WEBVTT - Apple Should Partner With Tesla On EVs: Wedbush's Ives 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.200 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.360 and on Bloomberg dot com. Apple is up two points 0:00:20.440 --> 0:00:23.680 x percent today for the year, though year over year, 0:00:23.680 --> 0:00:26.079 I should say from this day last year, Apple is 0:00:26.160 --> 0:00:29.120 up eight So this two and a half percent increase 0:00:29.640 --> 0:00:34.000 probably not the biggest of its year. Nevertheless, it's up 0:00:34.080 --> 0:00:36.839 on an electric vehicle report. It's going to make one. 0:00:36.880 --> 0:00:38.239 We knew it was going to, but now we have 0:00:38.320 --> 0:00:40.520 a little bit more detail. So let's bring in somebody 0:00:40.520 --> 0:00:42.800 who knows a lot about what Apple is doing and 0:00:42.880 --> 0:00:46.040 how it can be successful done Eyes of web Bush 0:00:46.080 --> 0:00:48.840 Securities joins so down. We knew that at some point 0:00:48.880 --> 0:00:51.960 we would probably get an electric vehicle from Apple. What 0:00:52.080 --> 0:00:53.840 do we know now that we didn't know in the 0:00:53.920 --> 0:00:56.800 last few days. Well, I think it's really around the 0:00:56.800 --> 0:01:01.080 battery technology and some of the innovations going on within Cupertino. 0:01:01.160 --> 0:01:02.600 I mean, if you look at the e V and 0:01:03.280 --> 0:01:07.160 the autonomous visioned Apple. There's been a lot of starts 0:01:07.160 --> 0:01:09.959 and stops, but clearly they're going to dive into the 0:01:10.000 --> 0:01:12.200 deep end of the pool. I believe it's going to 0:01:12.280 --> 0:01:15.800 be through more of a strategic partnership where clearly it's 0:01:15.800 --> 0:01:18.880 going to send a ripple effect across e VY and 0:01:18.959 --> 0:01:22.360 from a stock perspective, it's just another arrow in the 0:01:22.480 --> 0:01:26.119 quiver when you look at the overall ecosystem going forward, 0:01:27.400 --> 0:01:31.120 Where does the confidence come from that Apple will be successful? 0:01:31.480 --> 0:01:33.480 I mean it's it's great at other things, but I 0:01:33.480 --> 0:01:38.119 mean vehicles are a whole different kettle fish. As they say, yeah, 0:01:38.160 --> 0:01:40.559 no doubt, And that's why I don't believe that they 0:01:40.720 --> 0:01:44.560 ultimately start manufacturing their own cars. I believe they're going 0:01:44.600 --> 0:01:47.800 to leave that to a partner, potentially a Tesso or 0:01:47.880 --> 0:01:50.880 v W because you know, I think that's the thing 0:01:51.000 --> 0:01:54.680 investors want to see them, from a software perspective, vertically 0:01:54.800 --> 0:01:57.640 integrate their software into vehicles. And I think if you 0:01:57.720 --> 0:02:00.400 go out into the next few years, EVE, it's a 0:02:00.440 --> 0:02:03.160 golden age and I think it's even similar what we're 0:02:03.160 --> 0:02:06.080 seeing in China and Bay Do that they potentially you're 0:02:06.080 --> 0:02:08.760 going to get into evs because we're talking about a 0:02:08.800 --> 0:02:11.800 trillion dollar mark at the next decade, and the Apple 0:02:11.919 --> 0:02:16.280 recognizes where they sit. Autonomous is key, and I think 0:02:16.320 --> 0:02:18.240 this is just going to be another way for them 0:02:18.280 --> 0:02:22.760 to monetize that you know, brand, which is unparalleled. Um, 0:02:22.800 --> 0:02:25.800 this same argument is partially what's behind Tesla is nearly 0:02:25.840 --> 0:02:29.160 seven h again this year, right while we're at three 0:02:29.160 --> 0:02:32.120 percent or so ev take up right now, there will 0:02:32.160 --> 0:02:35.120 be a point at which that becomes, you know, exponentially larger. 0:02:36.000 --> 0:02:38.480 What about the idea of Apple teaming up with a Tesla, 0:02:38.680 --> 0:02:43.320 is that something that would ever happened, Well, I think 0:02:43.360 --> 0:02:46.239 they could potentially Apple and Tesla, and I think that's 0:02:46.240 --> 0:02:49.320 a partnership that potentially could happen in terms of how 0:02:49.360 --> 0:02:52.480 it fits strategically. So I think that could be somewhere 0:02:52.480 --> 0:02:57.720 on the horizon two thousand one Musk and Cook on EVS. 0:02:57.840 --> 0:02:59.959 That would be something that could have a ripple. In fact, 0:03:00.040 --> 0:03:03.480 that's why I believe a test or VW is ultimately 0:03:03.480 --> 0:03:09.120 who Apple partners with, right and essentially Apple needs to 0:03:09.160 --> 0:03:11.160 find a partner. So what would be the best partner. 0:03:13.480 --> 0:03:16.560 I'm the bed the best partners in stree mode in Tesla, 0:03:16.639 --> 0:03:18.600 I think that's one that would make the most sense 0:03:18.600 --> 0:03:22.760 strategically in terms of going after that market, especially where 0:03:22.800 --> 0:03:24.520 e V is right now. I mean right now, in 0:03:24.600 --> 0:03:27.359 terms of the e V market, it's Testa's world and 0:03:27.440 --> 0:03:30.040 everyone else is paying rent. And that's something I can 0:03:30.080 --> 0:03:35.200 see Apple further and further penetrating through a partnership. Down 0:03:35.280 --> 0:03:37.520 talk to us about the rest of Apple's future. What's 0:03:37.520 --> 0:03:39.600 your price target on Apple right now and what do 0:03:39.640 --> 0:03:43.480 you see coming in the nearer future. Yeah, right now 0:03:43.520 --> 0:03:47.080 we're a hundred sixty dollar price target two hundred bult case. 0:03:47.440 --> 0:03:50.520 I continue to you as a supercycle iPhone twelve. I 0:03:50.560 --> 0:03:53.280 think it's really just playing out in terms of China. 0:03:53.400 --> 0:03:57.080 This is a key market, and to me, Apple is 0:03:57.080 --> 0:03:59.440 a stock that I think invest is just further and 0:03:59.480 --> 0:04:02.520 further appreciating in terms of what I'd view as an 0:04:02.600 --> 0:04:07.080 unparalleled upgrade opportunity. That's why the super cycle pieces is 0:04:07.200 --> 0:04:10.440 taken hold amazing. Then I also want to ask you 0:04:10.480 --> 0:04:13.240 about the performance of Tesla on its first day in 0:04:13.360 --> 0:04:16.080 the SMP five hundred and whether it adds to volatility. 0:04:16.240 --> 0:04:18.480 So obviously we saw you know, run up and then 0:04:18.520 --> 0:04:21.680 a little bit of a set off. What happens you know, 0:04:21.760 --> 0:04:26.080 does it settle into regular SMP action. Yeah, I think 0:04:26.120 --> 0:04:27.760 that was a bit of a sell in the news. 0:04:27.880 --> 0:04:31.560 You know, obviously parabolic move into SMP five hundred inclusions. 0:04:32.200 --> 0:04:36.080 It's really all about demand here. Demand looks very strong 0:04:36.120 --> 0:04:40.279 in terms of December, especially in China. That's really the 0:04:40.279 --> 0:04:43.120 winchman to move the stock higher. And that's why, you know, 0:04:43.120 --> 0:04:46.159 we have a thousand hour bulk case on Tessa, and 0:04:46.200 --> 0:04:48.920 I think it just comes down to execution in this 0:04:49.080 --> 0:04:52.320 market you're seeing in China too, where it's only three 0:04:52.400 --> 0:04:54.880 percent of all overall autos today, we think going to 0:04:55.000 --> 0:04:58.480 ten percent untill two thousand twenty five. That's why right now, 0:04:58.640 --> 0:05:00.760 e Z is you know, I think one of the 0:05:00.800 --> 0:05:05.080 more transformational market opportunities we've seen in our last twenty years. Yeah. Well, 0:05:05.120 --> 0:05:07.240 for sure of you watching that. I mean a lot 0:05:07.320 --> 0:05:10.200 of people that that's that's all that coming are benefiting, right. 0:05:10.640 --> 0:05:12.200 So I want to ask you as well about the 0:05:12.440 --> 0:05:17.360 solar winds and the hat I mean the cybersecurity industry, 0:05:17.640 --> 0:05:23.920 will is ultimately benefit it or hurt it. Well, for cybersecurity, 0:05:24.400 --> 0:05:26.720 I think it could have three to five dips of 0:05:26.800 --> 0:05:29.520 growth in the near term. I mean, this is what 0:05:29.720 --> 0:05:34.600 likely looks like probably the biggest cyber security attack potentially 0:05:34.600 --> 0:05:36.839 in the history and and and it's it's a black 0:05:36.880 --> 0:05:42.040 eye for the overall for the industry, but the beneficiaries 0:05:42.080 --> 0:05:45.520 are going to be massive. Because government agency is an enterprise, 0:05:45.880 --> 0:05:49.000 they're gonna need to spend on companies like z Scale 0:05:49.080 --> 0:05:53.920 or Tenable power Out, stail Point, among others. And that's 0:05:53.920 --> 0:05:57.080 why you've seen these stocks continue move higher in terms 0:05:57.120 --> 0:05:59.600 of where cybersecuit is going, especially in the shift to 0:05:59.680 --> 0:06:02.560 claud Out. And this is you know, obviously this attack 0:06:02.680 --> 0:06:07.159 just speaks of sophistication and threat, but that's a silver 0:06:07.360 --> 0:06:12.440 lining in this very unfortunate incident. It's bullish for cybersecurity 0:06:12.480 --> 0:06:16.159 stocks and investors are continuing to move those higher. What 0:06:16.240 --> 0:06:19.640 are your topics in the space right now? Down the 0:06:19.680 --> 0:06:27.320 topics and cybersecurity are Tenable, sail Point, z Scaler as 0:06:27.360 --> 0:06:29.800 well as pal Out, So those are kind of names 0:06:29.839 --> 0:06:32.600 front and center that I think benefit here. And we 0:06:32.720 --> 0:06:38.320 believe cybersecurity stocked overall could be up more than between 0:06:38.360 --> 0:06:42.200 now and the two thousand one. To me intact, taking 0:06:42.200 --> 0:06:46.000 a step back, it's cloud cyber security and overall than 0:06:46.120 --> 0:06:49.800 games led by Apple. That's the way to play this market. Amazing, Dum, 0:06:49.920 --> 0:06:51.839 thank you so much for all of that, all of 0:06:51.839 --> 0:06:55.159 your intelligence. Down Lives, Managing Director of Equity Research at 0:06:55.160 --> 0:07:01.800 web Bush Securities. Well, it's pretty wild year for equity markets. 0:07:01.839 --> 0:07:05.600 We're u S five hundred, but we really, I mean 0:07:05.640 --> 0:07:09.039 we dropped into you bear market territory more than that. 0:07:09.120 --> 0:07:11.800 In fact, we were down about thirty something percent at 0:07:11.800 --> 0:07:15.560 one point in March. It's been even wilder year for treasuries. 0:07:15.840 --> 0:07:18.960 We went from you know, one point nine something percent 0:07:19.160 --> 0:07:22.240 right down to fifty basis points and we've retraced a 0:07:22.280 --> 0:07:25.360 little bit of that now. So let's bring in somebody 0:07:25.400 --> 0:07:28.480 you have to advise clients through this whole volatility. Lisa 0:07:28.520 --> 0:07:31.200 Charlotte is the chief investment officer for wealth management at 0:07:31.240 --> 0:07:33.880 Morgan Stanley about two and a half trillion dollars in 0:07:33.920 --> 0:07:37.480 client assets. Lisa, how are you feeling as we approach 0:07:37.560 --> 0:07:42.720 the end of twenty twenty So, um, look, we're feeling 0:07:42.960 --> 0:07:47.800 um bullish. Uh, clearly, you know we believe that that um, 0:07:47.880 --> 0:07:52.280 we're in a v shaped recovery. Although it's unfortunate that 0:07:52.640 --> 0:07:56.560 you know, we're currently experiencing this this latest surge in 0:07:56.600 --> 0:08:00.560 the virus um, we are constructive that potential it will 0:08:00.600 --> 0:08:04.160 be the last such surge. Um. You know, as we 0:08:04.280 --> 0:08:07.040 get through the months of the tough months of January 0:08:07.040 --> 0:08:12.960 and February and and get larger portions of the population vaccinated. 0:08:13.760 --> 0:08:18.040 But the momentum, the underlying momentum in the economy continues 0:08:18.120 --> 0:08:21.000 to be very solid. I think, you know, some of 0:08:21.000 --> 0:08:23.600 the backward looking data that we've gotten over the last 0:08:23.720 --> 0:08:27.240 eight weeks, you know, showed that there was slowing in 0:08:27.280 --> 0:08:29.840 November and December. We could as you noted, that the 0:08:29.880 --> 0:08:34.360 consumer confidence numbers fell more than expected. But uh, you know, 0:08:34.440 --> 0:08:38.000 the past is the Finally, the passage of this fiscal 0:08:38.080 --> 0:08:43.280 stimulus spell should put a floor underneath confidence. And that 0:08:43.520 --> 0:08:47.000 combined with with um, you know, the vaccine should should 0:08:47.000 --> 0:08:50.520 be able to to bridge us to to uh a 0:08:50.559 --> 0:08:53.120 full recovery by the middle of next year. And and 0:08:53.200 --> 0:08:56.920 you know, we think markets can kind of get uh 0:08:57.000 --> 0:09:00.880 huh so more to go. Obviously, you're you said your bullish. 0:09:00.920 --> 0:09:02.520 I mean, if you had stayed in the market, if 0:09:02.520 --> 0:09:04.760 you had kept your nerves this whole time, you'd be 0:09:04.840 --> 0:09:07.960 quite happy. But now I wonder what's priced in lison, 0:09:08.080 --> 0:09:10.360 what's left to price and surely some of that good 0:09:10.360 --> 0:09:14.080 news is already priced. Yeah. Look, I think that the 0:09:14.160 --> 0:09:17.480 reason markets have stalled out here at the end of 0:09:17.480 --> 0:09:21.920 the year is in part, uh, not just about you know, 0:09:22.000 --> 0:09:26.400 sentiment about the virus itself, but it's about the fact 0:09:26.400 --> 0:09:30.199 that we don't have a lot of more positive catalysts 0:09:30.200 --> 0:09:32.960 to go. This is a market that has priced an 0:09:32.960 --> 0:09:38.400 extraordinary amount of what has proven to be upside surprises, right, 0:09:38.520 --> 0:09:42.600 whether we're talking about the speed of recovery, whether we're 0:09:42.600 --> 0:09:45.439 talking about the fact that retail sales have held up, 0:09:45.880 --> 0:09:48.880 whether we're talking about the fact that consumer balance sheets 0:09:49.600 --> 0:09:53.959 have not deteriorated, credit card chart drops or not skyrocketing, 0:09:54.080 --> 0:09:59.000 bankruptcies are not sky rocketing. The stimulus measures, uh, you 0:09:59.000 --> 0:10:03.240 know thus far appear to have worked. Um. And you know, 0:10:03.360 --> 0:10:10.199 we are looking at uh consensus forecast for corporate profits 0:10:10.280 --> 0:10:13.320 next year to actually be up year over year about 0:10:14.040 --> 0:10:17.200 pent So, uh, that's a lot of good news. And 0:10:17.280 --> 0:10:20.520 that's certainly what you know, a price earning ordered price 0:10:20.520 --> 0:10:24.000 earnings ratio of of twenty two times tells you I 0:10:24.240 --> 0:10:25.760 and so this is a market that's going to have 0:10:25.840 --> 0:10:29.160 to digest and and let a little bit of main 0:10:29.200 --> 0:10:33.880 street and reality and the numbers catch up to the anticipation. 0:10:34.000 --> 0:10:37.040 But you know, we think that next year, UM, you know, 0:10:37.200 --> 0:10:40.920 stocks uh, at least as measured by the index, you know, 0:10:41.000 --> 0:10:44.000 can be up another you know, five seven percent for 0:10:44.160 --> 0:10:48.840 those deliance however that need you know something more than 0:10:48.880 --> 0:10:52.120 that that are looking for ten percent or fifteen. What 0:10:52.160 --> 0:10:55.440 we've said is you've got to look at individual stocks. 0:10:55.520 --> 0:10:57.679 You've got to look outside the US. You've got to 0:10:57.679 --> 0:11:01.840 look in small and mid caps, uh, because the index 0:11:01.880 --> 0:11:06.240 itself is really pretty rich. What about stocks that had 0:11:06.320 --> 0:11:10.000 been overlooked, such as financials where we saw a massive 0:11:10.120 --> 0:11:12.800 rally yesterday a Goldman, Zachs, Take Morgan and so on 0:11:12.920 --> 0:11:17.640 after the buybacks and dividends news. They're you know, undervalued 0:11:17.640 --> 0:11:20.760 according to some value investors right now. So our surgeon, 0:11:20.840 --> 0:11:24.920 areas of healthcare, anything in those areas attract to you, Lisa, 0:11:26.280 --> 0:11:32.640 absolutely so. Our our number one idea for is financials. Uh. 0:11:32.679 --> 0:11:35.160 You know, we published our report this week, you know, 0:11:35.240 --> 0:11:38.360 talking about the fact that, um, not only do we 0:11:38.480 --> 0:11:42.200 think that the yield curve does steepen next year, which 0:11:42.320 --> 0:11:46.440 will help with net interest income, but we do think 0:11:46.520 --> 0:11:50.200 that the charge offs this cycle loan losses are going 0:11:50.240 --> 0:11:54.120 to be significantly less than historical and therefore a lot 0:11:54.160 --> 0:11:57.839 of the reserves that were taken by the banks will 0:11:57.880 --> 0:12:03.680 be released back into currenting. Obviously. Uh, you know, we've 0:12:03.679 --> 0:12:06.800 gotten a little bit of regulatory forbearance here and and 0:12:06.920 --> 0:12:09.360 you know we saw that as he said, with the 0:12:09.400 --> 0:12:14.120 FED allowing the resumption of of of share buy backs. 0:12:14.200 --> 0:12:17.960 That's going to help the factor. And look, last, last, 0:12:17.960 --> 0:12:23.040 but not least, is there are lasting behavioral changes that 0:12:23.040 --> 0:12:28.960 that occurred during this pandemic that we believe create huge 0:12:29.720 --> 0:12:33.000 profit opportunities and efficiencies for the bank. Well, Lisa, we 0:12:33.000 --> 0:12:36.160 are going to have to get into those behavioral changes 0:12:36.320 --> 0:12:38.800 another time, but we really really appreciated looking forward to 0:12:38.800 --> 0:12:42.320 that particular conversation and happy holidays to you. Much appreciate. 0:12:42.360 --> 0:12:47.800 That's Lisa Shallows of Morgan Standie Wealth Management. Let's bring 0:12:47.800 --> 0:12:50.679 in something else now. David Garrity is with us, his 0:12:50.800 --> 0:12:53.680 chief market strategists for laid Law and Company also partner 0:12:53.720 --> 0:12:57.719 at bt Block, a cybersecurity and blockchain firm. And we've 0:12:57.760 --> 0:13:01.839 got the laid Law five forecasts for one, so David 0:13:01.920 --> 0:13:06.480 gets straight into it. What's your five forecast for next year? Yeah, 0:13:06.559 --> 0:13:09.880 the five forecasts are starting off bunny, looking at the 0:13:09.880 --> 0:13:12.240 fact that the market is still very much dependent upon 0:13:13.120 --> 0:13:15.960 government fiscal stimulus, whether it's here in the US or 0:13:15.960 --> 0:13:19.880 whether it's coming from overseas um. You know, from that standpoint, 0:13:20.000 --> 0:13:23.120 we think that the markets will start the year off choppy, 0:13:23.160 --> 0:13:26.040 with games going more towards the back half of the year. 0:13:26.679 --> 0:13:30.920 Talking about markets, we have an objective for the S 0:13:30.960 --> 0:13:35.040 and P five hundreds of four thousand for two thou one, 0:13:35.080 --> 0:13:39.840 about eight percent upside, and we think that against this backdrop, 0:13:39.880 --> 0:13:42.520 we're going to have interest rates rise on the ten 0:13:42.600 --> 0:13:45.320 ure to about one and a half percent. Obviously, we 0:13:45.360 --> 0:13:48.200 think inflation is gonna run hot, break evens going from 0:13:48.240 --> 0:13:52.000 one to two point three. And then against that backdrop, 0:13:52.120 --> 0:13:55.080 we're going to have the dollar weekend against foreign currencies 0:13:55.120 --> 0:13:59.839 by ten, you know, off the strength of better economic 0:14:00.000 --> 0:14:03.640 growth forecasts outside the US then the US. We're calling 0:14:03.679 --> 0:14:08.440 for international stocks non US to appperform over the course 0:14:08.440 --> 0:14:11.359 of one and we think that here within the US, 0:14:11.440 --> 0:14:15.679 with an economic reopening value sectors are actually going to 0:14:15.920 --> 0:14:18.960 perform tech in the year ahead, although tech will continue 0:14:19.000 --> 0:14:23.520 to have growth from disrupting as it does. Yeah, fascinating. 0:14:23.520 --> 0:14:26.040 So that's a really complex look at the markets. Is 0:14:26.080 --> 0:14:28.160 that one forecast. I just want to make sure David 0:14:28.480 --> 0:14:32.520 or all five. Um, that's all five sort of wrapped 0:14:32.560 --> 0:14:35.160 into one statement. Well, talk to us that about the 0:14:36.680 --> 0:14:39.240 and I'll get to that at the end. Talk to 0:14:39.280 --> 0:14:41.600 us about the value plays. Because we were speaking earlier 0:14:41.640 --> 0:14:44.920 to somebody who thought that financial stocks and some areas 0:14:44.920 --> 0:14:47.440 of healthcare might be the places to look for free, 0:14:47.440 --> 0:14:50.840 fresh value. Where are you seeing that? Yeah, and I 0:14:50.920 --> 0:14:53.680 certainly would agree. Relative to financials and the fact that 0:14:54.240 --> 0:14:56.960 you know, central banks are allowing the financials to go 0:14:57.160 --> 0:15:00.000 engage in buy backs, namely the federal reserves, and now 0:15:00.000 --> 0:15:01.880 it's been in the impact that will have in the 0:15:01.960 --> 0:15:04.280 lights of the JP Morgan as well as Goldman, Sacks 0:15:04.280 --> 0:15:07.800 and others certainly favors the financials. Clearly, it's the steepening 0:15:07.880 --> 0:15:10.440 yield curve which is a thing that really will serve 0:15:10.440 --> 0:15:13.240 to drive the financials. We think also at the same 0:15:13.240 --> 0:15:17.440 time that a recovering oil price going from forty dollars 0:15:17.480 --> 0:15:20.320 a barrel now backed up towards sixty over the course 0:15:20.360 --> 0:15:23.680 of one will certainly prove to support what has been 0:15:23.760 --> 0:15:26.320 one of the weakest sectors this year, which has been energy. 0:15:26.640 --> 0:15:30.480 You know, down about or so in under formed the 0:15:30.560 --> 0:15:34.280 s and p f UM. You know, so we think 0:15:34.280 --> 0:15:36.600 that energy really is going to be probably the leading 0:15:36.600 --> 0:15:39.760 recovery trade. But along with that, we'd also would throw 0:15:39.800 --> 0:15:42.920 in with the financials with energy also looking at industrial 0:15:42.960 --> 0:15:46.840 stocks industrials. Interesting, what area of industrialism would that be 0:15:47.160 --> 0:15:51.120 dedicated on some kind of an infrastructure package. It may 0:15:51.200 --> 0:15:53.720 be very much driven by an infrastructure package. Certainly have 0:15:53.840 --> 0:15:56.560 seen positive performance coming out of the likes of Caterpillar 0:15:57.040 --> 0:16:00.200 UM so far here in the fourth quarter of We 0:16:00.240 --> 0:16:03.840 think that there's further upside relative to that. We certainly 0:16:03.840 --> 0:16:07.440 think that you know, the ground is that uh in 0:16:07.520 --> 0:16:10.760 the US to see a good infrastructure program being put 0:16:10.760 --> 0:16:14.200 in place. Hopefully Congress cooperates, but that's what's going to 0:16:14.280 --> 0:16:17.160 give people, we think in the markets preps someone on 0:16:17.280 --> 0:16:20.480 hold until we get a better idea as to whether 0:16:20.480 --> 0:16:24.480 we're really going to become bipartisan in one and not 0:16:24.560 --> 0:16:28.600 necessarily as partisan as we've been. David, I want to 0:16:28.640 --> 0:16:32.280 ask you a little bit about cybersecurity as well. Bt 0:16:32.440 --> 0:16:35.240 block is a place where your partner and it's a 0:16:35.240 --> 0:16:38.840 cybersecurity intelligence and a blockchain firm. I'm not sure how 0:16:38.840 --> 0:16:41.920 related the two are, but certainly we've had this massive, 0:16:42.040 --> 0:16:46.120 massive cybersecurity breach. It's very very serious and it goes 0:16:46.160 --> 0:16:49.160 back as far as six months maybe more, to places 0:16:49.200 --> 0:16:52.080 like Treasury and other agencies. How do you see this 0:16:52.160 --> 0:16:55.880 playing out or are we in endanger that right now 0:16:56.040 --> 0:17:00.360 without even realizing it, into the extent of foll have 0:17:00.480 --> 0:17:03.360 gone more and more online over the course of has 0:17:03.440 --> 0:17:06.480 worked from home became the new normal and is likely 0:17:06.520 --> 0:17:10.480 to extend into uh, you know, the fact that people 0:17:10.520 --> 0:17:16.040 having information observed or leaked certainly grows. And from the standpoint, 0:17:16.160 --> 0:17:18.679 what we've been doing within DT block have been you know, 0:17:18.760 --> 0:17:22.760 developing improved ways of managing passwords. One of the things 0:17:22.760 --> 0:17:26.480 that was the major weakness within Solar Winds was that 0:17:26.640 --> 0:17:32.359 they really hadn't practiced anything near decent password management discipline, 0:17:32.600 --> 0:17:36.359 and that's what created the the open window, if you will, 0:17:36.520 --> 0:17:39.280 that others were we're able to come in from, especially 0:17:39.320 --> 0:17:43.040 from Russia, will be able to find a fix or 0:17:43.080 --> 0:17:45.399 a patch or whatever you do find for this. I mean, 0:17:45.440 --> 0:17:48.200 it sounds like it's gone so viral that we're talking 0:17:48.200 --> 0:17:51.840 about you know, x number of Fortune copies, X number 0:17:51.840 --> 0:17:55.520 of US agencies and governmental departments and so on, how 0:17:55.560 --> 0:17:58.440 do you patch that up? Yeah, I mean the issue 0:17:58.480 --> 0:18:01.200 that you had with solar winds, the hack was that 0:18:01.240 --> 0:18:05.120 there was essentially code that was put into software updates 0:18:05.119 --> 0:18:07.480 if they were sending out to all their installed clients, 0:18:07.520 --> 0:18:11.200 both government agencies as well as also private sector entities, 0:18:11.600 --> 0:18:15.399 and you know, that's how the backdoor basically got populated 0:18:15.440 --> 0:18:18.159 across the user base. Now, the problem you're going to 0:18:18.200 --> 0:18:20.159 have here and trying to remedy this problem is that 0:18:20.359 --> 0:18:23.280 the backdoor that was put in wasn't necessarily the only one. 0:18:23.880 --> 0:18:27.359 Um you know, there are also other additional means of 0:18:27.440 --> 0:18:30.440 establishing backdoors in the various systems that have been populated 0:18:30.440 --> 0:18:32.680 as a result of this act. So trying to find 0:18:32.720 --> 0:18:35.600 a way to actually go through and clean it up 0:18:35.880 --> 0:18:40.320 is going to take some extended period of time. Relative 0:18:40.320 --> 0:18:43.560 to government policy, you know, there clearly is an opportunity 0:18:43.640 --> 0:18:47.080 and in need here on the policy front to basically 0:18:47.160 --> 0:18:51.159 become or unified as regards cybersecurity how it's practiced, not 0:18:51.280 --> 0:18:55.480 just within the government but across the US as a whole. David, 0:18:55.520 --> 0:18:57.720 if there are some stocks in that area that you 0:18:57.720 --> 0:19:00.760 would recommend, would be very grateful not just to cybersecurity, 0:19:00.760 --> 0:19:04.920 but also blockchain. Um. You know, in terms of looking 0:19:04.920 --> 0:19:07.679 at blockchain, there have been a number of vehicles we 0:19:07.720 --> 0:19:09.920 think that you know, our Investment Management has had a 0:19:09.960 --> 0:19:13.320 blockchain ETF that's out there that's very good in terms 0:19:13.359 --> 0:19:16.760 of highlighting some of the stronger names. Our Investment Management 0:19:16.840 --> 0:19:20.959 through their disruption UH or innovation ETF you know, had 0:19:21.000 --> 0:19:23.680 a bannery year of a hundred and fifty two m. 0:19:24.000 --> 0:19:26.320 Granted it might have been more due to Tesla in 0:19:26.440 --> 0:19:29.680 terms of their vehicles, but you know, I think over 0:19:29.680 --> 0:19:32.280 the course of emerging there will be more names that 0:19:32.320 --> 0:19:34.360 will be looking at and be happy to highlight at 0:19:34.359 --> 0:19:38.040 that time. Great well, David, thanks so much for joining 0:19:38.119 --> 0:19:40.640 us today, and have a wonderful rest of your year. 0:19:41.040 --> 0:19:44.160 David Garity is chief market strologist at laid Law and Company, 0:19:44.440 --> 0:19:48.920 also partner at bat Block of Cybersecurity, Intelligence and blockchain firm. 0:19:49.080 --> 0:19:51.040 On there to talk about is laid Law five. Those 0:19:51.040 --> 0:19:57.440 forecasts for one hospitals are deluged in the United States 0:19:57.480 --> 0:20:00.600 and places such as California. I see you capacity is 0:20:00.600 --> 0:20:02.800 down to less than two and a half percent right now, 0:20:02.840 --> 0:20:07.160 and of course fatalities are climbing. Let's bring in some Fazali, 0:20:07.240 --> 0:20:09.439 Senior farm analyst and head of e m A Research 0:20:09.480 --> 0:20:12.399 at Bloomberg Intelligence. To talk about this obviously, as well 0:20:12.440 --> 0:20:15.639 as the vaccines and this variant that we're seeing in 0:20:15.680 --> 0:20:18.199 the United Kingdom that may already be in Germany and 0:20:18.240 --> 0:20:21.520 France some how important is a distress that this is 0:20:21.560 --> 0:20:26.280 a variant and not a new strain. Oh, hi, Vannie, 0:20:26.400 --> 0:20:31.359 So I mean, look, it's it's nomenclature, scientific nomenclature. I 0:20:31.400 --> 0:20:34.480 mean a strain Star two is a new strain of 0:20:34.520 --> 0:20:39.000 the coronavirus versus Stars kobe us. So it's just it's 0:20:39.040 --> 0:20:41.680 just to be to be pedantic. It's the right it's 0:20:41.720 --> 0:20:43.840 the right way to put it. This is a variant 0:20:43.840 --> 0:20:47.800 because it's the same family. Still, does it mean that 0:20:48.000 --> 0:20:51.240 the current vaccines will also work against it? Or do 0:20:51.280 --> 0:20:54.639 we know that yet? So we don't know for sure. 0:20:55.440 --> 0:20:59.320 There are lots of reasons to remain optimistic the vaccines 0:20:59.560 --> 0:21:03.520 will be Apparently, at least the fires A BioNTech one. 0:21:04.760 --> 0:21:08.040 The immune response they've seen to it does not seem 0:21:08.080 --> 0:21:12.639 to correlate with the areas where the mutations are, but 0:21:12.880 --> 0:21:17.240 mutations can also change the shape of this. The confirmation, 0:21:17.359 --> 0:21:20.000 if you like, of the spike protein which is being 0:21:20.040 --> 0:21:24.200 targeted by the vaccines, so it might diminish the efficacy, 0:21:24.359 --> 0:21:29.240 but luckily we're starting at efficacy, so it's going to 0:21:29.280 --> 0:21:33.080 be quite good to see what that might be. Even 0:21:33.080 --> 0:21:37.520 if it's is still a pretty pretty serious help in 0:21:37.720 --> 0:21:41.359 managing the pandemic. Now, this particular variant, we know that 0:21:41.400 --> 0:21:44.160 it's more contagious. Do we know how people are reacting 0:21:44.200 --> 0:21:46.760 when they get it? Is it the same type of reactions? 0:21:46.800 --> 0:21:50.080 Are they as sick? You know, our ventilator is something 0:21:50.080 --> 0:21:54.080 that did come up. It's too early to tell, you know, 0:21:54.160 --> 0:21:57.560 the the the the only way we know is in 0:21:57.600 --> 0:22:01.680 a few weeks time as hospitalizations mortality data come through 0:22:02.320 --> 0:22:05.760 and then you can see what what what variant of 0:22:05.800 --> 0:22:09.720 the virus was was causing those issues. You need the 0:22:09.800 --> 0:22:12.280 data to be able to tell, and just by looking 0:22:12.320 --> 0:22:14.600 at the numbers it's impossible to be able to tell because, 0:22:14.720 --> 0:22:17.600 as you rightly said, if the ice use are jam packed, 0:22:18.160 --> 0:22:20.919 then people's mortality is likely to go up because they 0:22:20.920 --> 0:22:23.520 can't deal with them better. So that's that's Those are 0:22:23.640 --> 0:22:26.679 key elements that that some serious science needs to be 0:22:26.720 --> 0:22:29.439 done to figure it out. The measure is being taken, 0:22:29.560 --> 0:22:34.480 so lockdown and various countries restricting travel into their countries 0:22:34.520 --> 0:22:37.199 from the United Kingdom for various amounts of time, and 0:22:37.520 --> 0:22:40.600 those may get extended. Is that the right thing to do? 0:22:42.640 --> 0:22:47.040 They It's possible that it's that it's a bit late 0:22:47.400 --> 0:22:51.760 in terms of shutting the stable doors after the horse 0:22:51.800 --> 0:22:55.399 has already bolted, And it's possible that they already that 0:22:55.520 --> 0:22:59.520 they that the virus has evolved the same mutations in 0:22:59.720 --> 0:23:02.280 you know, we've seniored already in South Africa, very similar 0:23:02.359 --> 0:23:06.040 mutation is not identical, but to very similar mutations in 0:23:06.080 --> 0:23:09.560 other countries. And I would be amazed if it's not 0:23:09.640 --> 0:23:13.680 already in the United States. So that's the key thing here. 0:23:14.200 --> 0:23:16.640 I'm going to repeat that Sam Fazali, who is head 0:23:16.680 --> 0:23:20.400 of our pharma analytics and really has been on top 0:23:20.440 --> 0:23:24.080 of everything coronavirus related, understands it all, says that he 0:23:24.119 --> 0:23:26.399 would be amazed if this new variant is not already 0:23:26.400 --> 0:23:30.119 in the United States, a variant that is more contagious some. 0:23:30.760 --> 0:23:36.119