1 00:00:01,360 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along 2 00:00:04,120 --> 00:00:06,200 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEO, market pros and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:21,599 Speaker 1: and on Bloomberg dot com. Eric weltunas e t F 7 00:00:21,680 --> 00:00:24,279 Speaker 1: specialists here at Bloomberg, joins us now for our next 8 00:00:24,280 --> 00:00:28,440 Speaker 1: segment and Eric, welcome, has Robin Hood and here we 9 00:00:28,480 --> 00:00:30,920 Speaker 1: go again because it's sort of fascinating. Has it taken 10 00:00:30,920 --> 00:00:34,360 Speaker 1: away investors from e t s? From run of the 11 00:00:34,360 --> 00:00:37,199 Speaker 1: mills sort of vanilla e t F And some of 12 00:00:37,200 --> 00:00:40,760 Speaker 1: them aren't that vanilla either. Yeah. You know, when et 13 00:00:41,000 --> 00:00:44,160 Speaker 1: s were introduced back in the nineties, it was like, hey, 14 00:00:44,240 --> 00:00:46,839 Speaker 1: you know, you can now trade a whole basket like 15 00:00:46,920 --> 00:00:49,199 Speaker 1: it were a stock. So you get to the benefit 16 00:00:49,240 --> 00:00:51,960 Speaker 1: of the liquidity of the stock, but it's a diversified basket, 17 00:00:52,040 --> 00:00:54,880 Speaker 1: so your risk is a little lower. That used to 18 00:00:54,880 --> 00:00:58,120 Speaker 1: be a feature. They see it as a bug. That's too. 19 00:00:58,200 --> 00:01:01,880 Speaker 1: It's not enough jus for them, and so that's why 20 00:01:02,120 --> 00:01:04,320 Speaker 1: we are seeing they might start with e t s, 21 00:01:04,720 --> 00:01:07,400 Speaker 1: but they will end up at stocks and options, the 22 00:01:07,520 --> 00:01:13,200 Speaker 1: e T s or the gateway. Yes, uh we We 23 00:01:13,240 --> 00:01:18,160 Speaker 1: interviewed two actual gen Z traders on our podcast and 24 00:01:18,240 --> 00:01:20,680 Speaker 1: both of them had the same kind of experience. Maybe 25 00:01:20,720 --> 00:01:23,280 Speaker 1: you know, started off slow, but they always end up 26 00:01:23,280 --> 00:01:25,280 Speaker 1: at stocks and options. If they do use e t s, 27 00:01:25,319 --> 00:01:27,960 Speaker 1: they tend to like leverage gtfs like t q q 28 00:01:28,200 --> 00:01:30,319 Speaker 1: Q and s q q Q, which is a way 29 00:01:30,319 --> 00:01:33,399 Speaker 1: to sort of bet on the queues movement um. But look, 30 00:01:33,440 --> 00:01:35,919 Speaker 1: I think they are a legitimate force in the market. 31 00:01:36,319 --> 00:01:38,440 Speaker 1: But if you look at the assets, robin Hood might 32 00:01:38,440 --> 00:01:41,160 Speaker 1: have what fifty sixty billion in terms of all of 33 00:01:41,160 --> 00:01:43,720 Speaker 1: their accounts. Now Vanguard takes that in about two months. 34 00:01:44,200 --> 00:01:45,800 Speaker 1: So I think at the end of the day, the 35 00:01:45,880 --> 00:01:49,279 Speaker 1: real retail investor army is still the buy and hold 36 00:01:49,920 --> 00:01:53,120 Speaker 1: advisor world. That is really big money that's day, but 37 00:01:53,560 --> 00:01:55,400 Speaker 1: they don't trade a lot. So I do think when 38 00:01:55,400 --> 00:01:57,800 Speaker 1: you get to mid and small stocks, robin Hood can 39 00:01:57,840 --> 00:02:00,280 Speaker 1: move the market and retail investors can move it. They 40 00:02:00,320 --> 00:02:03,520 Speaker 1: make of about eighteen percent of the trading according to 41 00:02:04,200 --> 00:02:06,480 Speaker 1: my colleague Larry tab which has some great data. That's 42 00:02:06,560 --> 00:02:08,880 Speaker 1: up from fifteen percent last year. And ten percent ten 43 00:02:08,960 --> 00:02:10,920 Speaker 1: years ago. So this has been on the rise for 44 00:02:10,960 --> 00:02:13,880 Speaker 1: a while, and so has high frequency trading. So it's 45 00:02:13,880 --> 00:02:16,320 Speaker 1: a lot of retail and al goes out there right 46 00:02:16,320 --> 00:02:19,959 Speaker 1: now moving the market, especially for the smaller stocks. So Eric, 47 00:02:19,960 --> 00:02:22,079 Speaker 1: as you look across your E t F universe, and 48 00:02:22,120 --> 00:02:23,760 Speaker 1: I know you've been doing it for years, so you 49 00:02:23,800 --> 00:02:26,600 Speaker 1: see everything. Where's the money flowing? When you take a 50 00:02:26,600 --> 00:02:29,000 Speaker 1: look at Vanguard flows and the black Rock flows, are 51 00:02:29,000 --> 00:02:31,960 Speaker 1: there certain E t F sectors or areas that are 52 00:02:32,520 --> 00:02:36,959 Speaker 1: more popular. Yeah, fixed income is just ruling the year. 53 00:02:37,000 --> 00:02:39,600 Speaker 1: I mean, this is the fed trade and gold those 54 00:02:39,680 --> 00:02:43,280 Speaker 1: I put under just fed induced money. That's basically been 55 00:02:43,320 --> 00:02:46,720 Speaker 1: the story. The only it's it's interesting. There's been definitely 56 00:02:46,840 --> 00:02:49,760 Speaker 1: some money into equities, but not a lot, not as 57 00:02:49,840 --> 00:02:52,440 Speaker 1: much as you think because the equity markets up what 58 00:02:53,639 --> 00:02:55,679 Speaker 1: since some kitchen sink day at the end of March, 59 00:02:56,160 --> 00:02:58,760 Speaker 1: and there hasn't been much flows into equities because most 60 00:02:58,800 --> 00:03:00,480 Speaker 1: people wanted to front run the ad over in the 61 00:03:00,520 --> 00:03:02,799 Speaker 1: corporate bond area. So when you look at black Rock 62 00:03:02,840 --> 00:03:05,880 Speaker 1: in particular, all of their fifty two billion flows are 63 00:03:05,919 --> 00:03:09,520 Speaker 1: fixed income um. Every last dime that's weird um. And 64 00:03:09,600 --> 00:03:12,160 Speaker 1: equities have been a little left behind. And what's interesting 65 00:03:12,240 --> 00:03:15,679 Speaker 1: is small caps had their best quarter in I think 66 00:03:15,760 --> 00:03:18,880 Speaker 1: thirty years, same with mid caps, and they're both saw 67 00:03:18,919 --> 00:03:21,160 Speaker 1: outflows in e t s. It's interesting there's been a 68 00:03:21,200 --> 00:03:24,079 Speaker 1: lot of areas left behind. Emerging markets saw outflows and 69 00:03:24,120 --> 00:03:27,000 Speaker 1: they just had a best quarter in a decade. That's 70 00:03:27,000 --> 00:03:29,560 Speaker 1: how it's a it's an embarrassment of riches I think 71 00:03:29,600 --> 00:03:32,520 Speaker 1: for investors, and where they see it right now is gold, 72 00:03:32,680 --> 00:03:35,360 Speaker 1: corporate bonds and the queues. That is the one area 73 00:03:35,360 --> 00:03:37,920 Speaker 1: of equities people are piling into. So I suppose you're 74 00:03:37,960 --> 00:03:40,480 Speaker 1: getting some kind of yielding corporate bonds, but you're not 75 00:03:40,480 --> 00:03:43,920 Speaker 1: getting a huge yield. Eric are people that's scared about 76 00:03:43,920 --> 00:03:45,960 Speaker 1: the economy that they're they're going for sort of the 77 00:03:46,720 --> 00:03:50,800 Speaker 1: very safest asset. Well, the corporate bonds is just because 78 00:03:50,840 --> 00:03:53,080 Speaker 1: you know the Fed's coming. So for the past three months, 79 00:03:53,080 --> 00:03:56,000 Speaker 1: the set says, hey, we're gonna buy lq D. So everybody, 80 00:03:56,240 --> 00:03:59,080 Speaker 1: the smart money just piled into l q D. L 81 00:03:59,120 --> 00:04:01,200 Speaker 1: q D took in more flows in the second quarter 82 00:04:01,640 --> 00:04:05,040 Speaker 1: than it ever has in a year because people are 83 00:04:05,040 --> 00:04:06,960 Speaker 1: just like, don't fight the Fed. I'll get right in 84 00:04:06,960 --> 00:04:09,200 Speaker 1: front of the sid started buying LQD. So I try 85 00:04:09,240 --> 00:04:13,280 Speaker 1: to basically contextualize this by saying the FED owns about 86 00:04:13,320 --> 00:04:16,359 Speaker 1: eight billion of corporate bond ETFs, but the whole area 87 00:04:16,400 --> 00:04:19,440 Speaker 1: took in about sixt so most of the money was 88 00:04:19,480 --> 00:04:21,440 Speaker 1: made in front running. I think what you're going to 89 00:04:21,480 --> 00:04:23,599 Speaker 1: see now, though, is people moving out of it. I 90 00:04:23,600 --> 00:04:25,960 Speaker 1: think they're gonna go, Okay, the FED has kind of 91 00:04:26,040 --> 00:04:28,400 Speaker 1: tapped out on their corporate bond ETF buying, let me 92 00:04:28,440 --> 00:04:30,080 Speaker 1: move to something else. So I think we're going to 93 00:04:30,160 --> 00:04:32,680 Speaker 1: see a swing into small cap, midcab emerging markets and 94 00:04:32,720 --> 00:04:35,359 Speaker 1: some of those areas that we're a little left behind 95 00:04:35,400 --> 00:04:38,239 Speaker 1: in the first half. So Eric just real quickly twenty 96 00:04:38,240 --> 00:04:40,440 Speaker 1: seconds or so overall give us a sense of kind 97 00:04:40,440 --> 00:04:44,800 Speaker 1: of the funds flows into ETS in general. Well, they're 98 00:04:44,839 --> 00:04:47,160 Speaker 1: on pace to have a record year. Uh so there's 99 00:04:47,160 --> 00:04:50,000 Speaker 1: still that sort of shift from high costs to low cost. 100 00:04:50,360 --> 00:04:53,760 Speaker 1: People came. You know, ETS went through a lot, but liquidity, 101 00:04:53,880 --> 00:04:57,159 Speaker 1: low cost and tax efficiency kind of trumps all any 102 00:04:57,200 --> 00:04:59,520 Speaker 1: you know, everything right now, and you continue to see 103 00:04:59,520 --> 00:05:01,520 Speaker 1: money flows a two d and twelve billion so far 104 00:05:01,600 --> 00:05:03,720 Speaker 1: year day, so we expect to see more. But I 105 00:05:03,760 --> 00:05:05,080 Speaker 1: do think we're going to see some of those left 106 00:05:05,080 --> 00:05:08,280 Speaker 1: behind sectors see some blows interesting. Eric Balchinis, thanks for 107 00:05:08,360 --> 00:05:11,599 Speaker 1: joining us always the expert Vannie on all things ETF. 108 00:05:11,680 --> 00:05:14,880 Speaker 1: Are fortunate have his ear. Eric's a senior et F 109 00:05:14,880 --> 00:05:18,080 Speaker 1: ANALYSTO Bloomberg Intelligence joining us on the phone. So, Fannie, 110 00:05:18,120 --> 00:05:19,919 Speaker 1: it's just interesting that you know, I've been in this 111 00:05:19,960 --> 00:05:22,200 Speaker 1: business a long time and this E t F phenomena 112 00:05:22,240 --> 00:05:24,440 Speaker 1: has just been amazing, and it's really been i think, 113 00:05:24,680 --> 00:05:28,000 Speaker 1: so widely embraced by many investors exactly, and you see 114 00:05:28,040 --> 00:05:29,320 Speaker 1: some of the same debates going on in the E 115 00:05:29,400 --> 00:05:31,160 Speaker 1: t F world as you do in other words, like 116 00:05:31,240 --> 00:05:37,920 Speaker 1: the fee war for example, you know, the the chasing 117 00:05:37,960 --> 00:05:40,720 Speaker 1: the fees to zero if you like, is flowing into 118 00:05:40,800 --> 00:05:44,040 Speaker 1: quantity TF since long and even the discount brokers, I mean, 119 00:05:44,080 --> 00:05:45,799 Speaker 1: you know, you see the Charles Schwab going to zero 120 00:05:46,360 --> 00:05:49,520 Speaker 1: trading commission. So just again it's a boon for the 121 00:05:49,600 --> 00:05:54,040 Speaker 1: consumer and for the investor well as we all know 122 00:05:54,080 --> 00:05:56,520 Speaker 1: it has been. Why they reported Congress is in the 123 00:05:56,520 --> 00:06:00,600 Speaker 1: midst of negotiating a fourth round of fiscal stimulus in time. 124 00:06:00,720 --> 00:06:03,800 Speaker 1: Certainly of the essence as many of the programs from 125 00:06:03,839 --> 00:06:07,000 Speaker 1: that from the third round that nearly three trillion dollars 126 00:06:07,000 --> 00:06:08,960 Speaker 1: of stimulus in the third round. Those are set to 127 00:06:09,040 --> 00:06:11,479 Speaker 1: expire in the coming weeks and months. Of time is 128 00:06:11,480 --> 00:06:14,200 Speaker 1: certainly of the essence to get an update on how 129 00:06:14,240 --> 00:06:17,080 Speaker 1: that is all playing out. We welcome Lauren Davidson, Congressional 130 00:06:17,080 --> 00:06:21,320 Speaker 1: tax reporter for Bloomberg News. Laura, what's the latest on 131 00:06:21,640 --> 00:06:24,600 Speaker 1: this next round of fiscal stimulus, because again, some of 132 00:06:24,640 --> 00:06:28,159 Speaker 1: these existing programs are about to expire. Well, the latest 133 00:06:28,279 --> 00:06:30,760 Speaker 1: is that they're still really far apart from having a deal. 134 00:06:30,839 --> 00:06:33,920 Speaker 1: Even Republicans in the Senate and and the White House 135 00:06:33,960 --> 00:06:37,440 Speaker 1: are not on the same page. Just yesterday, uh, you know, 136 00:06:37,560 --> 00:06:39,480 Speaker 1: President Trump said it would be a red line if 137 00:06:39,480 --> 00:06:41,800 Speaker 1: the bill did not include a payroll tax cut, which 138 00:06:41,839 --> 00:06:44,320 Speaker 1: is something that Republicans in the Senate are not all 139 00:06:44,320 --> 00:06:47,400 Speaker 1: excited about. But meanwhile, there's a lot of deadlines that 140 00:06:47,440 --> 00:06:49,880 Speaker 1: are pressing down on lawmakers kind of the most important 141 00:06:49,880 --> 00:06:52,760 Speaker 1: one being the end of the six dollar a week 142 00:06:53,200 --> 00:06:57,919 Speaker 1: federal uninsurance uh sorry, unemployment insurance benefit that expires at 143 00:06:57,960 --> 00:06:59,120 Speaker 1: the end of the month. And and that's going to 144 00:06:59,160 --> 00:07:01,480 Speaker 1: be a problem for from millions of people. Uh if 145 00:07:01,640 --> 00:07:04,240 Speaker 1: if Congress lets that lapse without you know, filling something 146 00:07:04,279 --> 00:07:07,159 Speaker 1: to to replace it. So the extra six dollar part 147 00:07:07,200 --> 00:07:12,600 Speaker 1: would laps the unemployment insurance sort of ability to collect, 148 00:07:12,760 --> 00:07:14,880 Speaker 1: wouldn't right, lor would there be anything on top of 149 00:07:14,920 --> 00:07:17,840 Speaker 1: the of the of the minimum, Well, they would have 150 00:07:17,880 --> 00:07:20,080 Speaker 1: their their state benefit you know, which varies by state, 151 00:07:20,120 --> 00:07:22,760 Speaker 1: but it's about a couple hundred dollars. Uh. The but 152 00:07:22,880 --> 00:07:24,960 Speaker 1: the idea is from that the federal government was to 153 00:07:25,000 --> 00:07:27,880 Speaker 1: sort of backstop that and make sure that people basically 154 00:07:27,880 --> 00:07:30,120 Speaker 1: had enough to to pay their rent and and pay 155 00:07:30,360 --> 00:07:32,520 Speaker 1: pay all their bills while uh, you know, they were 156 00:07:32,520 --> 00:07:34,720 Speaker 1: basically shut out of their jobs. Will the economy were 157 00:07:34,720 --> 00:07:36,680 Speaker 1: shut down. Uh, you know, when this was set back 158 00:07:36,680 --> 00:07:38,640 Speaker 1: in late March, they thought, oh, this will be plenty 159 00:07:38,640 --> 00:07:40,280 Speaker 1: of time. But you know, both sides thought, you know, 160 00:07:40,320 --> 00:07:42,400 Speaker 1: this will this little good plenty of runaway. You know, 161 00:07:42,440 --> 00:07:44,480 Speaker 1: now that we're you know, several months down the line, 162 00:07:44,560 --> 00:07:46,960 Speaker 1: and you know, we're seeing states like California shut back 163 00:07:46,960 --> 00:07:49,240 Speaker 1: down again, the virus is spreading even faster than it 164 00:07:49,440 --> 00:07:52,560 Speaker 1: was um several months ago. That there's a lot of concerns. 165 00:07:52,560 --> 00:07:53,960 Speaker 1: There are a lot of people who you know, suddenly 166 00:07:53,960 --> 00:07:56,640 Speaker 1: will be able to pay their mortgages, hey, their rent bills, uh, 167 00:07:56,720 --> 00:07:59,000 Speaker 1: you know, and and that's going to cause wider ripples 168 00:07:59,000 --> 00:08:01,520 Speaker 1: throughout the economy. Yeah, Laura, I know some of the 169 00:08:01,560 --> 00:08:05,040 Speaker 1: debate within Congress about that six d a week supplemental 170 00:08:05,120 --> 00:08:08,360 Speaker 1: payment is that perhaps, uh, it's such a it's it's 171 00:08:08,400 --> 00:08:12,520 Speaker 1: an amount that you know, disincentivizes people to go back 172 00:08:12,600 --> 00:08:14,760 Speaker 1: to work. Is there any sense that they're coming to 173 00:08:14,800 --> 00:08:19,240 Speaker 1: a resolution on that fundamental disconnect? What care? What they're 174 00:08:19,280 --> 00:08:21,160 Speaker 1: looking at is they're looking at sort of two things 175 00:08:21,240 --> 00:08:23,200 Speaker 1: up kind of two sides of the scale. One is 176 00:08:23,200 --> 00:08:25,240 Speaker 1: that they're going to have some sort of federal benefit, 177 00:08:25,320 --> 00:08:27,520 Speaker 1: probably not as high as six hundred dollars, but some 178 00:08:27,640 --> 00:08:30,240 Speaker 1: amount below that. And then what Republicans want is they 179 00:08:30,240 --> 00:08:32,280 Speaker 1: want some sort of back to work bonus. You know 180 00:08:32,280 --> 00:08:33,719 Speaker 1: that there's one idea out there that would be a 181 00:08:33,720 --> 00:08:35,880 Speaker 1: four hundred and fifty dollar a week back to work 182 00:08:35,920 --> 00:08:39,120 Speaker 1: bonus for several weeks to encourage people who may have uh, 183 00:08:39,160 --> 00:08:41,679 Speaker 1: you know, been making more from unemployment, to encourage them 184 00:08:41,760 --> 00:08:44,080 Speaker 1: back to work. Uh. You know, we'll see exactly where 185 00:08:44,120 --> 00:08:45,960 Speaker 1: those land and if they're you know, if they're able 186 00:08:46,000 --> 00:08:48,040 Speaker 1: to to reach a deal in the next couple of 187 00:08:48,040 --> 00:08:51,360 Speaker 1: weeks on that. What about the other parts of it. 188 00:08:51,720 --> 00:08:56,440 Speaker 1: So does you know all sorts of state and local 189 00:08:56,480 --> 00:08:59,400 Speaker 1: government relief packages as part of this as well? What 190 00:08:59,520 --> 00:09:02,520 Speaker 1: will wigons allow and what do they want to what 191 00:09:02,600 --> 00:09:05,480 Speaker 1: do they want to cut back on. Republicans really don't 192 00:09:05,520 --> 00:09:08,120 Speaker 1: want much at all for state and local local governments 193 00:09:08,120 --> 00:09:10,199 Speaker 1: in that package. Um. You know. Of course Democrats that's 194 00:09:10,200 --> 00:09:12,800 Speaker 1: one of their top priorities. So there will likely be 195 00:09:12,920 --> 00:09:16,400 Speaker 1: some sort of money in there. But the big overall 196 00:09:16,480 --> 00:09:18,560 Speaker 1: question here is how much is this bill going to pass? 197 00:09:18,640 --> 00:09:20,600 Speaker 1: You know, several months ago we saw the House passed 198 00:09:20,600 --> 00:09:23,320 Speaker 1: the Heroes Bill that had three point five trillion in 199 00:09:23,520 --> 00:09:26,719 Speaker 1: UH in new stimulus spending. UH. Mitch McConnell for the 200 00:09:26,760 --> 00:09:29,200 Speaker 1: Republicans and said they want something no more than one trillion. 201 00:09:29,280 --> 00:09:32,000 Speaker 1: So there's a there's a vast difference in where the 202 00:09:32,040 --> 00:09:34,480 Speaker 1: both sides are. Uh. You know, again, this is a 203 00:09:34,480 --> 00:09:37,199 Speaker 1: compromise between Pelosi, the White House and and McConnell's. So 204 00:09:37,280 --> 00:09:40,080 Speaker 1: will probably see something above one trillion, but not as 205 00:09:40,160 --> 00:09:42,240 Speaker 1: high as three point five trillion. And and it's really 206 00:09:42,280 --> 00:09:44,000 Speaker 1: just about making the money work once you look at 207 00:09:44,080 --> 00:09:47,080 Speaker 1: unemployment money for state and local there's also concern about 208 00:09:47,080 --> 00:09:49,480 Speaker 1: more money for for a vaccine and for PPE and 209 00:09:49,520 --> 00:09:51,800 Speaker 1: for the health issues. Is that continues to be an 210 00:09:51,800 --> 00:09:54,360 Speaker 1: ongoing problem plus other things, you know, like another round 211 00:09:54,360 --> 00:09:56,559 Speaker 1: of stimulus checks or or more money for us for 212 00:09:56,640 --> 00:09:59,640 Speaker 1: small businesses. Mark, give us a sense of timing here 213 00:09:59,679 --> 00:10:02,720 Speaker 1: about when Congress leaves for their summer vacation. What are 214 00:10:02,720 --> 00:10:07,520 Speaker 1: the odds of getting something done before that recess? Well, 215 00:10:07,559 --> 00:10:09,360 Speaker 1: the goodness is the summer vacation is a is a 216 00:10:09,520 --> 00:10:12,280 Speaker 1: very a good incentive for for lawmakers to to get 217 00:10:12,280 --> 00:10:14,959 Speaker 1: things done in Congress typically doesn't act until it has to, 218 00:10:15,120 --> 00:10:17,880 Speaker 1: and we're rapidly approaching that point. So about the House 219 00:10:17,920 --> 00:10:20,319 Speaker 1: and the Senate will be back next week. They basically 220 00:10:20,320 --> 00:10:22,600 Speaker 1: have two weeks before they're they're scheduled to leave on 221 00:10:22,640 --> 00:10:24,920 Speaker 1: their break. Uh. You know, these things could spill over 222 00:10:24,960 --> 00:10:26,600 Speaker 1: a couple of days into August. But I think there 223 00:10:26,679 --> 00:10:29,959 Speaker 1: is um growing optimism that there will be a deal, uh, 224 00:10:30,000 --> 00:10:33,600 Speaker 1: you know, within the next two or three weeks. What 225 00:10:33,760 --> 00:10:36,680 Speaker 1: happens then, I mean, will the will will whatever is 226 00:10:36,720 --> 00:10:39,640 Speaker 1: decided upon, will it last for? I mean, how do 227 00:10:39,720 --> 00:10:41,960 Speaker 1: they decide how long this lasts? Four? I mean, nobody 228 00:10:41,960 --> 00:10:44,560 Speaker 1: knows when a vaccine is going to be available. You know, 229 00:10:44,720 --> 00:10:48,960 Speaker 1: most businesses that are you know, not able to reopen. 230 00:10:49,080 --> 00:10:51,720 Speaker 1: I'm thinking of even you know, arts organizations like Carnegie 231 00:10:51,760 --> 00:10:54,840 Speaker 1: Hold and Concenter and so on. They're talking about after Christmas, Broadways, 232 00:10:54,880 --> 00:10:57,800 Speaker 1: after the new year. I mean, we're really stretching into 233 00:10:57,920 --> 00:11:00,440 Speaker 1: next year. So anything that gets decided upon on do 234 00:11:00,480 --> 00:11:03,360 Speaker 1: we know how long it will last for we don't 235 00:11:03,400 --> 00:11:05,360 Speaker 1: know exactly, And part of that will be determined by 236 00:11:05,360 --> 00:11:08,840 Speaker 1: the cost. And also it's a political calculation both. You know, 237 00:11:08,960 --> 00:11:11,520 Speaker 1: remember there's an election in November, and if you know, 238 00:11:11,679 --> 00:11:13,760 Speaker 1: especially for Democrats, they think they have a chance of 239 00:11:13,760 --> 00:11:16,240 Speaker 1: winning back the Senate, they may want to just negotiate 240 00:11:16,280 --> 00:11:18,000 Speaker 1: a deal that just goes you know, into the fall 241 00:11:18,080 --> 00:11:20,000 Speaker 1: for a little lies, a little while, and then if 242 00:11:20,040 --> 00:11:23,200 Speaker 1: they were to have control of both the House and 243 00:11:23,240 --> 00:11:24,959 Speaker 1: the Senate, you know, they could pick up a new 244 00:11:25,000 --> 00:11:29,319 Speaker 1: bill in January and hadn't have basically more favorable negotiating 245 00:11:29,320 --> 00:11:31,880 Speaker 1: partners on the other side of the building. So, Laura, 246 00:11:31,920 --> 00:11:35,240 Speaker 1: is the expectation that no matter what Congress delivers to 247 00:11:35,280 --> 00:11:37,560 Speaker 1: the President, that he will sign it. Given that we 248 00:11:37,600 --> 00:11:41,760 Speaker 1: are so close to a presidential election, there is no 249 00:11:41,840 --> 00:11:44,280 Speaker 1: certainty there. Um, you know, there was some concern in 250 00:11:44,280 --> 00:11:46,600 Speaker 1: the Senate yesterday with U with the White House coming 251 00:11:46,600 --> 00:11:48,559 Speaker 1: out and saying that payroll tax cut would be a 252 00:11:48,920 --> 00:11:52,280 Speaker 1: red line. Um, that's something that the Republicans and Senate 253 00:11:52,320 --> 00:11:54,839 Speaker 1: don't really want. It's expensive, it doesn't help people that 254 00:11:54,880 --> 00:11:58,840 Speaker 1: are necessarily not working, so that that's a that's a 255 00:11:58,880 --> 00:12:02,160 Speaker 1: concern though, you know, some some aids have indicated to 256 00:12:02,200 --> 00:12:03,520 Speaker 1: me that this is the demand that the White House 257 00:12:03,520 --> 00:12:06,320 Speaker 1: has made before UH and and the President has caved 258 00:12:06,320 --> 00:12:08,360 Speaker 1: on it. Also. You know, we've seen in previous negotiations 259 00:12:08,400 --> 00:12:12,040 Speaker 1: over over government funding UH demands about money for the 260 00:12:12,080 --> 00:12:14,760 Speaker 1: border wall of Mexico. President has also caved there. So 261 00:12:14,800 --> 00:12:17,440 Speaker 1: I think there's some expectation that there's you know, a 262 00:12:17,480 --> 00:12:21,840 Speaker 1: redline may not be a firm, bright redline. Laura Davison, 263 00:12:21,880 --> 00:12:24,480 Speaker 1: thanks so much for joining us. We appreciate that. Laura Davison, 264 00:12:24,480 --> 00:12:27,240 Speaker 1: Congressional tax reporter for Bloomberg News and Vanni. I think 265 00:12:27,240 --> 00:12:30,479 Speaker 1: this is going to be, UH, a pretty contentious negotiation, 266 00:12:30,520 --> 00:12:32,840 Speaker 1: as Laura was suggesting, coming you know, right down to 267 00:12:32,880 --> 00:12:36,160 Speaker 1: the wire, probably right and today we actually have Manation 268 00:12:36,679 --> 00:12:39,920 Speaker 1: testifying as well before Congress. There there will be a 269 00:12:39,920 --> 00:12:42,560 Speaker 1: lot of information, but will there be enough information Paul. 270 00:12:42,559 --> 00:12:45,800 Speaker 1: I mean, we don't really know yet how many businesses 271 00:12:45,800 --> 00:12:48,000 Speaker 1: were able to get their hands on money to stay open. 272 00:12:48,040 --> 00:12:50,360 Speaker 1: We don't know how many of their employees will actually 273 00:12:50,400 --> 00:12:53,480 Speaker 1: have been uh you know, kept on the pay rolls 274 00:12:53,520 --> 00:12:55,520 Speaker 1: and how money won't So we don't really know how 275 00:12:55,600 --> 00:12:57,640 Speaker 1: much suffering is out there. But one thing's for sure. 276 00:12:58,679 --> 00:13:01,120 Speaker 1: You know, Republicans do not wanted to be as generous 277 00:13:01,280 --> 00:13:04,600 Speaker 1: as the first time out, and it won't be I 278 00:13:04,640 --> 00:13:06,880 Speaker 1: think that's something we can definitely say. Sure, yeah, I 279 00:13:06,880 --> 00:13:08,560 Speaker 1: think you're right. That three trillion we had in the 280 00:13:08,600 --> 00:13:12,240 Speaker 1: third round, that was you know, really a major major 281 00:13:12,280 --> 00:13:14,400 Speaker 1: statement there right at the beginning of the pandemic. But 282 00:13:14,679 --> 00:13:16,920 Speaker 1: you know, we see these states around the country having 283 00:13:17,000 --> 00:13:19,400 Speaker 1: you know, seeing surges. Well it just kind of goes 284 00:13:19,400 --> 00:13:21,400 Speaker 1: to the issue when can we get this thing kind 285 00:13:21,400 --> 00:13:23,240 Speaker 1: of get a handle on it um And it doesn't 286 00:13:23,280 --> 00:13:25,600 Speaker 1: really bode well right now. The data no, a record 287 00:13:25,720 --> 00:13:27,680 Speaker 1: number of cases in the United States. Now this after 288 00:13:27,760 --> 00:13:29,800 Speaker 1: already having seen you know, what we thought was the 289 00:13:29,800 --> 00:13:34,600 Speaker 1: record a couple of months ago. Well, I'm looking at 290 00:13:34,640 --> 00:13:37,720 Speaker 1: gold here up about twenty percent year the date, a 291 00:13:37,840 --> 00:13:40,240 Speaker 1: real rise here. We had a big dip in March 292 00:13:40,320 --> 00:13:43,439 Speaker 1: along with pretty much everything else when the COVID hit, 293 00:13:43,520 --> 00:13:46,560 Speaker 1: but since then been marching ever higher to get a 294 00:13:46,559 --> 00:13:48,760 Speaker 1: sense of what the outlook is for the precious metal. 295 00:13:48,760 --> 00:13:53,080 Speaker 1: We welcome Everett Millman's precious metal specialist for Gainesville Coins 296 00:13:53,120 --> 00:13:55,679 Speaker 1: every Thanks so much for joining us here. Again, I'm 297 00:13:55,679 --> 00:13:58,920 Speaker 1: a little surprised here the golds performed so well, but 298 00:13:58,960 --> 00:14:02,320 Speaker 1: it's just been a stalwart here. What's your view going 299 00:14:02,360 --> 00:14:05,960 Speaker 1: forward for this precious metal? Yeah, thanks for having me 300 00:14:06,040 --> 00:14:09,000 Speaker 1: on UM. As we've seen basically the entire way up 301 00:14:09,040 --> 00:14:12,199 Speaker 1: of these past twelve months, there's been a pretty reliably 302 00:14:12,240 --> 00:14:14,839 Speaker 1: strong bid that comes in any time the gold price 303 00:14:14,920 --> 00:14:18,640 Speaker 1: dips significantly UM, and that durable base of support appears 304 00:14:18,640 --> 00:14:21,680 Speaker 1: to be forming at the eight hundred pounds level right now. 305 00:14:22,000 --> 00:14:24,600 Speaker 1: But as you pointed out, it's interesting that we've seen 306 00:14:24,800 --> 00:14:28,760 Speaker 1: prices recover pretty handsomely in the equity market without much 307 00:14:28,760 --> 00:14:31,920 Speaker 1: of an impact on risk off assets like gold and 308 00:14:32,000 --> 00:14:34,840 Speaker 1: longer data treasuries UM. In fact, both of those have 309 00:14:34,920 --> 00:14:38,680 Speaker 1: continued to rally right alongside starts, right alongside the stock market. 310 00:14:39,320 --> 00:14:41,840 Speaker 1: So even as pockets of the world economy open up, 311 00:14:42,360 --> 00:14:45,840 Speaker 1: UM as economic activity gradually recovers in the second half 312 00:14:45,880 --> 00:14:50,040 Speaker 1: of the year, eighteen hundred dollar gold maybe the new normal. UM. 313 00:14:50,080 --> 00:14:52,840 Speaker 1: On the other hand, if we see some exceedingly good 314 00:14:52,840 --> 00:14:56,480 Speaker 1: developments on the economic reopening or on the trade front, 315 00:14:56,600 --> 00:15:00,280 Speaker 1: for instance, that would relieve a considerable portion of the 316 00:15:00,320 --> 00:15:03,680 Speaker 1: pent up safe haven pressure that's been buoying the gold price. 317 00:15:04,080 --> 00:15:08,760 Speaker 1: So although those kinds of positive developments appear rather unlikely today, 318 00:15:08,800 --> 00:15:11,880 Speaker 1: there is some degree of downside risk for gold UM. 319 00:15:11,880 --> 00:15:14,920 Speaker 1: It could swiftly fall back below six d announces if 320 00:15:14,960 --> 00:15:18,800 Speaker 1: indeed the economy or the financial system looks drastically more 321 00:15:18,920 --> 00:15:21,440 Speaker 1: stable by the third or fourth quarter of this year. 322 00:15:22,280 --> 00:15:24,160 Speaker 1: So I remember speaking with Paul Tutor Jones. Now it 323 00:15:24,200 --> 00:15:25,960 Speaker 1: is probably more than a year ago at this point, 324 00:15:26,000 --> 00:15:28,040 Speaker 1: but he was calling for gold to go higher at 325 00:15:28,040 --> 00:15:29,800 Speaker 1: the time and said that if it hit eighteen hundred, 326 00:15:30,240 --> 00:15:32,440 Speaker 1: you know it would it would it would go beyond 327 00:15:32,760 --> 00:15:35,920 Speaker 1: two thousand dollars nounce. But that didn't happen. We are 328 00:15:35,960 --> 00:15:39,240 Speaker 1: still above eighteen hundred, but we're not moving higher from 329 00:15:39,280 --> 00:15:42,920 Speaker 1: here ever, at what is the reason for that? So 330 00:15:42,960 --> 00:15:45,760 Speaker 1: that is a very interesting development, And what I would 331 00:15:45,800 --> 00:15:49,160 Speaker 1: point to is that investment demand for gold has been 332 00:15:49,240 --> 00:15:52,480 Speaker 1: hitting all time highs, but it's had to make up 333 00:15:52,560 --> 00:15:56,160 Speaker 1: for the near eradication of physical demand for gold jewelry 334 00:15:56,520 --> 00:15:59,880 Speaker 1: in places like India and other key jewelry districts in 335 00:16:00,000 --> 00:16:02,400 Speaker 1: the Middle East and East Asia. So to me, that 336 00:16:02,440 --> 00:16:05,680 Speaker 1: points to the importance of some of the institutional trends 337 00:16:05,680 --> 00:16:10,280 Speaker 1: we're seeing that institutional buyers, hedge funds, central banks, that's 338 00:16:10,320 --> 00:16:12,920 Speaker 1: who's buying gold right now. But if some of the 339 00:16:12,960 --> 00:16:16,520 Speaker 1: assumptions of the gold bears were correct, then losing a 340 00:16:16,600 --> 00:16:19,160 Speaker 1: huge chunk of the biggest source of demand for the 341 00:16:19,160 --> 00:16:22,480 Speaker 1: gold sector. More than fifty of demand for gold is 342 00:16:22,520 --> 00:16:25,000 Speaker 1: made up by the jewelry industry. The fact that that 343 00:16:25,040 --> 00:16:28,880 Speaker 1: market has been significantly impaired for months should have dragged 344 00:16:28,920 --> 00:16:31,880 Speaker 1: prices much lower. Instead, we have seen that face have 345 00:16:32,040 --> 00:16:36,840 Speaker 1: and demand predominantly from Western institutions, has more than compensated 346 00:16:36,880 --> 00:16:40,040 Speaker 1: for that lack of wholesale and retail activity and gold jewelry. 347 00:16:41,080 --> 00:16:43,040 Speaker 1: So let's go to the other side of the equation. Ever, 348 00:16:43,240 --> 00:16:46,320 Speaker 1: the supply side gives a sense of kind of the 349 00:16:46,400 --> 00:16:51,480 Speaker 1: supply dynamics we're seeing in the global gold market here right. 350 00:16:51,880 --> 00:16:54,400 Speaker 1: That is definitely an interesting one to look at because 351 00:16:54,480 --> 00:16:58,280 Speaker 1: COVID has sort of thrown everything into the wind. UM, 352 00:16:58,280 --> 00:17:01,720 Speaker 1: it's very uncertain whether minds are going to be able 353 00:17:01,760 --> 00:17:05,520 Speaker 1: to open at full capacity UM, certainly with the other 354 00:17:05,520 --> 00:17:08,320 Speaker 1: precious metals. In the silver market, we have seen that 355 00:17:08,960 --> 00:17:12,240 Speaker 1: Latin America has been hit pretty hard by COVID and 356 00:17:12,280 --> 00:17:15,560 Speaker 1: that is causing some tighter supply dynamics. So I think 357 00:17:15,560 --> 00:17:19,119 Speaker 1: that that is also adding some positive pressure underneath the 358 00:17:19,119 --> 00:17:21,720 Speaker 1: gold price, and we don't expect that to clear up 359 00:17:21,760 --> 00:17:24,199 Speaker 1: any time in the next few months, so into the 360 00:17:24,240 --> 00:17:27,680 Speaker 1: second half of it could even spill over into early 361 00:17:28,960 --> 00:17:32,840 Speaker 1: We should expect some tighter supply not only in gold, 362 00:17:32,880 --> 00:17:35,159 Speaker 1: but also in silver and the other metals, and that 363 00:17:35,320 --> 00:17:39,120 Speaker 1: is positive for price action. What about jewelry demand, Everett, 364 00:17:39,400 --> 00:17:43,760 Speaker 1: has it gone away completely? Not completely, but as I said, 365 00:17:43,760 --> 00:17:47,960 Speaker 1: it is significantly impaired. UM. Much of the world's jewelry 366 00:17:47,960 --> 00:17:51,680 Speaker 1: demand comes from East Asia and from India, and those 367 00:17:51,720 --> 00:17:54,199 Speaker 1: regions have simply had to shut down a lot of 368 00:17:54,200 --> 00:17:57,359 Speaker 1: their jewelry businesses UM. The same is true in China. 369 00:17:57,480 --> 00:18:01,119 Speaker 1: Even though the Chinese economy obviously bounced back pretty strongly 370 00:18:01,480 --> 00:18:05,280 Speaker 1: in the second quarter, copper demand in China rebounded, we 371 00:18:05,359 --> 00:18:08,760 Speaker 1: haven't seen the same in gold, gold, jewelry has seen 372 00:18:09,040 --> 00:18:12,280 Speaker 1: very low volumes as sales in China. In fact um 373 00:18:12,320 --> 00:18:14,199 Speaker 1: on the Shanghai Gold Exchange, where a lot of that 374 00:18:14,240 --> 00:18:16,800 Speaker 1: jewelry is traded, we've seen the lowest volumes since two 375 00:18:16,840 --> 00:18:20,520 Speaker 1: thousands thirteen. So it is actually rather impressive that the 376 00:18:20,520 --> 00:18:24,200 Speaker 1: gold price has held around eighteen hundred announced because we've 377 00:18:24,240 --> 00:18:27,040 Speaker 1: lost so much of that main source of demand for 378 00:18:27,080 --> 00:18:31,640 Speaker 1: gold under normal circumstances. Every other than gold, what else 379 00:18:31,640 --> 00:18:33,120 Speaker 1: are you looking at in the precious of metal space 380 00:18:33,160 --> 00:18:36,560 Speaker 1: right now? That has your attention? So I'm looking for 381 00:18:36,640 --> 00:18:39,399 Speaker 1: silver to kind of finally play catch up to gold. 382 00:18:39,480 --> 00:18:42,080 Speaker 1: At this point in the bowl market. Um, we've seen 383 00:18:42,119 --> 00:18:45,840 Speaker 1: the gold silver ratio has finally corrected back below one 384 00:18:46,280 --> 00:18:49,080 Speaker 1: to one. That's a pretty significant move, and out of 385 00:18:49,080 --> 00:18:51,800 Speaker 1: all the precious metals, I believe that silver has the 386 00:18:51,840 --> 00:18:57,119 Speaker 1: greatest upside potential and the greatest downside potential. Unfortunately it 387 00:18:57,200 --> 00:19:00,960 Speaker 1: has these very symmetric risks to both sides. Right now, 388 00:19:01,040 --> 00:19:04,480 Speaker 1: the technicals for silver look pretty bullish. UM, we're above 389 00:19:04,520 --> 00:19:07,600 Speaker 1: all of our short term moving averages, and we continue 390 00:19:07,640 --> 00:19:12,720 Speaker 1: to test our two thousand nineteen high around nineteen. But 391 00:19:12,800 --> 00:19:16,000 Speaker 1: unfortunately all of that could reverse quickly. UM in terms 392 00:19:16,040 --> 00:19:19,480 Speaker 1: of behaving like a Saife Haven investment. Silver doesn't tend 393 00:19:19,560 --> 00:19:23,359 Speaker 1: to engender the same level of trust and stability as gold. 394 00:19:23,720 --> 00:19:27,160 Speaker 1: So I'm very keyed in on watching what silver does 395 00:19:27,200 --> 00:19:28,920 Speaker 1: in the short term because I think that will tell 396 00:19:29,000 --> 00:19:32,639 Speaker 1: us uh much about where the future trend is moving. 397 00:19:32,880 --> 00:19:34,679 Speaker 1: All right, we will keep an eye on silver if 398 00:19:34,720 --> 00:19:37,240 Speaker 1: you say so. Everett, thank you for that little tour 399 00:19:37,359 --> 00:19:41,000 Speaker 1: around the precious metals space. Everett Millman is precious metals 400 00:19:41,080 --> 00:19:46,960 Speaker 1: specialist at Gainesville Coins in Gainesville. It is time checking 401 00:19:46,960 --> 00:19:49,960 Speaker 1: out on Bloomberg Opinion, and today we'll speak with Boomberg 402 00:19:50,040 --> 00:19:53,800 Speaker 1: Opinion columnist Tara la Chapelle on Netflix. A little softer 403 00:19:53,880 --> 00:19:57,000 Speaker 1: outlook than people were expecting, and the stalk is down 404 00:19:57,080 --> 00:19:59,880 Speaker 1: seven percent today. But let's remember this was being closely 405 00:20:00,000 --> 00:20:01,520 Speaker 1: watched because it's how to run up of more than 406 00:20:01,560 --> 00:20:03,760 Speaker 1: fifty percent so far this year. It is a stay 407 00:20:03,800 --> 00:20:06,959 Speaker 1: at home stock, and it's adding subscribers, even if not 408 00:20:07,040 --> 00:20:09,119 Speaker 1: at the pace that Old Street was expecting. So Tara, 409 00:20:09,520 --> 00:20:13,280 Speaker 1: thanks for joining. How should we think about Netflix? It 410 00:20:13,359 --> 00:20:15,960 Speaker 1: did add two and a half million subscribers, and by 411 00:20:16,320 --> 00:20:19,000 Speaker 1: most stretches of the imagination, that's a phenomenal number of 412 00:20:19,040 --> 00:20:23,840 Speaker 1: new subscribers. Can Netflix keep it up? So I think 413 00:20:23,920 --> 00:20:26,920 Speaker 1: Netflix warned last quarter that you know, they can't keep 414 00:20:26,960 --> 00:20:30,120 Speaker 1: this growth up. And that's because a lot of the uh, 415 00:20:30,760 --> 00:20:33,280 Speaker 1: the users who joined the last quarter and in the 416 00:20:33,320 --> 00:20:36,399 Speaker 1: first quarter, where people that probably would have joined you know, 417 00:20:36,480 --> 00:20:39,520 Speaker 1: down the road later this year, let's say, so that 418 00:20:39,520 --> 00:20:42,800 Speaker 1: that big growth number takes away from subsequent quarters. So 419 00:20:42,800 --> 00:20:45,399 Speaker 1: that's what we saw again happen where they added almost 420 00:20:45,440 --> 00:20:48,240 Speaker 1: sixteen million subscribers in the first quarter, they added almost 421 00:20:48,280 --> 00:20:51,240 Speaker 1: ten million in the second quarter, but now they're forecasting 422 00:20:51,320 --> 00:20:53,960 Speaker 1: just two and a half million. It's still an incredible 423 00:20:54,000 --> 00:20:57,120 Speaker 1: growth rate. They're still growing more than every quarter year 424 00:20:57,160 --> 00:20:59,600 Speaker 1: on year. But I think that you know, investors and 425 00:20:59,640 --> 00:21:01,840 Speaker 1: analyst got a little bit ahead of themselves, let themselves 426 00:21:01,920 --> 00:21:04,639 Speaker 1: up for disappointment, didn't really listen to those guidance that 427 00:21:04,680 --> 00:21:07,040 Speaker 1: Netflix is giving. And so the stock price is taking 428 00:21:07,440 --> 00:21:09,520 Speaker 1: you know, it deserved breather. It trades it a very 429 00:21:09,600 --> 00:21:12,600 Speaker 1: rich multiple. It doesn't really say much about the outlook 430 00:21:12,640 --> 00:21:15,320 Speaker 1: for Netflix, the product and the successes having, but it 431 00:21:15,359 --> 00:21:18,160 Speaker 1: does say that the stock valuation was probably a little 432 00:21:18,160 --> 00:21:21,399 Speaker 1: bit inflated. So Tara, I know, this is a stock 433 00:21:21,480 --> 00:21:25,720 Speaker 1: that's really driven by the momentum of the subscriber gains um. 434 00:21:25,960 --> 00:21:28,040 Speaker 1: And I guess the big question for a lot of 435 00:21:28,080 --> 00:21:30,399 Speaker 1: investors now is, you know, as I think about that 436 00:21:30,520 --> 00:21:33,880 Speaker 1: softer than expected third quarter guidance for subscriber net adds, 437 00:21:34,160 --> 00:21:37,640 Speaker 1: how much of that was the pull ahead effect of 438 00:21:37,680 --> 00:21:41,239 Speaker 1: the first half versus just a more competitive environment out there. 439 00:21:41,280 --> 00:21:43,640 Speaker 1: Now we've got almost every major media coman just got 440 00:21:43,640 --> 00:21:46,080 Speaker 1: a streaming product in the marketplace. Did the company talk 441 00:21:46,160 --> 00:21:49,120 Speaker 1: about that, Yeah, I mean, and it's a really good point. 442 00:21:49,119 --> 00:21:51,240 Speaker 1: The company did talk a little bit more about the 443 00:21:51,280 --> 00:21:54,560 Speaker 1: competition they're seeing, But as Real Tasting said was, you know, 444 00:21:55,160 --> 00:21:58,040 Speaker 1: their subscribers, even when they turn out, even when they cancel, 445 00:21:58,080 --> 00:21:59,880 Speaker 1: they expect a lot of them to come back, which 446 00:21:59,880 --> 00:22:02,280 Speaker 1: I do think is a fair statement with Netflix. I 447 00:22:02,320 --> 00:22:05,520 Speaker 1: think Netflix has kind of established itself as it this 448 00:22:05,720 --> 00:22:08,200 Speaker 1: base subscription that a lot of people need, and then 449 00:22:08,200 --> 00:22:10,080 Speaker 1: everything else you kind of tested out and have as 450 00:22:10,080 --> 00:22:12,920 Speaker 1: an add on service. And that's why I've been writing 451 00:22:12,920 --> 00:22:16,280 Speaker 1: that a lot of these other services they're they're good, 452 00:22:16,280 --> 00:22:18,399 Speaker 1: but they're not good enough to replace cable or to 453 00:22:18,440 --> 00:22:21,800 Speaker 1: replace Netflix, So they're really just competing for second place 454 00:22:21,840 --> 00:22:23,640 Speaker 1: at this point. Of course, that could change at any 455 00:22:23,680 --> 00:22:27,160 Speaker 1: point if Netflix suddenly doesn't have enough good content, which 456 00:22:27,160 --> 00:22:30,119 Speaker 1: is very possible the longer that this pandemic stretches on 457 00:22:30,200 --> 00:22:33,360 Speaker 1: and they're unable to add new material. But right now, 458 00:22:33,400 --> 00:22:35,800 Speaker 1: I think, you know, Netflix really has the deepest library. 459 00:22:35,880 --> 00:22:38,800 Speaker 1: They had a lot of their stuff for twenty already 460 00:22:38,840 --> 00:22:41,000 Speaker 1: completed and ready to go, so they're not really as 461 00:22:41,000 --> 00:22:43,879 Speaker 1: affected right now, whereas if you have Disney Plus or 462 00:22:44,000 --> 00:22:47,159 Speaker 1: HBO Max, you're really feeling that programming drought at the 463 00:22:47,200 --> 00:22:49,520 Speaker 1: moment you're looking and you're running out of new things 464 00:22:49,560 --> 00:22:51,919 Speaker 1: to watch. And so I think that's how Netflix has 465 00:22:51,960 --> 00:22:55,200 Speaker 1: really kind of established itself with the mode that these 466 00:22:55,240 --> 00:22:59,160 Speaker 1: other companies haven't quite gotten yet. Yes, I mean production 467 00:22:59,359 --> 00:23:03,000 Speaker 1: is resuming and else in Germany, France, Spain, Portugal, Italy 468 00:23:03,040 --> 00:23:06,000 Speaker 1: and the UK, so that should deliver something for the 469 00:23:06,000 --> 00:23:09,200 Speaker 1: consumer by the end of this year. And then Netflix 470 00:23:09,240 --> 00:23:14,119 Speaker 1: has new titles one, so it's really getting around restrictions 471 00:23:14,440 --> 00:23:17,280 Speaker 1: with production and sort of the the need for new material, 472 00:23:17,320 --> 00:23:20,560 Speaker 1: isn't it. Yeah, So they said, you know, next year, 473 00:23:20,760 --> 00:23:24,119 Speaker 1: probably the second half of is when you'll see a 474 00:23:24,119 --> 00:23:26,800 Speaker 1: lot more of their newer stuff because they are you know, 475 00:23:26,800 --> 00:23:29,200 Speaker 1: eventually they'll start to feel the effects of the pandemic 476 00:23:29,280 --> 00:23:34,119 Speaker 1: not having everything completed in time. But even with that said, 477 00:23:34,440 --> 00:23:37,400 Speaker 1: Netflix still has sort of the deepest library, the most 478 00:23:37,440 --> 00:23:39,920 Speaker 1: new material. They've been doing a lot with reality TV, 479 00:23:40,600 --> 00:23:42,639 Speaker 1: which has worked really well for them. They had to 480 00:23:42,840 --> 00:23:46,240 Speaker 1: hit shows too hot to handle Love his Mind, and 481 00:23:46,320 --> 00:23:48,400 Speaker 1: I think that made them realize, you a, reality TV 482 00:23:48,560 --> 00:23:50,600 Speaker 1: is a really big part of this. It's easier to 483 00:23:50,680 --> 00:23:55,080 Speaker 1: make remotely, it's cheaper to produce, and also they're experimenting 484 00:23:55,080 --> 00:23:58,200 Speaker 1: more with animated which a lot of their UH employees 485 00:23:58,240 --> 00:24:00,760 Speaker 1: can do remotely should they need to, so they're not 486 00:24:00,800 --> 00:24:03,879 Speaker 1: having to do these big production sets necessarily where you 487 00:24:03,920 --> 00:24:06,440 Speaker 1: have hundreds of people on set at a time, which 488 00:24:06,480 --> 00:24:08,160 Speaker 1: is something that's going to be really hard for these 489 00:24:08,400 --> 00:24:12,080 Speaker 1: Hollywood studios to work around and going forward, Hey, Tera, 490 00:24:12,160 --> 00:24:14,720 Speaker 1: what didn't you make of the announcement that they're naming 491 00:24:14,720 --> 00:24:18,640 Speaker 1: Ted Surrandos is the longtime product person at the company 492 00:24:18,640 --> 00:24:21,760 Speaker 1: and a senior executive as co CEO with Read Hastings. 493 00:24:21,800 --> 00:24:25,760 Speaker 1: Kind Of an odd organizational setup, isn't it. Yeah, it is, 494 00:24:25,800 --> 00:24:27,400 Speaker 1: you know, And a lot of writers have pointed out 495 00:24:27,440 --> 00:24:30,760 Speaker 1: that those co CEO arrangements tend to spell trouble eventually. 496 00:24:31,000 --> 00:24:32,920 Speaker 1: I think it's probably a little too early to say 497 00:24:32,960 --> 00:24:34,639 Speaker 1: that for Netflix. I mean, it's kind of been this 498 00:24:34,760 --> 00:24:37,760 Speaker 1: informal arrangement for a while, which is what the company 499 00:24:37,840 --> 00:24:39,359 Speaker 1: said in its letter last night, and I think that 500 00:24:39,480 --> 00:24:41,760 Speaker 1: was a fair point that, you know, it has been 501 00:24:41,800 --> 00:24:45,479 Speaker 1: Ted Surrandos and Read Hastings leading the company for many years, 502 00:24:45,720 --> 00:24:48,040 Speaker 1: and they've worked together for about twenty years doing this, 503 00:24:48,119 --> 00:24:50,640 Speaker 1: and Ted has been in charge of the content aspect 504 00:24:50,680 --> 00:24:52,800 Speaker 1: of it. So I think, you know, there's there's some 505 00:24:52,840 --> 00:24:54,840 Speaker 1: things you can glean from it that Netflix is very 506 00:24:54,880 --> 00:24:57,480 Speaker 1: much tied to Hollywood now to producing its own content, 507 00:24:57,800 --> 00:25:01,240 Speaker 1: being a direct rival with these other via companies. At 508 00:25:01,240 --> 00:25:03,520 Speaker 1: the same time, it doesn't seem to really change too 509 00:25:03,640 --> 00:25:05,840 Speaker 1: much of the day to day of Netflix at this moment, 510 00:25:06,160 --> 00:25:08,800 Speaker 1: and perhaps it just has investors look at it more 511 00:25:08,800 --> 00:25:11,560 Speaker 1: through the lens as a media and entertainment company as 512 00:25:11,560 --> 00:25:14,879 Speaker 1: opposed to it's a purely tech company. Talk to us 513 00:25:14,920 --> 00:25:19,600 Speaker 1: about CBS is new offering Peacock TV, a free streaming 514 00:25:19,800 --> 00:25:23,639 Speaker 1: video app. Is it gaining subscribers? Will it provide something 515 00:25:23,720 --> 00:25:28,000 Speaker 1: for Comcast down the road? Right? So Comcast launched Peacock 516 00:25:28,040 --> 00:25:31,320 Speaker 1: in April just to their own Comcast customers, and so 517 00:25:31,400 --> 00:25:34,320 Speaker 1: Comcast Internet subscribers get it for free or for no 518 00:25:34,440 --> 00:25:37,200 Speaker 1: extra charge, I say, say, and so this week they've 519 00:25:37,240 --> 00:25:40,560 Speaker 1: launched now to everybody. And I think that it's a 520 00:25:40,680 --> 00:25:42,879 Speaker 1: it's a cool service, I think, especially if you're going 521 00:25:42,920 --> 00:25:45,480 Speaker 1: to use the free version. There's a five dollar a 522 00:25:45,560 --> 00:25:48,440 Speaker 1: month version that people who don't have Comcasts can also get, 523 00:25:48,520 --> 00:25:51,240 Speaker 1: has a fuller library. Again, I don't think it's going 524 00:25:51,320 --> 00:25:54,040 Speaker 1: to replace Netflix or cable TV and its own there's 525 00:25:54,040 --> 00:25:56,439 Speaker 1: just not enough on there, but it is something that 526 00:25:56,480 --> 00:25:59,239 Speaker 1: makes a good supplement to some to another service. So 527 00:25:59,280 --> 00:26:00,920 Speaker 1: I think with your to see happen with a lot 528 00:26:00,920 --> 00:26:03,159 Speaker 1: of these are people are going to start picking what 529 00:26:03,440 --> 00:26:07,000 Speaker 1: combination of services do they need and fits their budget, 530 00:26:07,080 --> 00:26:08,359 Speaker 1: And of course it's going to be a harder and 531 00:26:08,400 --> 00:26:11,960 Speaker 1: harder decision the longer that this economic downturn goes on. 532 00:26:12,000 --> 00:26:14,760 Speaker 1: But I think Comcast is doing something really interesting where 533 00:26:14,760 --> 00:26:17,800 Speaker 1: instead of charging you know, a high price, they're they're 534 00:26:17,880 --> 00:26:20,200 Speaker 1: keeping it cheap or even free in some cases, and 535 00:26:20,240 --> 00:26:23,199 Speaker 1: they're really relying on advertising. So they think the advertising 536 00:26:23,240 --> 00:26:26,919 Speaker 1: market is going to come back for streaming audiences, and 537 00:26:27,000 --> 00:26:29,040 Speaker 1: so I think they're looking at it as this is 538 00:26:29,040 --> 00:26:33,159 Speaker 1: a way to drive loyalty to Comcast Internet services and 539 00:26:33,200 --> 00:26:35,920 Speaker 1: really control the bundle as they did during the cable 540 00:26:35,960 --> 00:26:39,160 Speaker 1: TV era and Tera. Thanks so much for that rundown, 541 00:26:39,160 --> 00:26:42,360 Speaker 1: We really appreciated it. Some interesting numbers out of a Netflix. 542 00:26:42,440 --> 00:26:44,800 Speaker 1: Last night's stockdown about six point six percent, but, as 543 00:26:44,800 --> 00:26:47,400 Speaker 1: Tara pointed out, had a big run so far this year. 544 00:26:47,600 --> 00:26:51,919 Speaker 1: Tara la Chapelle Bloomberg Opinion, Media and Entertainment Calmness for 545 00:26:52,000 --> 00:26:54,359 Speaker 1: Bloomberg Opinion. You can read her work and all of 546 00:26:54,359 --> 00:26:57,720 Speaker 1: the fine work of Bloomberg Opinion writers at Bloomberg dot Com, 547 00:26:57,800 --> 00:27:01,439 Speaker 1: Slash Opinion or O P. I N Go on the terminal. 548 00:27:01,680 --> 00:27:03,920 Speaker 1: I guess, Vonnie. One of the questions remains is how 549 00:27:03,920 --> 00:27:06,040 Speaker 1: many services do you and I and everybody else do 550 00:27:06,080 --> 00:27:08,280 Speaker 1: we want to pay for going forward? Well, I'm afraid 551 00:27:08,280 --> 00:27:10,400 Speaker 1: to count the ones that I'm currently paying for her 552 00:27:10,440 --> 00:27:12,440 Speaker 1: poll because even though I keep thinking I'll call the core, 553 00:27:12,520 --> 00:27:17,720 Speaker 1: there's something about watching something that's actually on now. There's 554 00:27:17,760 --> 00:27:20,240 Speaker 1: something that keeps you attached to the world. I think, 555 00:27:20,240 --> 00:27:23,159 Speaker 1: at least, you know, for me, for the moment. I 556 00:27:23,200 --> 00:27:24,760 Speaker 1: know a lot of people don't feel that way. But 557 00:27:25,240 --> 00:27:27,479 Speaker 1: I you know, I'd like to tune into things at 558 00:27:27,520 --> 00:27:29,600 Speaker 1: a certain time sometimes, Yeah, exactly, And that we've seen 559 00:27:29,680 --> 00:27:32,639 Speaker 1: courd cutting, you know, accelerate actually from the cable companies 560 00:27:32,640 --> 00:27:35,720 Speaker 1: in the most recent quarter despite the pandemic, so people 561 00:27:35,720 --> 00:27:39,800 Speaker 1: are really embracing streaming technologies and some of the skinny 562 00:27:39,840 --> 00:27:43,119 Speaker 1: bundles out there. And again Netflix adding ten million subscribers 563 00:27:43,160 --> 00:27:45,480 Speaker 1: in the second quarter, fifteen million in the first quarter. 564 00:27:45,520 --> 00:27:49,840 Speaker 1: They have close to two million subscribers worldwide. Thanks for 565 00:27:49,880 --> 00:27:53,000 Speaker 1: listening to the Boomberg Markets podcast. You can subscribe and 566 00:27:53,119 --> 00:27:56,880 Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform 567 00:27:56,920 --> 00:28:00,359 Speaker 1: you prefer. I'm Bonnie Quinn, I'm on Twitter app Quinn, 568 00:28:00,520 --> 00:28:02,920 Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney. 569 00:28:02,960 --> 00:28:05,600 Speaker 1: Before the podcast, you can always catch us worldwide at 570 00:28:05,640 --> 00:28:06,440 Speaker 1: Bloomberg Radio.