WEBVTT - Markets, The Fed, And Satellites 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.119 at Bloomberg dot com slash podcast. Danielle di Martino booth, 0:00:23.160 --> 0:00:25.160 let's get right to her. She's a CEO and chief 0:00:25.160 --> 0:00:28.479 strategist for Quill Intelligence, also a former advisor at the 0:00:28.480 --> 0:00:32.279 Federal Reserve Bank of Dallas. So, Danielle, thanks so much 0:00:32.440 --> 0:00:34.159 for taking the time. I guess where I want to 0:00:34.200 --> 0:00:36.960 start with is you know, during the press conference from 0:00:37.000 --> 0:00:41.040 FED Chairman Pal there's obviously questions about potentially a recession 0:00:41.200 --> 0:00:44.800 slowing growth, and he took a pretty aggressive tact and 0:00:44.880 --> 0:00:47.280 pushing back on that narrative. What's your take? What do 0:00:47.320 --> 0:00:50.319 you think he's trying to do well. I think he's 0:00:50.320 --> 0:00:53.520 trying to do his job, which is to use FED 0:00:53.600 --> 0:00:58.480 speak to its fullest and to induce confidence in the 0:00:58.560 --> 0:01:02.120 markets and induced confidence among those who are listening to him, 0:01:02.160 --> 0:01:05.160 to say we've got this under control. We're going to 0:01:05.200 --> 0:01:08.600 be able to to navigate a soft landing. And of 0:01:08.640 --> 0:01:12.680 course today we've heard that from from Governor Waller. We've 0:01:12.720 --> 0:01:16.680 heard the month July in terms of when they're looking 0:01:16.680 --> 0:01:20.040 at starting that balance sheet runoff. That would explain why 0:01:20.120 --> 0:01:22.839 they used the phrase coming months. So clearly they think 0:01:22.840 --> 0:01:27.040 that this spate of inflation that's induced by Russia invading 0:01:27.120 --> 0:01:29.640 Ukraine is going to be short lived and possibly be 0:01:29.720 --> 0:01:31.800 coming off the time we get towards the end of summer. 0:01:31.959 --> 0:01:37.760 Was he doing his job last year, Danielle, Oh gosh, no, heavens, no, no, no, no, no. 0:01:38.000 --> 0:01:42.760 You just saw first time homebuyers decreased. The National Association 0:01:42.800 --> 0:01:45.600 of Realtors at Laurence June said that that a payment 0:01:45.600 --> 0:01:48.920 in February was higher than it was a year earlier. 0:01:49.120 --> 0:01:51.560 At a minimum, you could say, you know what, we'll 0:01:51.600 --> 0:01:54.320 hold off on treasury run off, but we'll go ahead 0:01:54.560 --> 0:01:58.280 and be responsible to homebuyers who cannot buy homes because 0:01:58.280 --> 0:02:00.560 they're too expensive. Will be respond will and let those 0:02:00.560 --> 0:02:04.280 mortgage backs start to run off by themselves before treasuries. So, Daniel, 0:02:04.320 --> 0:02:06.800 what do you take of this new wrinkle. I guess 0:02:06.840 --> 0:02:09.880 it's just from an economic perspective into the equation, which 0:02:09.919 --> 0:02:13.320 is a hot shooting war in Eastern Europe. If I'm 0:02:13.360 --> 0:02:16.320 the Federal Reserve, I've got inflation, I've got slowing growth. 0:02:16.800 --> 0:02:19.600 Now I've got this geopolitical risk at how do you 0:02:19.600 --> 0:02:24.840 think that factors into the Fed's calculus. Well, it should 0:02:24.880 --> 0:02:27.520 obviously be a factor, right, This is a this is 0:02:27.560 --> 0:02:31.799 a new idiosyncrasy that's going to affect confidence. Bank of 0:02:31.840 --> 0:02:36.119 America has a their own proprietary confidence gauge. It fell 0:02:36.160 --> 0:02:39.000 to the lowest in history in the week through March thirteenth. 0:02:39.360 --> 0:02:42.920 So there's clearly a dent being made. And people are 0:02:42.919 --> 0:02:46.000 watching the headlines and they're disturbing. I get that. But 0:02:46.280 --> 0:02:50.760 the primary source of economic new news out of this 0:02:50.880 --> 0:02:53.720 situation is that it's pushing inflation higher. And I think 0:02:53.720 --> 0:02:55.639 that that's a greater offset and that they should look 0:02:55.639 --> 0:02:58.440 at it through that lens. Because of the high starting 0:02:58.440 --> 0:03:02.359 point of gasoline prices rising year over year in Intebrary 0:03:02.440 --> 0:03:04.799 CPI yeah, if it's just filled up on the way 0:03:04.800 --> 0:03:07.400 to work today for well over five dollars a gallon, 0:03:07.440 --> 0:03:09.960 which I guess I should consider myself lucky. Because the 0:03:10.000 --> 0:03:13.280 Germans are hoping for legislation that lowers their gas bills 0:03:13.320 --> 0:03:16.200 to eight dollars a gallon. They feel like that should Well, 0:03:16.280 --> 0:03:20.080 I get concerned when we start throwing around price fixing 0:03:20.120 --> 0:03:23.160 because central bankers all talk to each other, So I 0:03:23.160 --> 0:03:25.840 don't don't want anybody getting any ideas here in the 0:03:25.919 --> 0:03:28.200 United States about price fixing. You can look back and 0:03:28.280 --> 0:03:30.639 google Nixon and price fixing and see how that ended. No, 0:03:31.040 --> 0:03:35.040 agree one percent. The thing is the price is already 0:03:35.080 --> 0:03:38.840 fixed in Germany because like cent of what you pay 0:03:38.880 --> 0:03:41.440 at the pump is taxes, you know, so all they 0:03:41.480 --> 0:03:43.200 need to do is reduce some of that burden. And 0:03:43.240 --> 0:03:46.880 I'm sure we have a similar, uh not nearly as bad, 0:03:46.920 --> 0:03:50.360 but um similar tax burden here. What I was going 0:03:50.400 --> 0:03:55.120 to ask about is um the growth, the slowing growth? 0:03:55.240 --> 0:03:58.760 I guess is it the bigger concern. And it looks 0:03:58.800 --> 0:04:01.920 like when you have a Moody shock, which we have had, 0:04:02.040 --> 0:04:05.120 or when you have the fed um starting to raise rates, 0:04:05.160 --> 0:04:07.880 which we have, or when you have yield curves invert, 0:04:07.920 --> 0:04:12.360 which we saw yesterday. Um, these things all tend to 0:04:12.440 --> 0:04:16.080 lead to recessions. Not necessarily you're gonna have a recession 0:04:16.080 --> 0:04:18.120 after that, but you know, all three of them at once. 0:04:18.320 --> 0:04:22.080 Do we have a recession next year. I'm not so sure. 0:04:22.600 --> 0:04:25.280 My good friend Peter Jucchini said this morning that his 0:04:25.360 --> 0:04:29.000 base cases is a recession in two based purely on 0:04:29.040 --> 0:04:32.279 what he seen in the rapidity of the cycle compression. 0:04:32.800 --> 0:04:36.240 We we got accustomed to ten years of expansion, and 0:04:36.240 --> 0:04:38.720 now we're talking about things happening inside of a two 0:04:38.720 --> 0:04:42.200 to three year vacuum. So there's no reason to go 0:04:42.320 --> 0:04:45.119 by the old playbook that suggests that once we see 0:04:45.360 --> 0:04:48.320 yield curves flirting with inversion, that it shouldn't be a 0:04:48.320 --> 0:04:51.640 faster runway between that moment and when we go into 0:04:51.720 --> 0:04:55.000 an actual contraction. And again, this is a byproduct of 0:04:55.040 --> 0:04:57.960 the Fed waiting too long last year to take the 0:04:57.960 --> 0:05:02.320 opportunity of beginning to normalize. Then were you surprised at all, 0:05:02.360 --> 0:05:04.440 at Danielle, that they did not raised by fifty basis 0:05:04.520 --> 0:05:08.280 points this week. I was not surprised at all that 0:05:08.279 --> 0:05:10.839 that did not surprise me in the least. I was 0:05:10.920 --> 0:05:13.520 shocked that they said in coming months about the balance sheet. 0:05:13.880 --> 0:05:15.680 And I'm even more shocked because now that we have 0:05:15.720 --> 0:05:18.159 Waller out on the wires, you know what was what's 0:05:18.200 --> 0:05:21.400 being contemplated among those on the Federal Open Market Committee 0:05:21.440 --> 0:05:23.640 and that right now appears to be July. So I 0:05:23.680 --> 0:05:26.400 was expecting there to there to be an indication that 0:05:26.480 --> 0:05:28.680 the balance sheet run up would start in May. And 0:05:28.760 --> 0:05:30.920 even is it going to be eighty billion dollars a 0:05:30.960 --> 0:05:32.960 month or a hundred billion dollars a month. Lorie Logan 0:05:33.040 --> 0:05:35.480 of the New York Fed Markets Desk and John Williams, 0:05:35.520 --> 0:05:37.640 the President of the New York Fits, they've been fairly 0:05:38.560 --> 0:05:42.240 explicit in terms of where they saw that balance sheet 0:05:42.279 --> 0:05:45.440 run up beginning, at what levels, and how aggressively they 0:05:45.440 --> 0:05:47.560 would they would have it run, which would be more 0:05:47.600 --> 0:05:50.320 aggressively than the last time they attempted this. And yet 0:05:50.720 --> 0:05:53.280 they appeared to be extremely hesitant on this tack. And 0:05:53.320 --> 0:05:55.480 that was what surprised me the most. Okay, Daniel D. 0:05:55.560 --> 0:05:58.320 Martino Booth, we knew we'd get the clean skinny on 0:05:58.440 --> 0:06:00.880 what's going on with our federal reserve. Daniel D. Martino Booth, 0:06:01.000 --> 0:06:05.840 CEO and chief strategist A Quill Intelligence still concerned that 0:06:06.240 --> 0:06:09.520 the photo Reserve is behind the curve here. Yeah, and 0:06:09.520 --> 0:06:11.560 and the risk is that they get a little too 0:06:11.600 --> 0:06:13.640 aggressive to try and catch up, and and that's what 0:06:13.680 --> 0:06:16.359 could push you into It's unlikely they'll do that with 0:06:16.400 --> 0:06:18.159 the balance sheet, right, I mean, remember when they wanted 0:06:18.200 --> 0:06:20.599 to reduce the four trillion dollar balance sheet, which was 0:06:20.600 --> 0:06:25.080 already i poppingly large. Um, just a couple of years later, 0:06:25.480 --> 0:06:30.880 we're looking at nine trillions son nine times nine times 0:06:31.200 --> 0:06:37.680 for those that get the reference. We've got some ECO 0:06:37.760 --> 0:06:40.919 data out. Got the Leading Economic Indicator came out today 0:06:41.080 --> 0:06:42.720 pretty decent. I'm gonna say I'm not you know, I 0:06:42.760 --> 0:06:44.920 think our economy hanging in there, but let's get the details. 0:06:44.960 --> 0:06:48.960 Automan Azoldrum, Senior director of Economic Research at the conference Board. 0:06:48.960 --> 0:06:51.920 Ottoman talked to us about the Leading Economic Indicator data 0:06:52.000 --> 0:06:55.040 that just came out this morning. Yeah, good morning to 0:06:55.080 --> 0:06:58.400 be here. So, yes, the Leading Economic Index came out 0:06:58.480 --> 0:07:02.960 this morning. It increased about zero point three percent in February. 0:07:03.680 --> 0:07:09.440 That's reversing the revised decline from January, and overall, the 0:07:09.680 --> 0:07:15.560 Leading Economic Index remains on a moderately rising trajectory, pointing 0:07:15.640 --> 0:07:20.040 to continuing expansion for the US economy. So, after after 0:07:20.160 --> 0:07:23.440 weathering the omicrond wave in the beginning of the year, 0:07:23.880 --> 0:07:27.200 the US economy UM is in fairly good shape in 0:07:27.240 --> 0:07:30.920 the first quarter. But what can you see about UM? 0:07:30.960 --> 0:07:35.880 What's to come? Right? So there are some clouds in 0:07:35.880 --> 0:07:39.800 the horizon UM. And we've been uh, you know, looking 0:07:39.920 --> 0:07:46.040 at what inflation means for household budgets, UH, consumer spending. 0:07:46.880 --> 0:07:51.080 We look at the volatility in stock prices UM and 0:07:51.400 --> 0:07:55.400 one of the negative contributors this month was a building 0:07:55.440 --> 0:08:00.840 permit spell and the housing construction sector is likely to 0:08:00.880 --> 0:08:04.240 be negatively affected, you know, as the Fed continues to 0:08:04.600 --> 0:08:07.800 raise rates for the rest of the year. So you know, 0:08:07.840 --> 0:08:11.360 there are some clouds that will slow growth UM. And 0:08:11.600 --> 0:08:14.440 we've seen that in you know, some of the UH 0:08:14.640 --> 0:08:19.680 growth numbers getting revised for two UM. And unfortunately, on 0:08:19.760 --> 0:08:24.800 top of that, we have the Russian invasion of Ukraine 0:08:25.240 --> 0:08:29.800 that is creating made a major shock for the global economy. UH. 0:08:29.840 --> 0:08:33.920 So it's it could also lower the trajectory and lower 0:08:33.960 --> 0:08:37.240 growth rates further for two It's kind of where I 0:08:37.240 --> 0:08:40.400 wanted to go Outoman. I think some folks are saying, hey, 0:08:40.400 --> 0:08:44.640 when you put these rapid and significant rate increases along 0:08:44.720 --> 0:08:48.400 with a shooting war in Europe, that might be enough 0:08:48.440 --> 0:08:52.080 to push you know, some economies into a recession. Is 0:08:52.080 --> 0:08:54.520 the R word in your vocabulary for the next year 0:08:54.559 --> 0:08:59.120 or two? Uh not yet. So you know, the leading 0:08:59.160 --> 0:09:02.840 economic indey is a gauge of recessions. It's used for 0:09:02.920 --> 0:09:08.080 predicting recessions, and so far it hasn't been signaling anything 0:09:08.160 --> 0:09:11.040 like that. And looking ahead, we have to watch that 0:09:11.880 --> 0:09:16.360 very carefully. But the you know, underlying trend trajectory for 0:09:16.440 --> 0:09:21.680 the US economy has been fairly healthy. UM and um. 0:09:21.679 --> 0:09:25.200 You know, even though revising growth rates down to around 0:09:25.200 --> 0:09:30.240 three percent for UM, we we are still looking at 0:09:30.760 --> 0:09:37.840 pretty robust above average growth rates in terms of what 0:09:37.960 --> 0:09:41.480 the Fed does here. Um. Do you get the idea 0:09:41.559 --> 0:09:47.120 that this is hurting the leading indicators? Uh, it does 0:09:47.520 --> 0:09:52.640 create a potential downward risk for many leading indicators as 0:09:52.640 --> 0:09:55.120 well as for the economy. Of course, that's what we're 0:09:55.160 --> 0:09:59.079 trying to measure here. UM. So as those rates start 0:09:59.160 --> 0:10:02.480 to go up to find inflation, we're going to begin 0:10:02.559 --> 0:10:06.480 to see the impact starting out, you know, spilling over 0:10:06.559 --> 0:10:09.679 into mortgage rates and credit card rates, and those are 0:10:09.720 --> 0:10:13.839 the channels or mechanisms that work to slow the economy 0:10:14.360 --> 0:10:19.199 and attempt to control inflation. So, UM, we will begin 0:10:19.280 --> 0:10:23.880 to see some of that. But compared to the negative 0:10:23.920 --> 0:10:29.600 effect of uncontrolled inflation on consumers purchasing power, it's uh, 0:10:29.640 --> 0:10:32.760 it's not de preferable. All right, olduman, thank you so 0:10:32.880 --> 0:10:34.920 much for joining us and breaking down some of this 0:10:35.200 --> 0:10:39.160 leading economic indicator data. Otoman also Drum, Senior director of 0:10:39.240 --> 0:10:44.640 Economic Research at the Conference Board. All Right, Matt, here 0:10:44.679 --> 0:10:47.280 you go. You go get your bachelor's of Science and 0:10:47.280 --> 0:10:52.400 mechanical engineering from Berkeley, and then you cross the metaphorical 0:10:52.440 --> 0:10:55.520 street and get your pH d in material science and 0:10:55.600 --> 0:10:58.559 engineering from Stanford. Then what do you do? You go 0:10:58.640 --> 0:11:01.439 to Wall Street. That's what our next guested Interesting Play 0:11:01.679 --> 0:11:05.960 Anchor Crawford, Executive vice president portfolio manager, Fred Alger Asset 0:11:06.000 --> 0:11:08.800 Management Anchored. Thanks so much for joining us. You appreciate 0:11:08.880 --> 0:11:11.800 you taking the time. All right, you've got all these 0:11:12.040 --> 0:11:17.440 engineering degrees. How do you apply that stuff to the markets? Actually, 0:11:17.480 --> 0:11:22.240 I don't. Parents are saying, Oh my goodness, I know 0:11:22.360 --> 0:11:25.440 that is actually what they said. But um, you know, 0:11:25.520 --> 0:11:29.000 I think with engineering, all it is is pattern recognition. 0:11:29.040 --> 0:11:30.880 At the end of the day, what we look for, 0:11:31.000 --> 0:11:33.920 even as investors, is different patterns in the market, different 0:11:33.920 --> 0:11:37.600 patterns and companies and stocks in the numbers. And so 0:11:38.120 --> 0:11:40.880 you really take that learning as an engineer and I'm 0:11:40.920 --> 0:11:44.240 able to apply it to the markets. What are you 0:11:44.240 --> 0:11:45.960 seeing in those markets? Right now. What are the patterns 0:11:45.960 --> 0:11:48.440 you're seeing, because boy, you've got a lot of cross 0:11:48.440 --> 0:11:50.200 currents on there that you have a lot of bricks 0:11:50.200 --> 0:11:51.920 in that wall of worry. Now you get to add 0:11:52.160 --> 0:11:54.880 geopolitical risks. How are you viewing the market right now? 0:11:55.760 --> 0:11:58.240 You know it is the market is actually quite fascinating 0:11:58.320 --> 0:12:00.480 right now in um. You know, we the end of 0:12:00.520 --> 0:12:03.320 COVID and the return of normalism and a return to 0:12:03.360 --> 0:12:07.000 normalization of COVID, at least in the US. We have 0:12:07.160 --> 0:12:12.480 this geopolitical risk that we haven't experienced in three generations. UM. 0:12:12.559 --> 0:12:16.400 We have reverberations of all of these effects on the 0:12:16.400 --> 0:12:19.160 supply chains causing inflation readings that we haven't seen in 0:12:19.240 --> 0:12:23.600 four decades. UM. So there's a lot of different cross currents, 0:12:23.600 --> 0:12:26.760 as you mentioned, in the market right now. However, what 0:12:26.800 --> 0:12:30.240 we're focused on is really understanding what's getting baked in 0:12:30.840 --> 0:12:33.360 and so we are very deep in the numbers for 0:12:33.520 --> 0:12:36.880 each of the businesses that we own, and we we 0:12:37.000 --> 0:12:41.040 probability weight the the effect of our recession for example, 0:12:41.240 --> 0:12:44.200 and UM, well sorry, what was that? What what what's 0:12:44.240 --> 0:12:47.840 your probability of recession? Oh, we don't, we don't. We 0:12:47.880 --> 0:12:50.520 just probability weighted, so we say, if there's a five 0:12:50.520 --> 0:12:52.800 percent probability of a recession, this is where we think 0:12:52.840 --> 0:12:55.600 the bare case will be, or the numbers should go 0:12:55.640 --> 0:13:00.160 to if there's um probability of a recession, and the 0:13:00.200 --> 0:13:03.160 numbers will toggle down right, So we basically can tuggle 0:13:03.280 --> 0:13:06.400 the probability of recession up and down in the numbers. 0:13:06.480 --> 0:13:09.600 And what we found is that really there's some of 0:13:09.600 --> 0:13:12.800 these businesses that we're looking at, especially in the growth sector, 0:13:13.200 --> 0:13:18.160 that have gotten completely sold off over the last three months, 0:13:18.679 --> 0:13:21.199 are trading at free cash flow yields even in a 0:13:21.200 --> 0:13:25.200 more recessionary case, that are quite compelling, especially relative to 0:13:25.240 --> 0:13:27.720 the cash flow yield of the S and P. So 0:13:27.960 --> 0:13:31.200 it is interesting because the market is has very quickly 0:13:31.320 --> 0:13:35.160 baked in a much higher probability of a recessionary case 0:13:35.160 --> 0:13:37.400 scenario because of all these cross currents that we had 0:13:37.400 --> 0:13:40.160 talked about. So, which companies do you think anchor do 0:13:40.280 --> 0:13:43.000 well and even in a recession case, not saying that 0:13:43.040 --> 0:13:46.800 we're having a recession, but if we do, where do 0:13:46.800 --> 0:13:50.680 you want to be? So look, I think I think 0:13:50.679 --> 0:13:52.720 the recession is going to at least in the US 0:13:52.960 --> 0:13:55.600 if if we do have a recession, which I am. 0:13:55.640 --> 0:13:57.920 I am very much on a fense about if we 0:13:58.040 --> 0:14:00.240 see a recession in the US. In part, they because 0:14:00.240 --> 0:14:03.280 the consumer is so incredibly resilient, they have two point 0:14:03.320 --> 0:14:06.439 five trillion dollars of express savings that can be used 0:14:06.480 --> 0:14:09.520 to thwart off the effects of a recession. UM they 0:14:09.520 --> 0:14:12.120 have under leveraged balance sheets still that they can the 0:14:12.160 --> 0:14:16.120 consumer can still lever up. However, if UM, you know, 0:14:16.160 --> 0:14:19.120 there are several very interesting themes in the market right 0:14:19.160 --> 0:14:23.600 now that have duration and have growth aspects that that 0:14:23.640 --> 0:14:26.920 are almost uh not related to the economy and so 0:14:27.160 --> 0:14:29.120 in in big tech, if you look at a company 0:14:29.160 --> 0:14:34.000 like Microsoft, UM you know of that business is they 0:14:34.040 --> 0:14:37.080 have visibility over the next year into the into the revenues, 0:14:37.160 --> 0:14:41.080 and so you know, even in a recessionary case scenario, 0:14:41.160 --> 0:14:42.760 the number is on the on the top and the 0:14:42.760 --> 0:14:44.880 bottom line. I am not going to flex up and 0:14:44.920 --> 0:14:47.760 down all that much, in part because they're really the 0:14:47.840 --> 0:14:52.000 hub of this digital transformation and industrial revolution that we 0:14:52.040 --> 0:14:55.200 are experiencing right now. UM. On the other hand, if 0:14:55.200 --> 0:14:57.400 you look at consumer, we believe that the higher end 0:14:57.440 --> 0:15:01.880 consumer will be also quite resilient and they have a 0:15:02.240 --> 0:15:05.240 great wealth effect that they've experienced from both the market, 0:15:05.240 --> 0:15:07.680 home prices both going up over the last few years, 0:15:08.280 --> 0:15:12.720 and their businesses like Veil Mountain resorts that are trading 0:15:12.720 --> 0:15:14.760 at five and six percent free cash full yields as 0:15:15.000 --> 0:15:17.760 you look out a couple of years, and we think 0:15:17.800 --> 0:15:21.800 that they will be relatively resilient through through UM a 0:15:21.920 --> 0:15:25.440 slowdown in the economy. Anchor energy has had a nice 0:15:25.520 --> 0:15:27.840 run here got oil north of a hundred dollars a 0:15:27.880 --> 0:15:32.040 barrel w T I has that trade played out? Has 0:15:32.080 --> 0:15:33.960 which trade played out? Kind of the energy trade just 0:15:34.040 --> 0:15:37.160 kind of being long energy? You know what? I think? 0:15:37.920 --> 0:15:41.800 I think we're not going back to energy and stock 0:15:41.880 --> 0:15:45.520 prices where they were at thirty dollars of barrel um 0:15:45.560 --> 0:15:49.480 in part because of like people are realizing that the 0:15:49.480 --> 0:15:54.640 there's this very strategic aspect to oil and UM. But 0:15:54.800 --> 0:15:57.080 has it played out? I think I think it has 0:15:57.400 --> 0:15:59.960 and in part the global economies will start to slow 0:16:00.800 --> 0:16:03.960 UM and demand for for oil will will decline and 0:16:04.040 --> 0:16:07.640 so UM. You know, I do I do think that 0:16:07.680 --> 0:16:11.440 it has mostly played out. That said, I do think 0:16:11.480 --> 0:16:16.280 that oil stays higher for longer UM and maybe not 0:16:16.360 --> 0:16:19.320 at one forty where it got to at its peak, 0:16:20.040 --> 0:16:22.360 but could it could it stay at eighty bucks for 0:16:22.400 --> 0:16:24.840 a long time it could. All right, uncle, thank you 0:16:24.880 --> 0:16:27.920 so much for joining us. Really appreciate you taking the time. 0:16:27.920 --> 0:16:31.040 And Court Crawford, e v P and portfolio manager for 0:16:31.040 --> 0:16:39.320 Fred Alger Management. Let's talk space. Let's talk satellites. I 0:16:39.320 --> 0:16:41.400 mean you can see basically what the satellites we have 0:16:41.440 --> 0:16:44.920 in the air these days. You can see just about anything. 0:16:44.920 --> 0:16:47.680 You can get a picture of just about anything. Peter Platts, 0:16:47.760 --> 0:16:51.840 or CEO of Spire, joins us. Spire is a publicly 0:16:51.880 --> 0:16:54.800 traded company went public via a spack it looks like 0:16:54.880 --> 0:17:00.160 back in UM. Yeah, they offered twenty three million is 0:17:00.200 --> 0:17:02.440 at ten dollars via my good friends of credits. Sweet. 0:17:02.560 --> 0:17:04.840 All right, Peter, talk to us about Spire. Give us 0:17:04.840 --> 0:17:07.520 the thirty second elevator pitch. What inspire? What are you 0:17:07.520 --> 0:17:11.560 guys up to these days? Absolutely appitude. We are a 0:17:11.680 --> 0:17:15.800 data and analytics company and we're leveraging space to solve 0:17:15.960 --> 0:17:20.080 business and e s G challenges for companies, countries and 0:17:20.160 --> 0:17:24.320 communities all across the world. We are We designed and 0:17:24.480 --> 0:17:28.840 launched and owned and operate the world's largest radio frequency 0:17:28.880 --> 0:17:32.960 based UM satellite constellation to observe the Earth. You know, 0:17:33.040 --> 0:17:36.760 we track some seventeen trillion dollars of global trade, the 0:17:37.240 --> 0:17:41.120 two trillion dollar aviation industry, and the weather all across 0:17:41.160 --> 0:17:45.560 the globe, which you also predict up to ten days out. Um. 0:17:45.880 --> 0:17:47.679 And as you as well know that whether it is 0:17:47.720 --> 0:17:50.679 impacting you know, at least twenty five trillion of global 0:17:50.720 --> 0:17:54.600 GDP in with climate change that is just getting more extreme, 0:17:54.680 --> 0:17:57.680 you know, almost every single week. I want to say, um, 0:17:58.359 --> 0:18:06.080 we serve do you watch this war? Yes, we do, UM. 0:18:06.320 --> 0:18:08.520 And you know it is with data and insights from 0:18:08.600 --> 0:18:13.439 space that the truth and transparency can be shed on 0:18:13.600 --> 0:18:15.920 on such a global conflict. And I think we have 0:18:16.040 --> 0:18:19.879 been witnessing this really firsthand um as it relates to 0:18:19.920 --> 0:18:23.280 the situation in the Ukraine right now, UM, with with 0:18:23.359 --> 0:18:27.399 commercial companies like a spire really bringing that data and 0:18:27.480 --> 0:18:31.520 transparency to the world. UM. You know, our data has 0:18:31.560 --> 0:18:34.719 been used by humanitarian efforts, you know, by the media 0:18:34.840 --> 0:18:38.960 to bring that that knowledge and transparency as well as 0:18:38.960 --> 0:18:40.920 some other areas as I'm sure you can you can 0:18:40.960 --> 0:18:46.440 probably imagine and really being able to participate, um, helping 0:18:46.600 --> 0:18:50.640 people and humanity in you know, this particular situation as 0:18:50.640 --> 0:18:54.520 a European is uh, like I'm I'm from Austria is 0:18:54.520 --> 0:18:58.080 something that is very very meaningful to me personally, so Peter. 0:18:58.280 --> 0:19:00.680 The supply chain, global supply chains, but a big, big 0:19:00.720 --> 0:19:04.240 issue for the world's economies. It's a global story. People 0:19:04.240 --> 0:19:06.000 are always trying to figure out where are the ships, 0:19:06.040 --> 0:19:09.600 where the trucks, where the trains? Um, how have you 0:19:09.680 --> 0:19:13.160 kind of taken a look at that side of the business. 0:19:13.160 --> 0:19:15.400 So supply chain is a is a very very nice 0:19:15.440 --> 0:19:19.800 industry for us UM from a customer perspective. UM we 0:19:20.080 --> 0:19:23.680 track all of the world ships, where they are, where 0:19:23.680 --> 0:19:26.240 they're going, what they're doing, how fast they are, where 0:19:26.240 --> 0:19:29.800 they will arrive, why they will arrive, as well as 0:19:30.359 --> 0:19:34.000 the planes. And then as you imagine, once you are 0:19:34.119 --> 0:19:38.800 on land and transportation happens in trucks, then whether it 0:19:38.880 --> 0:19:42.520 has a massive impact on on potential disruptions there and 0:19:42.560 --> 0:19:45.560 so everything from uh you know, the blocking of the 0:19:45.600 --> 0:19:48.560 Suez Canal and the and the ripple effects all across 0:19:48.600 --> 0:19:51.399 the world on the ports um to you know, just 0:19:51.440 --> 0:19:54.880 today we put out a little story about the shutting 0:19:54.880 --> 0:19:57.560 down of of Shenzen. You know, we have been able 0:19:57.640 --> 0:20:01.639 to to monitor those activities and then help our customers, 0:20:01.960 --> 0:20:06.159 uh preempt them and know what to do based on 0:20:06.240 --> 0:20:08.320 what is happening and how they can get a bit 0:20:08.359 --> 0:20:11.320 of a leg up in their own supply chain management, 0:20:11.680 --> 0:20:13.880 and then their understanding of what is happening to their 0:20:13.920 --> 0:20:16.760 own supply chain based on the data and analytics that 0:20:16.800 --> 0:20:21.720 we can provide them. In terms of UM, your company, 0:20:21.800 --> 0:20:27.240 your stock has come down pretty substantially over the last 0:20:27.720 --> 0:20:32.600 I guess six months. What's going on there? You know, honestly, 0:20:32.640 --> 0:20:35.240 if if if I could predict the understand the market 0:20:35.280 --> 0:20:38.199 with great certainty, I'll probably spent more time in Vegas 0:20:38.200 --> 0:20:41.280 and rather than helping our customers. But I think I 0:20:41.320 --> 0:20:43.600 think there's there's probably a number of elements. You know. 0:20:43.680 --> 0:20:45.760 One of them is certainly that we are in a 0:20:45.880 --> 0:20:49.879 in a very very risk off environment. I spent I 0:20:49.960 --> 0:20:52.639 spent ten years and LASS so there's a quantitative investment 0:20:52.680 --> 0:20:57.480 manager UMH in longer term trading. And certainly when you 0:20:57.600 --> 0:21:02.880 have situations like uh a geopolitical crisis in Europe, when 0:21:02.920 --> 0:21:06.480 you have a situation like a pandemic UM but then 0:21:06.640 --> 0:21:09.679 at risk of indust rates rising, UM, you know, you 0:21:09.760 --> 0:21:12.280 have a you have a very risk off environment that 0:21:12.440 --> 0:21:16.960 has been you know, very negative for high growth companies UM. 0:21:17.000 --> 0:21:19.480 I think additionally you know, the the products that we 0:21:19.600 --> 0:21:23.680 have serve industries that are vast and large, but they're 0:21:23.760 --> 0:21:26.640 not you know, top of mind for people. I mean 0:21:26.680 --> 0:21:29.600 you started off by talking about the pictures that you 0:21:29.600 --> 0:21:32.680 can get from satellites, but the data that we do 0:21:32.800 --> 0:21:36.720 that cover, for example, you know, four hundred billion dollar 0:21:37.040 --> 0:21:40.560 fishing industry, that's just not as much top of mind, 0:21:41.000 --> 0:21:42.520 and I think I need to do a better job 0:21:42.600 --> 0:21:45.360 in bringing that to life with people. Well, and what's 0:21:45.400 --> 0:21:48.119 the growth outlook, I mean, what kind of revenues are 0:21:48.119 --> 0:21:50.760 you expecting, say this year, and and what the margins 0:21:50.760 --> 0:21:53.560 look like. Yes, so we you know, we had a 0:21:54.520 --> 0:21:57.720 very very strong finish to the year. We exceeded guidance 0:21:58.240 --> 0:22:01.560 both on the UH hop line and bottom line elements 0:22:01.600 --> 0:22:04.080 a region, the very top of it UM fourth quote 0:22:04.119 --> 0:22:07.000 of revenue was fifteen million, up a hundred and six 0:22:07.040 --> 0:22:10.840 percent year of a year UM. We reached seventy one 0:22:10.880 --> 0:22:14.320 million almost of annually recurring revenue, which was in ninety 0:22:14.400 --> 0:22:17.800 six percent year of a year increase. UM guidance for 0:22:17.880 --> 0:22:20.320 this year on the revenue side is eighty five to 0:22:20.440 --> 0:22:22.879 ninety million of revenue, which is a year of a 0:22:22.960 --> 0:22:26.560 year growth rate of over a hundred percent at the midpoint, 0:22:26.960 --> 0:22:31.600 so growth is really really phenomenal. Um, we see the 0:22:31.680 --> 0:22:35.440 demand in every single one off our segments. We see 0:22:35.440 --> 0:22:38.560 it in the h the maritime, the aviation, the weather, 0:22:38.920 --> 0:22:41.920 as well as the space services segment, and we continue 0:22:41.960 --> 0:22:46.840 to drive, you know, very very aggressively to profitability despite 0:22:47.000 --> 0:22:49.639 that high growth rate. He Peter, thanks so much for 0:22:49.680 --> 0:22:52.560 joining us. Really interesting company. Peter Platts or CEO of 0:22:52.680 --> 0:22:55.320 Spire again that trades on the New York Sock Exchange 0:22:55.520 --> 0:23:01.320 sp i R. Thanks for listening to the bloom Markets podcast. 0:23:01.720 --> 0:23:04.920 You can subscribe and listen to interviews with Apple Podcasts 0:23:05.080 --> 0:23:08.960 or whatever podcast platform you prefer. I'm Matt Miller. I'm 0:23:09.000 --> 0:23:13.200 on Twitter at Matt Miller and on Fall Sweeney I'm 0:23:13.200 --> 0:23:15.840 on Twitter at pt Sweeney. Before the podcast. You can 0:23:15.880 --> 0:23:18.120 always catch us worldwide at Bloomberg Radio.