggest e
Speaker 1: commerce markets. If you're buying anything online, that's not on Amazon.
Speaker 1: It's most likely done on a website that's been powered
Speaker 1: by Shopify, and they've been powered by the lockdown and
Speaker 1: the virus. Right, is a lot of people quickly pivoted
Speaker 1: to digital, that's right. So since the start of the pandemic.
Speaker 1: I think it was their chief technical officer who was
Speaker 1: saying something like they were seeing Black Friday levels of
Speaker 1: traffic every day, all these businesses wanting to suddenly set
Speaker 1: up an e commerce shop and you know, wanting sample.
Speaker 1: Actually was Hinz this on fifty year old food brand
Speaker 1: that had resisted selling online for a very long time.
Speaker 1: But in the UK, as British consumers were suddenly struggling
Speaker 1: to find pantry staples, they did this about face. It
Speaker 1: was this very speedy e commerce pivot. They they within
Speaker 1: a week they had a virtual shop online selling pasta,
Speaker 1: hoops and tomato soup and so on, and so that
Speaker 1: has been you know, replicated in many geographies. And I
Speaker 1: think you know it was they saw like a sixty
Speaker 1: present surge and store creations over a six week period.
Speaker 1: I mean, it's unbelievable to the juggonnaut has become on
Speaker 1: the public markets. You know, vying with Royal Bank of
Speaker 1: Canada as the biggest publicly traded company. I mean, it's
Speaker 1: bigger than Uber, right, I mean, which which I feel
Speaker 1: is like the thing that like, that's the thing that
Speaker 1: you just have to say to anybody in twenty twenty
Speaker 1: and that gets their attention. It's crazy and you know,
Speaker 1: speaking for Canadian and it's crazy for Canadians. It's an
Speaker 1: eight nine billion dollar market cap company. Yeah, it's a
Speaker 1: dressing room off. I mean, you know, it's it helps
Speaker 1: flop sixty one billion dollars worth of goods in two
Speaker 1: thousand and nineteen. It's you know, it's market value exceeds
Speaker 1: that of General Electric, and yet so few people outside
Speaker 1: of Canada have ever even heard of it. So go ahead,
Speaker 1: Well I was thinking, and so all right, so we
Speaker 1: look at Amazon. We all know Amazon, right, we use
Speaker 1: it constantly. You know, does Amazon have to be worried?
Speaker 1: I mean, what's what's the difference the biggest difference between
Speaker 1: these two? Yeah, and that's a great question because I
Speaker 1: think you know, a lot of people who are aware
Speaker 1: of Shopify tend to compare it with Amazon. One one
Speaker 1: key difference is that if you're a merchant and you
Speaker 1: want to sell your stuff online, Amazon might be an
Speaker 1: easy choice, but you kind of lose control once you
Speaker 1: put your wares up on Amazon. You're sort of relying
Speaker 1: on Amazon to get the web traffic to your virtual store,
Speaker 1: and Amazon sort of takes over the fulfillment of those orders.
Speaker 1: And what we actually saw during the pandemic was that
Speaker 1: as as Amazon became overwhelmed, UH, it was prioritizing essential goods.
Speaker 1: So those merchants who were selling non essential goods were
Speaker 1: certainly finding that they were getting orders, but they couldn't
Speaker 1: fulfill them, and so that actually helped direct some traffic
Speaker 1: over to Shopify, where you are in control of your
Speaker 1: online UH shop. And the other thing to note is
Speaker 1: that you know, Shopify is is much more than just
Speaker 1: selling a few things online, like It's evolved and so
Speaker 1: essentially now it's sort of a one stop shop for
Speaker 1: a business. So during the pandemic, it helped merchants set
Speaker 1: up curbside pickup, helped them find ways to set up
Speaker 1: local delivery. It's also expanding social media, so it set
Speaker 1: up these partnerships with Facebook and Pinterest because one of
Speaker 1: the biggest problems for businesses is finding new customers. Especially
Speaker 1: if these people aren't walking by your store every day,
Speaker 1: you know, how do you find out? How do you
Speaker 1: find new customers? So then it's trying to expand. Social
Speaker 1: media is just another way to do online shopping. And
Speaker 1: in the past what we've seen as businesses have to
Speaker 1: kind of cobble together different applications to manage these different channels.
Speaker 1: Will Shopify really simplifies that for you. It's saying you
Speaker 1: come to us, we will help you set that all
Speaker 1: up and you can see the entirety of your business
Speaker 1: from this one plot. And it's still and it's still
Speaker 1: your site, right or is it on Shopify? It's it's Shopify.
Speaker 1: It's sort of the provides the plumbing. But if you
Speaker 1: are a consumer you go to that site, you will
Speaker 1: never see Shopify. If you go into the code, it
Speaker 1: looks like, you know, it looks like Victoria Beckham's clothing line,
Speaker 1: or it looks like Hinds online store. So, Natalie, before
Speaker 1: we let you go, gotta ask um. Obviously all of
Speaker 1: our behavior has changed on the consumer side, and behavior
Speaker 1: is clearly changed on the merchant side. How much does
Speaker 1: Shopify a need for some version of this to continue?
Speaker 1: For this behavior change to continue in order to be
Speaker 1: as successful as it has been. Yeah, and that's a
Speaker 1: great question. I think that's where the skeptics have come
Speaker 1: in because when you look at some of these multiples,
Speaker 1: they're sort of reminiscent of the the Internet boom at
Speaker 1: its frothiest period. You know, it's share prices just totally
Speaker 1: gone stratospheric um and so what the one big question
Speaker 1: is this rush of merchants that came online. Is that
Speaker 1: is that necessarily new demand that's going to sustain or
Speaker 1: is it businesses that might have eventually come online anyway?
Speaker 1: So are they sort of his Shopify borrowed from future
Speaker 1: demand so to speak. The other big question is how
Speaker 1: many of the small merchants that have rushed onto Shopify
Speaker 1: to set up online shops are going to survive because
Speaker 1: we saw after the global financial crisis thousands of them
Speaker 1: memo recovered and consumers spending may yet collapse. So, you know,
Speaker 1: I think one analyst put it, the Shopify gained a
Speaker 1: lot of mark could share with the pandemic, but it's
Speaker 1: biggest risk may actually be meeting investors expectations, Like it's
Speaker 1: a huge amount of pressure to have that enormous share
Speaker 1: price surge. Right, absolutely, Well, it's a great story I
Speaker 1: must read. It's on the Bloomberg and on Bloomberg dot
Speaker 1: com today, it'll be in the upcoming edition of Bloomberg
Speaker 1: Business Week. Natalie Obaco Pierce in Vancouver, bureau chief for Bloomberg.
Speaker 1: Jos on the phone from Vancouver. Who are listening to
Speaker 1: Bloomberg Business Week, Well, it's time not to dig into
Speaker 1: the Small Business Survival Guide. It's an effort that our
Speaker 1: colleagues at Bloomberg Business Week have been undertaking. It's very
Speaker 1: useful to understand kind of what small businesses are doing
Speaker 1: throughout all of this leading the charges to meet you.
Speaker 1: Cassani's editor for Bloomberg. She joins us on the phone
Speaker 1: from New Jersey. Along with I sat up March. She
Speaker 1: is the owner of Studio Phenomenon Hair salon on the
Speaker 1: phone as well. So Demitra, remind us what you're trying
Speaker 1: to do here, and you know, it's interesting. This obviously started,
Speaker 1: you know, primarily to look at COVID nineteen in the
Speaker 1: aftermath there, but obviously the world got a lot more
Speaker 1: complicated and a lot more troubling in the past couple
Speaker 1: of weeks. So I wonder how you guys thought about
Speaker 1: that pivot. Sure, hi, Jason, Yeah, we well, of course
Speaker 1: we were looking at small businesses through solely the lens
Speaker 1: of the of the virus. But even you know, I mean,
Speaker 1: the world is much more complicated today, even if we
Speaker 1: solely look at the virus sort of kind of next stages,
Speaker 1: it's complicated because we're all in reopening phase right New
Speaker 1: York City. The big news of the last two days
Speaker 1: has been phase one reopening will eventually move on to
Speaker 1: phase two and phase three, combined with social unrest, combined
Speaker 1: with what is happening in the world, how do you
Speaker 1: keep going? Do you have the money to keep going?
Speaker 1: Are your customers going to come back? How can you
Speaker 1: make your customers feel comfortable? So we um Nick liber
Speaker 1: Mike colleague, who is a freelance contributor, and I have
Speaker 1: been talking to business owners, and he has been talking
Speaker 1: to Asada Marsh as we mentioned about her business in Brooklyn,
Speaker 1: and it's a lot more complicated than many of us
Speaker 1: realized when it comes to something like a hair salon. Well,
Speaker 1: and let's bring in a Sada Marsh. She joins us
Speaker 1: on the phone in Long Island, as Jason mentioned she's
Speaker 1: owner of Studio Phenomenon Hair Salon. So I just thought
Speaker 1: it talked to us about some of the challenges that
Speaker 1: you're facing, and it's really you know, twofold, minimally, you know,
Speaker 1: between the virus and then of course the civil protests,
Speaker 1: and you know you are a black business owner. So
Speaker 1: tell us about some of the challenges that you are
Speaker 1: seeing firsthand. Okay, well, I'm located in the hottest Brooklyn.
Speaker 1: I serve the number of clients per week and have
Speaker 1: a number of individuals in my business space at any
Speaker 1: given time. People are scared political social messaging from respective
Speaker 1: leaders like conflicting. We don't know what to do. Uh.
Speaker 1: They need to have some type of economics stay grounds established,
Speaker 1: and things are confused and hard to access. Like for me, UM,
Speaker 1: I have to restructure my entire space. I have to
Speaker 1: lessen the people who work for me, and UM act
Speaker 1: really distant from UH. As they say sixty, I say, timty.
Speaker 1: People don't realize when you come inside of the celant
Speaker 1: or space, you touch everything from the door knob to
Speaker 1: the chair to the bathroom door too. You know, it's
Speaker 1: very confusing. It's confusing for me as a business own
Speaker 1: confusing as a client a customer, and my demographic reach
Speaker 1: from a seventeen to seventy nine. So I have to
Speaker 1: be very weary of my older clientele because I don't
Speaker 1: want them to get sick because they're right at the
Speaker 1: at the war zone of the virus affecting them. So
Speaker 1: it's very difficult. You know, I'm at wits end on
Speaker 1: what exactly is real or not. I myself went into
Speaker 1: the COVID nineteen test. It came back negative, and some
Speaker 1: people say it's a negative positive resummer to come back
Speaker 1: negative COVID nineteen, but then they're squad their nose and
Speaker 1: then they come back positive. Whole thing is absolutely confusing.
Speaker 1: I don't know. I mean, each client that comes in,
Speaker 1: I have to mask up myself. I have to give
Speaker 1: them a mask. It's just this whole every day, you know,
Speaker 1: socialization with POOL. It's just it feels like literally I
Speaker 1: have to retrain myself. It's like learning how to read
Speaker 1: or do uh first or second grade math. You have
Speaker 1: to retrain everything that you thought was normal um to
Speaker 1: make it the norm. Right. So I decided just shifting
Speaker 1: gears slightly. I mean, so you're in the process of
Speaker 1: doing all of this, and then you know, here comes
Speaker 1: the last two weeks which have totally turned the world
Speaker 1: upside down. And I wonder how you view that, you know,
Speaker 1: as a as a resident, as a business owner, but
Speaker 1: also as a human being and candidly as a mother. Right, well,
Speaker 1: it's hard as a business owner. I like, I shut
Speaker 1: my place down in March because it was it was
Speaker 1: so many mixed messages that were going on. You I'm
Speaker 1: a news watch of CNN, MSNBC. I watched the news
Speaker 1: just to know current events and things that have happened
Speaker 1: in the world today. So it went from from the
Speaker 1: higher up the president, this virus is nothing, so oh
Speaker 1: it's only fifteen, so oh it's gonna be gone on
Speaker 1: such and such today. I had to really sit down
Speaker 1: and like real lies and tell myself, you know, when
Speaker 1: they said there was possibility of shutting down the Salmant.
Speaker 1: I had to go into thinking moment, as as other
Speaker 1: young business owners do. It's the hustle moment, because when
Speaker 1: you're a young entrepreneur, everything is about hustle, hustle, hustles.
Speaker 1: So I've been in a business for over twenty years,
Speaker 1: so me I had to rethink my situation where I'm
Speaker 1: gonna go, what I'm gonna do, How am I going
Speaker 1: to service my customers. I went from actually doing here
Speaker 1: to making wigs right and trying to get my clients
Speaker 1: to buy the piece of wig pieces just until this
Speaker 1: entire pandemic is over. So it's you know, you have
Speaker 1: let me think your brain right I started. We unfortunately
Speaker 1: have about forty seconds left, but you do have two
Speaker 1: black sons, and we just want to get your perspective
Speaker 1: of the protest, and we apologize. We really do only
Speaker 1: have about forty seconds here. Yes, okay, So as far
Speaker 1: as the protests going along, I'm a very ad I'm sorry.
Speaker 1: I'm a very oddly believer with protests and I stand
Speaker 1: bys on one hundred percent. The only thing that I
Speaker 1: don't like is dismantle of your own community. You can't
Speaker 1: come in protests and destroy your community, destroy your stores,
Speaker 1: destroy in the places that you eat, work and buy
Speaker 1: your food. That it's affecting the older generation. These people
Speaker 1: need uh prescription medications from the local pharmacy. They need
Speaker 1: to know where they can go buy the groceries in
Speaker 1: the morning. If you destroy things in your own communities,
Speaker 1: this is no whales to go my people like sounds. Yes,
Speaker 1: they have protested one protest protested in your protested in
Speaker 1: mind him, it's a different of demographic. Well, we would listen.
Speaker 1: We're so glad we got time with you, and we
Speaker 1: do wish you well and maybe we can check in
Speaker 1: with you again as things hopefully start to go back
Speaker 1: to normal. Asada Marsh, owner of studio Phenomenon Hair Salon,
Speaker 1: on the phone in Long Island, along with our own
Speaker 1: Bloomberg News editor, did meet your kess and needy? Im
Speaker 1: a journal now that you let me drive? Oh no,
Speaker 1: no, no no, no please, I'll do the writing. Let me.
Speaker 1: I want to drive, Just drive the question getrankend. This
Speaker 1: is the drive to the globes to think well dry
Speaker 1: us Jo, Bloomberg Radio, and it's time for the Drive
Speaker 1: to the closes. Joinning this once again, David Deet's President
Speaker 1: and chief investment strategists at Point View Wealth Management, joining
Speaker 1: on the phone from Lovely Summit, New Jersey. David, how
Speaker 1: are you? How are you coping with this market that
Speaker 1: really can't give us a straight answer? It feels like, well, certainly,
Speaker 1: um people are nervous. At this point. We've seen a
Speaker 1: tremendous jump of close to off the apparent bottom March,
Speaker 1: but of course the headlines are still horrendous. We've just
Speaker 1: been told by the NBR that we are in a
Speaker 1: recession that perhaps started in February. Um, the States, they're
Speaker 1: starting to open up quite slowly, but hotspots are increasing,
Speaker 1: certainly um double digit percentages of people out of work.
Speaker 1: So people are trying to balance this tremendous rebound by
Speaker 1: the stock market with some of the most horrendous economic
Speaker 1: headlines we've heard in a generation. But so what do
Speaker 1: you choose to focus on, David? You know, are you
Speaker 1: really you know, the equity market tends to look forward,
Speaker 1: and I do wonder, um, do you think that's right?
Speaker 1: And do you think the trade justifies what we might
Speaker 1: be getting or is it you know, too uncertain. We
Speaker 1: certainly talked to our Bloomberg Economics team, and you know,
Speaker 1: the expectations are not necessarily that high for what we
Speaker 1: might ultimately get, But there's also a wide gap in
Speaker 1: terms of you know, what might happen next. Yeah, absolutely,
Speaker 1: so I think the most important thing for people to
Speaker 1: realize is a medical crisis. Um. And that makes it
Speaker 1: particularly difficult for economists and portfolio managers to get their
Speaker 1: arms around, because that's the province of uh research, scientists
Speaker 1: and so forth. But by all accounts, the silver bullet,
Speaker 1: which is the vaccine, is getting closer and closer. There's
Speaker 1: apparently about a hundred firms worldwide working on it. It's
Speaker 1: becoming like the space race the Chinese we talked to
Speaker 1: what we actually talked to one earlier today, you're right,
Speaker 1: and and then you know, we were trying to get
Speaker 1: to the science behind because it's they're not all the same. Yes,
Speaker 1: So there's there's national pride, there's big bucks. You've got
Speaker 1: three inities by merk Morena's offering, a partnership between Astra
Speaker 1: Zeneca and Oxford University was just received the billion in
Speaker 1: US funding. So I think that's right around the corner.
Speaker 1: That's the silver bullet. But of course the therapeutic if
Speaker 1: we can take death off the table. Gilly Ed's working
Speaker 1: on a great offering there, and each day we're finding
Speaker 1: testing is becoming more plentiful, more available, cheaper um. So
Speaker 1: that's one area. The other area is we're seeing just
Speaker 1: the seat change in consumer attitudes. Initially, of course, people
Speaker 1: were scared to death that they should have been from
Speaker 1: the COVID risk, they stayed in their home. Now we're
Speaker 1: saying just as much focus on people's economic health and
Speaker 1: their mental health as opposed to the COVID risk. And
Speaker 1: they want to get out, they want to get back
Speaker 1: to work, they want to recreate the states all fifty
Speaker 1: of them are now letting them to do that. And
Speaker 1: we've seen great metrics suggesting that people are clamoring to Vegas.
Speaker 1: Even air traffic is starting to get better. So those
Speaker 1: those are some fundamentals that are moving in the right direction.
Speaker 1: So what are you buying? So what are we buying? So?
Speaker 1: I mean, you know, we basically like to to you know,
Speaker 1: is if you are very nervous about the outlook, you
Speaker 1: stick with that stay at home and the secular tech growers.
Speaker 1: But on the other hand, if you're more constructive and
Speaker 1: see the benefits of historic policymaker stimulus built from the
Speaker 1: Federal Reserve and from um Congress, then I think you
Speaker 1: look for some of the blue chip cyclicals. The one
Speaker 1: we like best quite frankly is Boeing. And why, first
Speaker 1: of all, you've got that valuation advantage. It was over
Speaker 1: four hundred right now it's just over two hundred. So
Speaker 1: you know, the question is not whether any airline will
Speaker 1: make It is whether people over the next five to
Speaker 1: ten years will want to take to the skies again.
Speaker 1: And we think the answer is yes. You basically got
Speaker 1: to duopoly. You've got airbust over in Europe, You've got
Speaker 1: Boeing because of the compliance issues, because of the capital required,
Speaker 1: no one else is going to compete with them. And
Speaker 1: we just saw a crash over in Pakistan, unfortunately with
Speaker 1: an Airbus plane, So no one wants to just rely
Speaker 1: on them, and so we think that Boeing ultimately has
Speaker 1: um the upper hand and will benefit. Now it's a
Speaker 1: cyclical business, but a backlog of close to five thousand planes.
Speaker 1: You know, David Deet's one of the things I love
Speaker 1: about you is like you you love these down and
Speaker 1: out every now and again. I remember, for almost a
Speaker 1: year or so we're talking about Wells Fargo, you were,
Speaker 1: you were behind them all the way. I do want
Speaker 1: to talk to about Coca Cola. You know, that's one
Speaker 1: that I grew up with down in Atlanta, and I
Speaker 1: wonder how you feel about it now. So you know,
Speaker 1: it's the chicken way to play a rebound. Here's why,
Speaker 1: because it is a consumer staple, so no matter how
Speaker 1: bad things get, people will turn to their inexpensive luxury,
Speaker 1: which is a nice coat. Unfortunately, they make a little
Speaker 1: bit more money when you buy it at a bar
Speaker 1: or a restaurant and when you consume it at home.
Speaker 1: And that's taking their stuck down from sixty into the
Speaker 1: upper forties, which by the way, is only six point
Speaker 1: above where it was twenty two years ago. Um, so
Speaker 1: we think that. And remember Coke is three times the
Speaker 1: size of its nearest competitor in terms of non alcoholic beverages,
Speaker 1: most of the businesses overseas, so it's got a distribution system,
Speaker 1: a high marginal one because it basically they just give
Speaker 1: the provide the concentrate and let others do the bottling
Speaker 1: and and getting it to your door business. And and
Speaker 1: so you have a wide wide moat. You've got a
Speaker 1: three point two percent dividends. So if things get better,
Speaker 1: we see it drifting up from that forty nine sixty.
Speaker 1: That's game plus your dividend. But if things continue to
Speaker 1: stay tough, because of its size, because of that dividend,
Speaker 1: because of its basically nonstick of coll we think the
Speaker 1: downside risk is low. So I think it's a chicken
Speaker 1: way to take advantage of a general reopening of the economy.
Speaker 1: And again, three percent dividend versus less one percent of
Speaker 1: the ten year treasury. Where are you going to be
Speaker 1: after a couple of years? Hey, one last name, PNC
Speaker 1: Financial is another name that you like, and that's got
Speaker 1: a three point six dividend yield. Stocks down about this
Speaker 1: year y p NC specifically Bursted. They're based obviously out
Speaker 1: in Pittsburgh. Because of the big news, they sold their
Speaker 1: stake in black Rock, so one third approximately other market
Speaker 1: value is now in cash. That means that dividend at
Speaker 1: three point seven percent is sake. That gives them the
Speaker 1: option to buy back stock. It's now about was one
Speaker 1: sixty at the start of the year, so this could
Speaker 1: be an opportune time to do that or during the
Speaker 1: cat first to make an acquisition. We all know the
Speaker 1: financial stockture um under pressure. So they could go to
Speaker 1: the sun Belt, they could continue in the Midwest where
Speaker 1: they could get some service fintech play. They've got a
Speaker 1: lot of options. You don't have to worry about financial
Speaker 1: stress with PNC because of that successful and timely sale
Speaker 1: of black Rock. Well, the company CEO was making some
Speaker 1: remarks at a Morgan Stanley conference actually today and said
Speaker 1: they're gonna be patient to deploy capital from that sale
Speaker 1: of black Rock. Uh and they said they consider stock
Speaker 1: buybacks quote at the margins, and that will ideally expand geography,
Speaker 1: focus on C and I in real estate. So you're right,
Speaker 1: they've got some breathing room. They've got a lot of
Speaker 1: breathing room, and expand geography sounds a lot like they're
Speaker 1: going to buy another bank. I mean, that's what I
Speaker 1: would say. It's like maybe if we want to be
Speaker 1: in the South, it's like, we're not gonna open a
Speaker 1: bunch of P ANDC branches and there are some banks
Speaker 1: for sale down there. Good stuff, David Beats, thank you
Speaker 1: so much. Always good to catch up the top of
Speaker 1: the summit. President, Chief Investment Strategists for Point View Wealth Management,
Speaker 1: Thanks so much for listening to Blueberg Business Week. Download
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