1 00:00:02,800 --> 00:00:05,120 Speaker 1: This is Coast to Coast. I'm Carol Masser and I'm 2 00:00:05,120 --> 00:00:07,440 Speaker 1: Corey Johnson. We're here every day bring you the latest 3 00:00:07,440 --> 00:00:09,480 Speaker 1: news in the world of business and finance and the 4 00:00:09,520 --> 00:00:13,480 Speaker 1: most interesting stories in global technology from Silicon Valley and beyond. 5 00:00:13,600 --> 00:00:17,120 Speaker 1: Powered by are more than journalists and Alice in more 6 00:00:17,120 --> 00:00:19,520 Speaker 1: than one d twenty countries. You can download Coast to 7 00:00:19,560 --> 00:00:22,160 Speaker 1: Coast on iTunes, SoundCloud, and Bloomberg dot Com. You can 8 00:00:22,200 --> 00:00:24,320 Speaker 1: also listen to our radio show weekdays at two o'clock 9 00:00:24,360 --> 00:00:35,479 Speaker 1: Eastern only on Bloomberg Radio. Yes, there are a lot 10 00:00:35,520 --> 00:00:38,839 Speaker 1: of opportunities, particularly in the world of fixed income, if 11 00:00:38,840 --> 00:00:40,839 Speaker 1: you happen to be speaking to Jerry Paul. He is 12 00:00:40,880 --> 00:00:43,920 Speaker 1: the senior vice president of fixed income and portfolio manager 13 00:00:43,960 --> 00:00:47,720 Speaker 1: of the Icon Flexible Bond Fund. They're based in Colorado, 14 00:00:47,720 --> 00:00:50,680 Speaker 1: but he joins us here in our eleven three yoh studio. Jerry, 15 00:00:50,760 --> 00:00:53,559 Speaker 1: thanks very much for coming in. You know, we were 16 00:00:53,600 --> 00:00:57,160 Speaker 1: just speaking before the program about when I asked you 17 00:00:57,200 --> 00:01:00,440 Speaker 1: how your year is going. You said, You're doing great, 18 00:01:00,640 --> 00:01:03,080 Speaker 1: but a lot of your colleagues, a lot of people 19 00:01:03,120 --> 00:01:06,280 Speaker 1: in the bond industry and not having such a great year. 20 00:01:06,360 --> 00:01:09,000 Speaker 1: Maybe just describe to people what do you do that's 21 00:01:09,080 --> 00:01:12,440 Speaker 1: different and why are you having a good year? Well? Thanks, 22 00:01:12,840 --> 00:01:17,200 Speaker 1: thanks for having me on here today. Guys. Uh uh Yeah. 23 00:01:17,240 --> 00:01:21,200 Speaker 1: We do what I refer to as value oriented bond investing. 24 00:01:21,840 --> 00:01:24,320 Speaker 1: We don't pay a lot of attention to what the 25 00:01:24,319 --> 00:01:28,160 Speaker 1: Feds up to obviously we know UM and we don't 26 00:01:28,400 --> 00:01:30,720 Speaker 1: spend a lot of time trying to forecast interest rates. 27 00:01:30,720 --> 00:01:35,720 Speaker 1: We're focused on bond picking or bond like UH instruments. 28 00:01:35,880 --> 00:01:39,959 Speaker 1: Uh uh. An easy example is UH closed in bond funds. 29 00:01:40,040 --> 00:01:44,959 Speaker 1: Not the space that's very well known, trades inefficiently because 30 00:01:45,000 --> 00:01:48,840 Speaker 1: big investors can't get involved with it because it's got 31 00:01:48,840 --> 00:01:53,080 Speaker 1: low liquidity. You know, we had the situation where activists 32 00:01:53,120 --> 00:01:57,880 Speaker 1: are involved and a few weeks ago UH closed in 33 00:01:58,000 --> 00:02:00,320 Speaker 1: fund that was trading at a six and a half 34 00:02:00,360 --> 00:02:04,360 Speaker 1: seven percent discount to the value of the portfolio, announced 35 00:02:04,400 --> 00:02:06,760 Speaker 1: that they were going to merge with an open end 36 00:02:06,800 --> 00:02:12,359 Speaker 1: sistor fund. Immediately that discount disappears. In one fellow, swoop, 37 00:02:12,360 --> 00:02:15,440 Speaker 1: you have a bond that's up five or six points. Uh, 38 00:02:15,480 --> 00:02:17,639 Speaker 1: that's kind of a big deal in in the bond work. 39 00:02:17,720 --> 00:02:19,760 Speaker 1: Tell people what is he? How would you define a 40 00:02:19,800 --> 00:02:22,240 Speaker 1: closed end bond fund for people that are new to 41 00:02:22,360 --> 00:02:25,480 Speaker 1: this world. Well, a closed end bond fund, unlike my 42 00:02:25,600 --> 00:02:31,280 Speaker 1: open end fund UH, is sold and trades on the exchanges. UH. 43 00:02:31,320 --> 00:02:34,120 Speaker 1: And then they are well known for trading at a 44 00:02:34,200 --> 00:02:38,200 Speaker 1: discount to net asset value over time. And there are 45 00:02:38,240 --> 00:02:42,600 Speaker 1: a group of three or four activists out there, UH, 46 00:02:42,760 --> 00:02:48,720 Speaker 1: not carl Icon, but people of that bent, if you will, 47 00:02:49,120 --> 00:02:53,400 Speaker 1: who are intent on getting these funds discounts to close 48 00:02:53,480 --> 00:02:57,240 Speaker 1: up to zero if they can through a liquidation or 49 00:02:57,280 --> 00:03:00,400 Speaker 1: in the case that I just described, an open ending 50 00:03:00,680 --> 00:03:03,919 Speaker 1: and the discount goes away at that point in time. 51 00:03:04,040 --> 00:03:07,560 Speaker 1: As a smaller fund, we can participate in that sort 52 00:03:07,600 --> 00:03:10,760 Speaker 1: of stuff and establish a large enough position for it 53 00:03:10,840 --> 00:03:14,120 Speaker 1: to be significant. I had the fifteen basis point gain 54 00:03:14,600 --> 00:03:18,600 Speaker 1: from just that one situation on the day that that 55 00:03:18,760 --> 00:03:21,560 Speaker 1: all occurred. So that's a big deal in in the 56 00:03:21,600 --> 00:03:25,080 Speaker 1: bond world. How how big a position is your biggest position? Like, 57 00:03:25,120 --> 00:03:26,880 Speaker 1: what what do you wanting to go to in your fund? Well, 58 00:03:26,919 --> 00:03:30,000 Speaker 1: the one that I'm referring to is about the three 59 00:03:30,040 --> 00:03:34,359 Speaker 1: percent position until I went up and and and uh. 60 00:03:34,400 --> 00:03:37,800 Speaker 1: We run a concentrated portfolio. Again, in terms of how 61 00:03:37,840 --> 00:03:41,160 Speaker 1: are we different? UH today I probably only have sixty 62 00:03:41,240 --> 00:03:45,559 Speaker 1: line items in my portfolios as opposed to the thousands 63 00:03:45,640 --> 00:03:49,120 Speaker 1: that some of the larger funds can also. So. Once 64 00:03:49,200 --> 00:03:52,080 Speaker 1: upon a time, I was a portfolio manager at a 65 00:03:52,080 --> 00:03:55,560 Speaker 1: at a value fund value long and short garbage, right, 66 00:03:55,560 --> 00:03:58,040 Speaker 1: that was sort of the long short strategy, but it 67 00:03:58,080 --> 00:04:00,200 Speaker 1: was it was purely focused on equities. And I'm sure 68 00:04:00,280 --> 00:04:03,200 Speaker 1: is how your work might be different than that of 69 00:04:03,280 --> 00:04:06,680 Speaker 1: a value equity investor as a value bonded up. It's 70 00:04:06,840 --> 00:04:10,200 Speaker 1: it's typically driven. What what we're trying to do, Corey, 71 00:04:10,520 --> 00:04:14,960 Speaker 1: is we're trying to identify the chinks in efficiency where 72 00:04:15,360 --> 00:04:19,080 Speaker 1: you know other players can't play, or the bond market 73 00:04:19,120 --> 00:04:24,760 Speaker 1: itself has an inefficiency charter orbitrage. Uh, if you've got 74 00:04:24,760 --> 00:04:28,200 Speaker 1: to split rated bond, the investment grade guys may not 75 00:04:28,240 --> 00:04:30,480 Speaker 1: be able to buy it because a split rated bond 76 00:04:30,520 --> 00:04:33,720 Speaker 1: would typically be double B on one side and triple 77 00:04:33,800 --> 00:04:35,640 Speaker 1: B on the other. What is it I understand that 78 00:04:36,640 --> 00:04:40,200 Speaker 1: a split rate bond a split ray. Again, the Moody's 79 00:04:40,560 --> 00:04:44,279 Speaker 1: rating of let's say, has got a different number on 80 00:04:44,480 --> 00:04:48,200 Speaker 1: different agency ratings, and a lot of the investment grade 81 00:04:48,640 --> 00:04:52,880 Speaker 1: h investors will be restricted that they need both sides 82 00:04:52,920 --> 00:04:56,560 Speaker 1: to be to be investment grade. If you can identify 83 00:04:56,760 --> 00:05:00,160 Speaker 1: that the double B side is likely to go who 84 00:05:00,400 --> 00:05:04,120 Speaker 1: uh triple B. An example that we're playing in right 85 00:05:04,160 --> 00:05:08,800 Speaker 1: now that even your stock investors can relate to is 86 00:05:08,800 --> 00:05:12,960 Speaker 1: the n XP qualcom merger NXP semic Connector, which coms 87 00:05:13,040 --> 00:05:16,680 Speaker 1: in a bid for and exactly and and n XP 88 00:05:16,880 --> 00:05:19,960 Speaker 1: s bonds are b A on one side and triple 89 00:05:20,040 --> 00:05:23,520 Speaker 1: B on the other side. Let's just say Corey that 90 00:05:23,600 --> 00:05:26,279 Speaker 1: you're an investment grade guy. You love the single A 91 00:05:26,400 --> 00:05:31,440 Speaker 1: minus Qualcolm Paper. I can buy the split rate of that. 92 00:05:31,560 --> 00:05:36,080 Speaker 1: You can't yet because you need investment grade on both sides. Uh, 93 00:05:36,640 --> 00:05:40,360 Speaker 1: I can buy that a hundred or whatever cheap to 94 00:05:40,520 --> 00:05:43,840 Speaker 1: Qualcolm Paper. I'm just sitting there like an equity arbitrage 95 00:05:43,920 --> 00:05:47,719 Speaker 1: guy might be today. He's long the n XP stock 96 00:05:47,800 --> 00:05:50,040 Speaker 1: with the view that he's going to get paid, you know, 97 00:05:50,080 --> 00:05:52,880 Speaker 1: a higher price by Qualcolm when the deal gets closed. 98 00:05:53,360 --> 00:05:55,720 Speaker 1: I'm looking for that deal to close. Now. My backup 99 00:05:55,760 --> 00:05:59,560 Speaker 1: plan comes back to the split rated. We think n 100 00:05:59,680 --> 00:06:03,120 Speaker 1: XP is likely to become triple beyond both sides anyway. 101 00:06:03,440 --> 00:06:05,360 Speaker 1: But and if it gets bought out, or even it 102 00:06:05,400 --> 00:06:07,400 Speaker 1: doesn't get bought up, I mean yes, and if it 103 00:06:07,440 --> 00:06:10,320 Speaker 1: gets bought out, then it becomes Qualcolm single a paper, 104 00:06:10,400 --> 00:06:14,120 Speaker 1: and as you guys know, single a paper trades tighter 105 00:06:14,600 --> 00:06:18,120 Speaker 1: than split rated paper. The other day, the twenty one 106 00:06:18,400 --> 00:06:21,440 Speaker 1: or whatever it was, when when we saw bond yields 107 00:06:21,480 --> 00:06:24,480 Speaker 1: getting hit, the n x P bonds actually rose a 108 00:06:24,560 --> 00:06:27,440 Speaker 1: point that day because the news that came out was 109 00:06:27,480 --> 00:06:31,480 Speaker 1: at Qualcolm was raising their bid. So it's those sorts 110 00:06:31,480 --> 00:06:34,600 Speaker 1: of things. Interesting stuff. Jerry Paul, you gotta come back, 111 00:06:34,680 --> 00:06:37,360 Speaker 1: because I really enjoy this conversation. Jerry Paul joins us 112 00:06:37,400 --> 00:06:41,960 Speaker 1: from Colorado. He's portfolio managed of the Icon Advisors Fund. UH. 113 00:06:42,640 --> 00:06:53,960 Speaker 1: Interesting stuff in Yes, we got to love. John Love 114 00:06:54,040 --> 00:06:57,159 Speaker 1: with us right now, the CEO of US Commodity funds UH, 115 00:06:57,200 --> 00:07:00,920 Speaker 1: and they've got some interesting products. Commodities blended into e 116 00:07:01,000 --> 00:07:03,800 Speaker 1: t fs. It's an interesting product in John Love is 117 00:07:03,839 --> 00:07:06,920 Speaker 1: here to describe it. Talk to me about how you 118 00:07:07,440 --> 00:07:11,480 Speaker 1: provide commodity exposure to an E t F investor. Sure, well, 119 00:07:11,520 --> 00:07:14,160 Speaker 1: thanks for having me on. What we basically do is 120 00:07:14,440 --> 00:07:17,520 Speaker 1: by the futures contracts, which is essentially what when people 121 00:07:17,520 --> 00:07:22,360 Speaker 1: are looking at commodities, commodity prices on TV, newspaper, whatever 122 00:07:22,440 --> 00:07:25,360 Speaker 1: they're they're probably looking at a futures price so we 123 00:07:25,360 --> 00:07:27,920 Speaker 1: we own the futures contracts. We have a number of 124 00:07:27,960 --> 00:07:30,120 Speaker 1: single commodity e t f s like U s O 125 00:07:30,280 --> 00:07:33,760 Speaker 1: and U n G, which hold oil and natural gas, respectively. 126 00:07:34,080 --> 00:07:36,120 Speaker 1: And then we have a broad commodity fund U s 127 00:07:36,120 --> 00:07:39,080 Speaker 1: C I, which holds fourteen commodities at a time out 128 00:07:39,080 --> 00:07:41,840 Speaker 1: of a universe of twenty seven and attempts to select 129 00:07:41,840 --> 00:07:44,800 Speaker 1: those that we think will do better that our index 130 00:07:45,240 --> 00:07:48,000 Speaker 1: rules show will do better, to tend to do better 131 00:07:48,000 --> 00:07:50,920 Speaker 1: in the market based on certain conditions. Okay, so should 132 00:07:50,920 --> 00:07:54,720 Speaker 1: the price of the e t F track the price 133 00:07:54,800 --> 00:07:58,560 Speaker 1: of a specific commodity. That's an excellent question um on 134 00:07:58,600 --> 00:08:01,200 Speaker 1: a day to day basis. Yes, So if you're looking 135 00:08:01,200 --> 00:08:04,720 Speaker 1: at a single commodity like crude oil and you're investing 136 00:08:04,720 --> 00:08:08,560 Speaker 1: in the futures contracts, you do have a condition the 137 00:08:09,080 --> 00:08:11,880 Speaker 1: contracts expire, so you're required to roll those contracts on 138 00:08:11,920 --> 00:08:15,400 Speaker 1: a periodic basis, And depending on the shape of the 139 00:08:15,400 --> 00:08:18,560 Speaker 1: future's curve, you can have a condition called contango or 140 00:08:18,560 --> 00:08:21,720 Speaker 1: the reverse of that. The inverse of that is called backwardation, 141 00:08:22,360 --> 00:08:25,080 Speaker 1: and contango can be a headwind to your to your return. 142 00:08:25,120 --> 00:08:26,480 Speaker 1: So you want to be aware of which way the 143 00:08:26,520 --> 00:08:29,480 Speaker 1: market's going. It doesn't mean you can't have a positive return, 144 00:08:29,920 --> 00:08:33,280 Speaker 1: but it is a headwind and backwardation. You actually kind 145 00:08:33,280 --> 00:08:36,559 Speaker 1: of earn roll yield as you own the owen the contracts, 146 00:08:36,559 --> 00:08:38,680 Speaker 1: but that doesn't necessarily mean you're gonna have a have 147 00:08:38,800 --> 00:08:41,319 Speaker 1: a positive return. So one could really screw that up 148 00:08:41,320 --> 00:08:44,400 Speaker 1: and training it's something you have to bear in mind. 149 00:08:44,480 --> 00:08:46,880 Speaker 1: We do have two products that own the whole front 150 00:08:47,080 --> 00:08:50,240 Speaker 1: of the curve and the in oil and natural gas, 151 00:08:50,240 --> 00:08:53,880 Speaker 1: which attempt to mitigate the contango. So if you are looking, 152 00:08:53,960 --> 00:08:56,040 Speaker 1: if you're kind of a longer term holder, that might 153 00:08:56,080 --> 00:08:57,719 Speaker 1: be something that you want to take a look at. 154 00:08:58,040 --> 00:09:00,280 Speaker 1: But we'd also recommend if you really, you know, you 155 00:09:00,280 --> 00:09:03,800 Speaker 1: want commodities because you want the diversification and the inflation protection. 156 00:09:04,120 --> 00:09:06,040 Speaker 1: So you want to go out broad and you can 157 00:09:06,080 --> 00:09:08,720 Speaker 1: get that through um, you know, a broader vehicle that 158 00:09:08,840 --> 00:09:12,120 Speaker 1: gives you exposure to more commodities with different drivers. Now, 159 00:09:12,160 --> 00:09:15,240 Speaker 1: tell us about the basket, the one that that has 160 00:09:15,280 --> 00:09:17,400 Speaker 1: a variety of commodities in it, because we want to 161 00:09:17,400 --> 00:09:22,000 Speaker 1: get to the idea that commodity prices may be trending higher. Sure, um, well, 162 00:09:22,040 --> 00:09:25,120 Speaker 1: a couple of things on that and the product itself 163 00:09:25,320 --> 00:09:27,960 Speaker 1: like I said, it owns fourteen commodities out of a 164 00:09:28,040 --> 00:09:31,080 Speaker 1: universe of twenty seven. We use a rules based methodology 165 00:09:31,080 --> 00:09:33,840 Speaker 1: to select them. We actually look for the least backwards 166 00:09:33,880 --> 00:09:37,600 Speaker 1: or most backwardated contracts or at least contangoed contracts. We 167 00:09:37,640 --> 00:09:40,640 Speaker 1: look at twelve month price momentum, and we rebalance monthly 168 00:09:40,679 --> 00:09:42,880 Speaker 1: to equal weights. So we're trying to give you that 169 00:09:43,000 --> 00:09:46,439 Speaker 1: broad exposure that provides the things that that you're looking 170 00:09:46,440 --> 00:09:49,320 Speaker 1: at as opposed as UH in terms of what you 171 00:09:49,320 --> 00:09:52,240 Speaker 1: you were talking about in terms of the market, UM, 172 00:09:52,280 --> 00:09:55,319 Speaker 1: it is a it is a great way to diversify 173 00:09:55,320 --> 00:09:57,679 Speaker 1: your portfolio. If you look at what the market did 174 00:09:58,240 --> 00:10:02,959 Speaker 1: from January or eight when equities were down, UH, commodities 175 00:10:03,160 --> 00:10:07,560 Speaker 1: show kind of nice horizontal returns as as equities were dropping. 176 00:10:07,679 --> 00:10:10,719 Speaker 1: So it's an interesting way to UH to get out there, 177 00:10:10,840 --> 00:10:15,800 Speaker 1: take advantage of uncorrelated assets, and UH have something in 178 00:10:15,800 --> 00:10:19,160 Speaker 1: your portfolio that's uncorrelated to equities. UH, and yet you've 179 00:10:19,200 --> 00:10:22,720 Speaker 1: got a higher trading burden than most ETFs. I would 180 00:10:22,720 --> 00:10:25,680 Speaker 1: I would argue if you probably like, yeah, I know, Johnson, 181 00:10:25,720 --> 00:10:28,480 Speaker 1: I don't sleep at night. I got it. Yeah, they 182 00:10:28,760 --> 00:10:31,800 Speaker 1: we we do. Obviously depending on the on the product. 183 00:10:32,000 --> 00:10:33,959 Speaker 1: They have different role schedules, but we do have to 184 00:10:34,040 --> 00:10:36,520 Speaker 1: roll the contracts, so you know, at least once once 185 00:10:36,559 --> 00:10:39,080 Speaker 1: a month with us O will be selling our contracts 186 00:10:39,440 --> 00:10:41,760 Speaker 1: with other products. It depends on the role schedule we 187 00:10:41,920 --> 00:10:47,160 Speaker 1: but we do have to uh therefore, uh, what expenses 188 00:10:47,240 --> 00:10:50,960 Speaker 1: higher than your typically DF They may be a bit higher. Um, 189 00:10:51,000 --> 00:10:54,720 Speaker 1: it is not astronomical or or anything crazy, but depending 190 00:10:54,720 --> 00:10:56,640 Speaker 1: on the fund and the frequency of trading, I think 191 00:10:56,640 --> 00:10:59,720 Speaker 1: that can add somewhere between five to fifteen basis points 192 00:10:59,720 --> 00:11:02,599 Speaker 1: to an expense ratio. So it's a factor. But I 193 00:11:02,679 --> 00:11:05,679 Speaker 1: don't think a lot of trading costs with equity funds 194 00:11:05,679 --> 00:11:09,880 Speaker 1: aren't necessarily factored into the expense ratio, so it's not 195 00:11:10,040 --> 00:11:13,240 Speaker 1: something that we see as a huge detriment to the products. Now, 196 00:11:13,360 --> 00:11:17,720 Speaker 1: this United States Commodity Index Fund, the symbol there U 197 00:11:18,000 --> 00:11:22,360 Speaker 1: s C I. How do you determine how much of 198 00:11:22,400 --> 00:11:26,320 Speaker 1: a particular commodity contract to put into the fund? Because 199 00:11:26,320 --> 00:11:29,360 Speaker 1: I'm looking, for example, you've got cotton, you've got ten, 200 00:11:29,480 --> 00:11:32,240 Speaker 1: you've got zinc, You've also got gas, soil as well 201 00:11:32,240 --> 00:11:34,800 Speaker 1: as gold. How do you determine what goes in there? 202 00:11:34,840 --> 00:11:36,960 Speaker 1: I know it's rules based but what are the rules? 203 00:11:37,320 --> 00:11:40,040 Speaker 1: So the rules are number one, we look for seven 204 00:11:40,080 --> 00:11:45,440 Speaker 1: commodities that are either least backward dated or most contangoed. Sorry, 205 00:11:45,720 --> 00:11:48,560 Speaker 1: most backward dated or at least contangoed. So you're looking 206 00:11:48,600 --> 00:11:50,800 Speaker 1: for the optimal place on the front. Why seven, I mean, like, 207 00:11:50,880 --> 00:11:53,599 Speaker 1: why not ten or five? You know the reason? The 208 00:11:53,640 --> 00:11:56,080 Speaker 1: reason for seven there is because we there's another traded 209 00:11:56,200 --> 00:11:58,600 Speaker 1: or another signal that that tends to be very um 210 00:11:58,679 --> 00:12:02,679 Speaker 1: indicative of future commodity performance, which is twelve month price momentum. 211 00:12:02,840 --> 00:12:05,240 Speaker 1: So we decided to kind of split the difference and 212 00:12:05,280 --> 00:12:08,240 Speaker 1: take seven based on one signal, seven based on another. 213 00:12:08,720 --> 00:12:11,680 Speaker 1: We then the size is equal weights every month, so 214 00:12:11,720 --> 00:12:14,480 Speaker 1: we rebalance to those equal weights, and we always make 215 00:12:14,520 --> 00:12:18,040 Speaker 1: sure we're in every single of the six commodity sectors, 216 00:12:18,280 --> 00:12:22,400 Speaker 1: so we're always giving you that broad exposure as opposed 217 00:12:22,400 --> 00:12:26,240 Speaker 1: to overweighting the portfolio to energy or any particular commodity 218 00:12:26,240 --> 00:12:29,120 Speaker 1: of your sector. And that's um. You know, the bottom 219 00:12:29,120 --> 00:12:32,320 Speaker 1: line on the question is um equal weights. That's that's 220 00:12:32,360 --> 00:12:34,880 Speaker 1: the way we think you should go. Because these commodities 221 00:12:34,920 --> 00:12:38,080 Speaker 1: have such different drivers and there's the correlation of your 222 00:12:38,120 --> 00:12:41,680 Speaker 1: any two commodities is about so it's very low compared 223 00:12:41,720 --> 00:12:44,319 Speaker 1: to equities. Well done, Thanks very much for coming in 224 00:12:44,320 --> 00:12:46,880 Speaker 1: and explaining all this to us. John Love is the 225 00:12:46,920 --> 00:12:50,679 Speaker 1: president and the chief executive of the United States Commodity 226 00:12:50,679 --> 00:12:53,760 Speaker 1: Fund that's u s CF. They manage about a three 227 00:12:53,760 --> 00:12:58,000 Speaker 1: and a half billion dollars of customer assets out of Oakland, California. 228 00:12:58,160 --> 00:13:00,840 Speaker 1: Out of Oakland, he's but he's living down in southern California. 229 00:13:00,880 --> 00:13:03,160 Speaker 1: And I've lived in Oakland, California. I've been in southern 230 00:13:03,160 --> 00:13:06,160 Speaker 1: California and see them that works. It's hard to pick. 231 00:13:06,280 --> 00:13:11,120 Speaker 1: Oakland's pretty awesome. You're listening to Bloomberg Markets with Pierrol 232 00:13:11,200 --> 00:13:15,600 Speaker 1: Masser and Corey Johnson on Bloomberg Radio. Someone I love 233 00:13:15,640 --> 00:13:19,559 Speaker 1: even more than your average S one filing is Alex Brenkos. 234 00:13:19,600 --> 00:13:21,040 Speaker 1: She joined us right now. She's the ip A report 235 00:13:21,040 --> 00:13:23,640 Speaker 1: of the breaking news at Spotify, which has followed and 236 00:13:23,840 --> 00:13:26,920 Speaker 1: filed an F one because it's a foreign company. UH 237 00:13:27,040 --> 00:13:29,520 Speaker 1: is planning a listing? Uh? What do we see in this? 238 00:13:29,559 --> 00:13:31,199 Speaker 1: Alex and I have I know you were just on 239 00:13:31,240 --> 00:13:33,319 Speaker 1: TV talking about it. I'm I've got the benefit of 240 00:13:33,320 --> 00:13:35,920 Speaker 1: looking at it in front of me. I am seeing 241 00:13:36,240 --> 00:13:39,280 Speaker 1: some nice, juicy financial numbers. That we're finally getting our 242 00:13:39,360 --> 00:13:42,840 Speaker 1: hands on m Namely, I'm looking at the revenue numbers. 243 00:13:42,840 --> 00:13:46,600 Speaker 1: They posted about four billion euros or about four point 244 00:13:46,679 --> 00:13:49,480 Speaker 1: nine billion U S dollars in revenue last year. That 245 00:13:49,600 --> 00:13:52,800 Speaker 1: was up thirty nine percent from a year earlier, and 246 00:13:53,160 --> 00:13:55,960 Speaker 1: they're cutting this compound annual growth rate of forty five 247 00:13:56,120 --> 00:13:59,240 Speaker 1: percent as well, So that definitely caught my eye. Would 248 00:13:59,240 --> 00:14:01,880 Speaker 1: also caught my I was the one point to euro 249 00:14:02,040 --> 00:14:07,920 Speaker 1: billion euros in losses they also posted in UM. Spotify 250 00:14:07,960 --> 00:14:11,800 Speaker 1: is also kind of touting here the stickiness of its users. Also. 251 00:14:11,880 --> 00:14:15,880 Speaker 1: It's seventy one million subscription users, they said in the 252 00:14:15,960 --> 00:14:20,160 Speaker 1: fourth quarter monthly active users listened to about twenty five 253 00:14:20,200 --> 00:14:24,560 Speaker 1: hours of music a month, which they're claiming helps them 254 00:14:24,800 --> 00:14:27,480 Speaker 1: kind of keep this reigning top spot in the music 255 00:14:27,520 --> 00:14:30,880 Speaker 1: streaming industry. So in terms of numbers, Corey, those are 256 00:14:30,880 --> 00:14:32,720 Speaker 1: the kind of big things that I'm paying attention to 257 00:14:33,200 --> 00:14:36,520 Speaker 1: as we get this first look in this registration statement 258 00:14:36,600 --> 00:14:40,160 Speaker 1: for Spotify is direct listing and just a little bit 259 00:14:40,160 --> 00:14:43,320 Speaker 1: more Alex pim Fox here. You know, looking at the 260 00:14:43,360 --> 00:14:47,840 Speaker 1: company's growth, is that what you believe investors are going 261 00:14:47,880 --> 00:14:52,320 Speaker 1: to be focused on, because seventy one million subscribers of 262 00:14:52,440 --> 00:14:56,320 Speaker 1: premium subscribers as of December thirty one, at the end 263 00:14:56,360 --> 00:14:59,000 Speaker 1: of the year, I mean seventy one million. Is that 264 00:14:59,240 --> 00:15:04,240 Speaker 1: really considered love for this industry? It is um that 265 00:15:04,400 --> 00:15:06,720 Speaker 1: and that's also kind of what they're touting in terms 266 00:15:06,720 --> 00:15:10,000 Speaker 1: of the opportunity here. They're saying, uh, this industry is 267 00:15:10,040 --> 00:15:13,480 Speaker 1: set to grow very quickly. Goldman Socks has puts pegs 268 00:15:13,480 --> 00:15:17,760 Speaker 1: this at about thirty billion dollars in revenue by so 269 00:15:18,240 --> 00:15:21,360 Speaker 1: this is a growing space. And the other kind of 270 00:15:21,400 --> 00:15:23,640 Speaker 1: competitors who have moved in, whether it be Apple Music 271 00:15:23,880 --> 00:15:27,280 Speaker 1: or Pandora which has been struggling, have kind of floundered 272 00:15:27,440 --> 00:15:30,800 Speaker 1: um which Spotify is used as kind of a double 273 00:15:30,880 --> 00:15:34,400 Speaker 1: down for how well they've been doing. So, yes, it's 274 00:15:34,400 --> 00:15:36,400 Speaker 1: a growing space, it's still a small one. They're still 275 00:15:36,440 --> 00:15:38,840 Speaker 1: fighting with the likes of the free content that you 276 00:15:38,880 --> 00:15:41,360 Speaker 1: can get on YouTube and things like that. Um. But 277 00:15:41,840 --> 00:15:43,480 Speaker 1: you know, if I if I look at the narrative 278 00:15:43,480 --> 00:15:45,320 Speaker 1: they're trying to lay out here, they are kind of 279 00:15:45,320 --> 00:15:48,320 Speaker 1: pushing on the fact that they know their users really well, 280 00:15:48,360 --> 00:15:50,720 Speaker 1: that they have data on their users and create these 281 00:15:50,760 --> 00:15:54,880 Speaker 1: created playlists, which I don't think it is wholly surprising. Um, 282 00:15:54,920 --> 00:15:58,280 Speaker 1: but it does kind of reinforce this differentiation that Spotifies 283 00:15:58,320 --> 00:16:01,880 Speaker 1: pushing well. And and let's uh, you know, take note 284 00:16:01,880 --> 00:16:03,160 Speaker 1: of what they say in the filing. So the filing 285 00:16:03,200 --> 00:16:05,800 Speaker 1: they say the monthly active users grew year over a 286 00:16:05,880 --> 00:16:08,400 Speaker 1: year from in December at the end of the two 287 00:16:08,720 --> 00:16:12,840 Speaker 1: sev growth. But they also say that the industry is streaming. 288 00:16:12,880 --> 00:16:16,440 Speaker 1: Revenues in the industry are growing by sixty So that 289 00:16:16,600 --> 00:16:19,760 Speaker 1: suggests either that the companies are getting more money from 290 00:16:19,760 --> 00:16:22,680 Speaker 1: existing users than or they're able to pull more money 291 00:16:22,680 --> 00:16:25,400 Speaker 1: out of the average users, or the Spotify is losing 292 00:16:25,400 --> 00:16:28,520 Speaker 1: market share. If the business is grown by six overall 293 00:16:28,800 --> 00:16:32,120 Speaker 1: and they're only seeing monthly active user growth, I know, 294 00:16:32,200 --> 00:16:35,720 Speaker 1: I think he's revenue growth. That's that might suggest that 295 00:16:35,720 --> 00:16:39,160 Speaker 1: they've got issues. It might end. The tricky thing here 296 00:16:39,200 --> 00:16:41,920 Speaker 1: for investors is there's no road show for Spotify for 297 00:16:41,960 --> 00:16:44,640 Speaker 1: them to ask this question. Um. That that would be 298 00:16:44,680 --> 00:16:46,560 Speaker 1: something in a traditional I p O where there's a 299 00:16:46,760 --> 00:16:49,480 Speaker 1: there is a road show and kind of that marketing period. Um, 300 00:16:49,560 --> 00:16:52,120 Speaker 1: there's the back and forth between investors in the company 301 00:16:52,440 --> 00:16:55,080 Speaker 1: as they address their concerns and and kind of uh 302 00:16:55,480 --> 00:16:58,840 Speaker 1: make their input on valuation. Uh. So investors are just 303 00:16:58,840 --> 00:17:00,640 Speaker 1: going to have to kind of square up on these 304 00:17:00,680 --> 00:17:03,520 Speaker 1: issues that you're bringing up, Corey, because as this filing says, 305 00:17:03,600 --> 00:17:05,760 Speaker 1: they're just going to show up on day one, uh, 306 00:17:05,800 --> 00:17:08,280 Speaker 1: and the opening price will be determined by the buying 307 00:17:08,280 --> 00:17:11,119 Speaker 1: and sell orders collected on listing day. So you know 308 00:17:11,240 --> 00:17:13,840 Speaker 1: whether it be why aren't you growing as fast as 309 00:17:13,880 --> 00:17:17,920 Speaker 1: the industry is growing? Or is this a business that 310 00:17:18,040 --> 00:17:21,480 Speaker 1: can square with kind of the demands from the content creators, 311 00:17:21,480 --> 00:17:24,800 Speaker 1: from the music industry creators. Uh? Those are questions that 312 00:17:24,880 --> 00:17:27,439 Speaker 1: investors are going to have to probably wait until the 313 00:17:27,520 --> 00:17:30,480 Speaker 1: first couple earnings to actually be able to sling over 314 00:17:30,600 --> 00:17:33,680 Speaker 1: to spot only only on Bloomberg Radio. Do we subscribe 315 00:17:33,720 --> 00:17:36,320 Speaker 1: a rapper and a rock star as a content creator, 316 00:17:36,640 --> 00:17:38,879 Speaker 1: Alex Frenko, you give us great content. Thank you so 317 00:17:38,960 --> 00:17:40,400 Speaker 1: much for that. I know you're working on this breaking story. 318 00:17:40,480 --> 00:17:42,239 Speaker 1: I really appreciate your time, you know, Cored. Just one 319 00:17:42,280 --> 00:17:44,560 Speaker 1: other thing I just want to ask you about as well, 320 00:17:44,600 --> 00:17:47,080 Speaker 1: because I'm looking at the at the filing and it 321 00:17:47,119 --> 00:17:52,520 Speaker 1: says they have something it's called estimated future minimum guarantee commitments. 322 00:17:52,640 --> 00:17:55,040 Speaker 1: Oh that ain't good, right, And what this means is 323 00:17:55,080 --> 00:17:57,920 Speaker 1: that they have to pay for obviously the license fees 324 00:17:58,000 --> 00:18:01,840 Speaker 1: for the music. Whether they have seventy one million subscribers 325 00:18:01,920 --> 00:18:05,760 Speaker 1: or seven subscribers in those commitments total one point seven 326 00:18:05,800 --> 00:18:08,720 Speaker 1: billion euros, so you can do the math. That's over 327 00:18:08,840 --> 00:18:11,960 Speaker 1: two billion. H sounds like not quite as bad as that. 328 00:18:12,080 --> 00:18:24,960 Speaker 1: Well that was the Yeah, Spencer sober joins us right now. 329 00:18:25,000 --> 00:18:28,560 Speaker 1: He's in Seattle and should listen to Kurt Cobain and 330 00:18:28,560 --> 00:18:31,680 Speaker 1: I don't know but the Door Jimmy for that matter. 331 00:18:31,760 --> 00:18:34,159 Speaker 1: But instead of watching rock and roll for his he 332 00:18:34,240 --> 00:18:36,800 Speaker 1: keeps track of what's going on in Amazon for Bloomberg News, 333 00:18:37,200 --> 00:18:40,280 Speaker 1: and Spencer talk to me about Amazon and Apple and 334 00:18:40,320 --> 00:18:42,280 Speaker 1: what they're doing to do deal with this issue. We 335 00:18:42,359 --> 00:18:46,200 Speaker 1: just heard President Trump talking about gun control. Well they're 336 00:18:46,320 --> 00:18:48,959 Speaker 1: they're not doing anything, and that's what has people hopping 337 00:18:49,000 --> 00:18:52,960 Speaker 1: mad um. A lot of gun control activists that have 338 00:18:53,000 --> 00:18:57,359 Speaker 1: grown frustrated with the lack of any kind of response, 339 00:18:57,480 --> 00:19:01,040 Speaker 1: legislative response to all of these school shooting are targeting 340 00:19:01,080 --> 00:19:03,840 Speaker 1: businesses and they've had some success with uh, you know, 341 00:19:03,880 --> 00:19:07,040 Speaker 1: many businesses including airlines and hotels and car rental companies 342 00:19:07,080 --> 00:19:11,080 Speaker 1: actually ending their relationships with the National Rifle Association. This 343 00:19:11,080 --> 00:19:15,240 Speaker 1: this powerful political gun lobby. Um, so now they're they're 344 00:19:15,280 --> 00:19:17,040 Speaker 1: kind of emboldened by a lot of this action. They've 345 00:19:17,040 --> 00:19:19,000 Speaker 1: been able to get on the business front, and now 346 00:19:19,000 --> 00:19:23,160 Speaker 1: they're going after Amazon and Apple and even Roku over 347 00:19:23,760 --> 00:19:27,000 Speaker 1: uh n r A t V, which is actually the 348 00:19:27,040 --> 00:19:30,480 Speaker 1: n r AS online pre online channel. They have like 349 00:19:30,560 --> 00:19:35,040 Speaker 1: political commentary programming, little white size snippets basically of pro 350 00:19:35,119 --> 00:19:38,840 Speaker 1: gun political commentary and uh, some shoppers are saying, listen, 351 00:19:38,880 --> 00:19:42,879 Speaker 1: we want you to disassociate your brand with the n 352 00:19:43,000 --> 00:19:45,679 Speaker 1: r A and if you don't, we'll stop shopping with you. 353 00:19:46,400 --> 00:19:50,960 Speaker 1: What has been the reaction of the companies anything in detail? No, nothing, 354 00:19:51,000 --> 00:19:53,480 Speaker 1: head in the sand. That's that's the traditional Like when 355 00:19:53,520 --> 00:19:56,280 Speaker 1: when there's a social media backlast today, it's like, you know, 356 00:19:56,359 --> 00:19:59,399 Speaker 1: everyone has access to a to a you know, Twitter 357 00:19:59,440 --> 00:20:02,160 Speaker 1: account or Facebook, uh, that sort of thing. This stuff 358 00:20:02,200 --> 00:20:05,080 Speaker 1: can really blow up quickly. It's always a question of 359 00:20:05,200 --> 00:20:06,400 Speaker 1: is it going to be a flash in the pan 360 00:20:06,560 --> 00:20:08,879 Speaker 1: or not. And the traditional reaction has been to be 361 00:20:08,960 --> 00:20:11,239 Speaker 1: kind of keep quiet and waited out. But on this 362 00:20:11,240 --> 00:20:13,199 Speaker 1: gun control issue, we're seeing a lot of companies are 363 00:20:13,200 --> 00:20:15,879 Speaker 1: not doing that and are stepping out. But but but 364 00:20:16,040 --> 00:20:18,879 Speaker 1: Amazon and Apple have been been quiet on this, And 365 00:20:18,920 --> 00:20:21,119 Speaker 1: that's that's the question. It's kind of like a like 366 00:20:21,160 --> 00:20:24,160 Speaker 1: a like a stair down here, are with the momentum 367 00:20:24,320 --> 00:20:27,639 Speaker 1: from shoppers, continue pressuring these folks or can they be 368 00:20:27,920 --> 00:20:30,760 Speaker 1: Can they just be quiet and waited out? That's kind 369 00:20:30,760 --> 00:20:33,680 Speaker 1: of what we're waiting to see here. Uh So, So 370 00:20:34,119 --> 00:20:36,359 Speaker 1: the notion that maybe this is different this time, that 371 00:20:36,480 --> 00:20:39,480 Speaker 1: with with children sort of leading the way, uh, that 372 00:20:39,480 --> 00:20:42,760 Speaker 1: that that the traditional response of this is going to 373 00:20:42,800 --> 00:20:44,520 Speaker 1: blow over and we'll keep doing the same things we've 374 00:20:44,520 --> 00:20:47,199 Speaker 1: been doing, which is what we've seen in prior shootings 375 00:20:47,240 --> 00:20:50,600 Speaker 1: in schools. That maybe that the Amazon and Apple sort 376 00:20:50,640 --> 00:20:54,040 Speaker 1: of betting on that. Yeah, that's that's that's the question, 377 00:20:54,160 --> 00:20:59,920 Speaker 1: right is uh, will this latest um effort have momentum 378 00:21:00,119 --> 00:21:03,160 Speaker 1: traction that continues and sustains. And if it does, it's 379 00:21:03,160 --> 00:21:05,800 Speaker 1: going to be it's going to be difficult for for 380 00:21:06,240 --> 00:21:09,359 Speaker 1: companies to to remain on the sidelines. And and that's 381 00:21:09,400 --> 00:21:14,159 Speaker 1: the that's the key question here is you know, consumer advocacy. 382 00:21:14,240 --> 00:21:16,960 Speaker 1: It's like customers are demanding, you know, taking more of 383 00:21:16,960 --> 00:21:19,080 Speaker 1: a year with us or against us approach, and if 384 00:21:19,080 --> 00:21:22,240 Speaker 1: they're in action as seen as action in the in 385 00:21:22,240 --> 00:21:24,840 Speaker 1: the mind of many consumers. And so that's we're waiting 386 00:21:24,840 --> 00:21:28,560 Speaker 1: to see if this uh, if this issue fades out, 387 00:21:28,640 --> 00:21:31,000 Speaker 1: or if if these consumer advocates are able to smoke 388 00:21:31,040 --> 00:21:35,800 Speaker 1: out Apple and Amazon. And Amazon particular historically has has 389 00:21:35,880 --> 00:21:38,159 Speaker 1: kept out of this kind of stuff, um, you know, 390 00:21:38,160 --> 00:21:40,479 Speaker 1: and it's it's survived many boycotts. You know, it's had 391 00:21:40,520 --> 00:21:44,199 Speaker 1: boycotts related to uh uh you know, it's treatment of 392 00:21:44,200 --> 00:21:47,840 Speaker 1: of warehouse workers. It's face boycotts related to uh, you know, 393 00:21:47,880 --> 00:21:51,159 Speaker 1: it's it's lack of collection of sales taxes. Um. It 394 00:21:51,240 --> 00:21:54,720 Speaker 1: even faced the boycott over it's uh it very briefly 395 00:21:54,760 --> 00:21:57,840 Speaker 1: defended sale of an e book titled something like The 396 00:21:58,920 --> 00:22:02,080 Speaker 1: Pedophiles Guide to Relationships or something. It was just very 397 00:22:02,560 --> 00:22:06,879 Speaker 1: crazy book written about pedophilia that Amazon briefly defended before 398 00:22:07,160 --> 00:22:09,400 Speaker 1: capitulating and saying, yeah, you know what, maybe we shouldn't 399 00:22:09,440 --> 00:22:12,000 Speaker 1: be be selling this book. But historically they've been open 400 00:22:12,040 --> 00:22:15,959 Speaker 1: to kind of the free pre flowing ideas well. Spencer, 401 00:22:16,000 --> 00:22:17,960 Speaker 1: I mean, is there no irony that's lost on the 402 00:22:18,000 --> 00:22:20,560 Speaker 1: fact that most of these companies make their money by 403 00:22:20,600 --> 00:22:25,080 Speaker 1: having people use the internet or go online, and as 404 00:22:25,080 --> 00:22:29,679 Speaker 1: a result, whether it's Apple, Roku or Amazon, uh, that 405 00:22:29,800 --> 00:22:34,639 Speaker 1: they use the very services that these tech giants are 406 00:22:34,680 --> 00:22:38,720 Speaker 1: now stepping away from basically saying we're neutral about this. 407 00:22:38,880 --> 00:22:40,880 Speaker 1: They're not neutral when it comes to things like net 408 00:22:40,920 --> 00:22:44,600 Speaker 1: neutrality from the FCC. Yeah, I mean there there is 409 00:22:44,640 --> 00:22:47,480 Speaker 1: an irony, and it's even just tough to understand the 410 00:22:47,920 --> 00:22:50,800 Speaker 1: significance of it, because you could very easily go to 411 00:22:51,000 --> 00:22:53,399 Speaker 1: n r A dot org and watch an r A 412 00:22:53,480 --> 00:22:56,160 Speaker 1: t V to your heart's content without Apple, without Amazon, 413 00:22:56,280 --> 00:23:00,359 Speaker 1: without Roku. Uh, you know this content is except sible 414 00:23:00,359 --> 00:23:03,359 Speaker 1: to you. It's it's more a question of are these 415 00:23:03,359 --> 00:23:07,679 Speaker 1: brands somehow making it easier or or broadening the group's 416 00:23:07,760 --> 00:23:11,760 Speaker 1: visibility by offering the channel on its on its streaming devices. Well, Spencer, 417 00:23:11,760 --> 00:23:13,359 Speaker 1: I wasn't even thinking that, you know, you have to 418 00:23:13,400 --> 00:23:15,200 Speaker 1: come down one way or the other on this. In 419 00:23:15,280 --> 00:23:18,679 Speaker 1: other words, not to prejudge anyone's opinion on it, but 420 00:23:18,840 --> 00:23:23,480 Speaker 1: that as corporate entities that they can't just remain silent, 421 00:23:23,560 --> 00:23:26,359 Speaker 1: that they need to at least have some kind of 422 00:23:26,400 --> 00:23:29,600 Speaker 1: public stance. Yeah, if you're if you're a company like 423 00:23:29,640 --> 00:23:32,560 Speaker 1: Amazon or Apple that has a you know, general consumer 424 00:23:32,600 --> 00:23:34,879 Speaker 1: products and wants to appeal to the masses, you you 425 00:23:34,920 --> 00:23:37,719 Speaker 1: don't want to have to slice and dice the population. 426 00:23:38,040 --> 00:23:40,840 Speaker 1: And let's face it, businesses are in a different um 427 00:23:40,880 --> 00:23:44,359 Speaker 1: situation than than politicians and elections. Elections are winner take all. 428 00:23:44,760 --> 00:23:46,679 Speaker 1: You know, if you win by one vote or millions 429 00:23:46,680 --> 00:23:50,040 Speaker 1: of votes, um, you know you you won that election. Uh, 430 00:23:50,080 --> 00:23:52,600 Speaker 1: and you get all of the fruit of winning that election. 431 00:23:52,640 --> 00:23:55,679 Speaker 1: Whereas the marketplaces is different. You know you if you 432 00:23:55,720 --> 00:23:58,399 Speaker 1: alienate five percent of your customers, that's a that's a 433 00:23:58,400 --> 00:24:01,560 Speaker 1: big deal to to your to your bottom. Uh. It's 434 00:24:01,560 --> 00:24:03,760 Speaker 1: it's interesting too that you know, here you have a company, 435 00:24:03,760 --> 00:24:07,520 Speaker 1: particularly in the case of of of Apple, where they 436 00:24:07,520 --> 00:24:10,120 Speaker 1: have come out in a number of social issues, and 437 00:24:10,200 --> 00:24:12,439 Speaker 1: I think the people think of that company in a 438 00:24:12,480 --> 00:24:16,879 Speaker 1: certain way and executive restive jobs that well, the company 439 00:24:16,880 --> 00:24:19,239 Speaker 1: didn't take political stance necessarily. It seemed to stand for 440 00:24:19,280 --> 00:24:22,120 Speaker 1: something or would use the iconography of people who stand 441 00:24:22,200 --> 00:24:24,679 Speaker 1: for something. And I wonder if once they've done it 442 00:24:24,720 --> 00:24:27,840 Speaker 1: on a couple of issues like same sex marriage, that 443 00:24:27,840 --> 00:24:30,800 Speaker 1: that it becomes incumbent upon them, or at least they 444 00:24:30,840 --> 00:24:34,840 Speaker 1: are being called to hold to a standard that is 445 00:24:34,880 --> 00:24:37,440 Speaker 1: like the standard they've said in other issues and the 446 00:24:39,040 --> 00:24:41,600 Speaker 1: battling what don't trying to say is that once they've 447 00:24:41,600 --> 00:24:44,840 Speaker 1: done it once to being called on to do it again. Yeah, 448 00:24:44,840 --> 00:24:47,639 Speaker 1: there's always the fear of the fear of precedent, and 449 00:24:47,720 --> 00:24:50,399 Speaker 1: especially with streaming services, and even think about Amazon as 450 00:24:50,440 --> 00:24:53,280 Speaker 1: its roots as a as a bookseller. You know, it's 451 00:24:53,320 --> 00:24:58,679 Speaker 1: it's very, very dangerous to be muscled around based on 452 00:24:58,800 --> 00:25:02,760 Speaker 1: viewpoints and so the Even though Apple and Amazon have 453 00:25:02,840 --> 00:25:04,560 Speaker 1: been quiet on this, Roku did come out with a 454 00:25:04,600 --> 00:25:08,280 Speaker 1: statement basically saying like, look, we have policies for our 455 00:25:08,359 --> 00:25:11,040 Speaker 1: content and our a TV does not violate any of 456 00:25:11,080 --> 00:25:15,080 Speaker 1: our policies, you know, basically around uh anything illegal or 457 00:25:15,240 --> 00:25:19,640 Speaker 1: or you know, uh incenting violence or that sort of thing. 458 00:25:19,640 --> 00:25:21,840 Speaker 1: But they say it's not a violation of our policies 459 00:25:21,840 --> 00:25:24,760 Speaker 1: and we don't censor based on based on viewpoint. All right, 460 00:25:24,800 --> 00:25:27,440 Speaker 1: well done, thanks very much for helping us understand what's 461 00:25:27,440 --> 00:25:37,600 Speaker 1: going on. Spencer Soaper, Bloomberg News technology reporter, the journel. Yeah, 462 00:25:37,680 --> 00:25:42,680 Speaker 1: but you let me drive. Oh no, no, no, no no, honey, please, 463 00:25:42,800 --> 00:25:46,480 Speaker 1: I'll do the right revel I want to try ball. 464 00:25:48,920 --> 00:26:02,320 Speaker 1: Just drive. Baby's good question, trying the drive to the 465 00:26:02,359 --> 00:26:09,879 Speaker 1: clothes that give a thing. We'll dry us on Bloomberg Radio. Yes, indeed, 466 00:26:09,920 --> 00:26:11,720 Speaker 1: drive the clothes right now, and time for us to 467 00:26:11,720 --> 00:26:13,480 Speaker 1: take a look at the markets. Just about to nine 468 00:26:13,520 --> 00:26:15,760 Speaker 1: minutes left in the trading day. J J. Kenahan joined 469 00:26:15,800 --> 00:26:17,760 Speaker 1: us right now, the chief market strategies that TV and 470 00:26:17,840 --> 00:26:20,280 Speaker 1: merrit trade and j J. This market is a lot 471 00:26:20,359 --> 00:26:22,400 Speaker 1: more interesting. Uh. Here we are on the last day 472 00:26:22,400 --> 00:26:24,959 Speaker 1: of February. February is a lot more exciting maybe than 473 00:26:25,000 --> 00:26:28,200 Speaker 1: it needed to be. Yes, it certainly has been. We've 474 00:26:28,200 --> 00:26:31,080 Speaker 1: seen quite a few selloffs here, uh, and we've actually 475 00:26:31,119 --> 00:26:33,399 Speaker 1: seen a little bit of a tone change overall. If 476 00:26:33,440 --> 00:26:36,800 Speaker 1: you think about three months ago, raising rates was going 477 00:26:36,880 --> 00:26:38,640 Speaker 1: to be a good thing because it was a vote 478 00:26:38,640 --> 00:26:41,320 Speaker 1: of confidence in the economy and everybody was all for it. 479 00:26:41,800 --> 00:26:44,040 Speaker 1: Now that we're actually getting to the point where it 480 00:26:44,080 --> 00:26:45,919 Speaker 1: looks like we're going to have some rate rages all 481 00:26:45,960 --> 00:26:47,760 Speaker 1: of a sudden, it's the scariest thing in the world. 482 00:26:48,280 --> 00:26:53,520 Speaker 1: So just the general outlook from most market participants for 483 00:26:53,560 --> 00:26:57,920 Speaker 1: some reason, has turned pretty significantly on this topic. J J. 484 00:26:58,160 --> 00:27:00,320 Speaker 1: Maybe maybe you could just comment on what you're in 485 00:27:00,320 --> 00:27:03,040 Speaker 1: the market trade today, because I was looking at for example, 486 00:27:03,080 --> 00:27:05,760 Speaker 1: all right, you've got stock specific stories like cell Gene 487 00:27:05,760 --> 00:27:08,840 Speaker 1: down nearly nine, but then you know you're seeing just 488 00:27:08,920 --> 00:27:11,439 Speaker 1: a general sell off, and I'm wondering this is because 489 00:27:11,440 --> 00:27:15,240 Speaker 1: what professionals they sell the rally that we had. Yeah, 490 00:27:15,760 --> 00:27:18,919 Speaker 1: it's it's interesting. I think part of this maybe because 491 00:27:18,960 --> 00:27:21,720 Speaker 1: it's happened all. I won't say all, but primarily in 492 00:27:21,760 --> 00:27:24,200 Speaker 1: the last hour and a half where we were really 493 00:27:24,240 --> 00:27:27,920 Speaker 1: seeing the UH selling it somewhat aggressive. I'm wondering if 494 00:27:27,920 --> 00:27:31,240 Speaker 1: it's a little bit of anticipatory based on Chairman Powell 495 00:27:31,240 --> 00:27:34,280 Speaker 1: going up to the hill yesterday. Uh, you know, and 496 00:27:34,280 --> 00:27:36,840 Speaker 1: in the sell off, there is an anticipatory if we 497 00:27:36,960 --> 00:27:39,159 Speaker 1: get a follow up that there's another sell off. So 498 00:27:39,280 --> 00:27:42,040 Speaker 1: people just saying I don't necessarily want to take any 499 00:27:42,160 --> 00:27:44,040 Speaker 1: risk going into that, but that he's going to say 500 00:27:44,040 --> 00:27:47,760 Speaker 1: something different tomorrow that he said before the house, Yes, 501 00:27:47,840 --> 00:27:50,800 Speaker 1: only because he you know, having listen the first time, 502 00:27:50,840 --> 00:27:52,960 Speaker 1: and not that that's the first time he's ever testified 503 00:27:53,000 --> 00:27:55,000 Speaker 1: up there was the first time he's been the man 504 00:27:55,080 --> 00:27:58,560 Speaker 1: if you will up there, and you know, I don't 505 00:27:58,600 --> 00:28:01,159 Speaker 1: think you ever in his position, want the market to 506 00:28:01,200 --> 00:28:03,960 Speaker 1: have such a negative reaction to what you have to say, 507 00:28:04,080 --> 00:28:06,560 Speaker 1: although I would argue that everything he said was actually 508 00:28:06,640 --> 00:28:10,720 Speaker 1: pretty positive for the economy, so um so you will 509 00:28:10,760 --> 00:28:12,800 Speaker 1: be paying careful attention to this. What would you change 510 00:28:12,800 --> 00:28:15,560 Speaker 1: any investment space on on what he has to say. No, 511 00:28:15,720 --> 00:28:18,919 Speaker 1: I I think that this is more more this is 512 00:28:18,960 --> 00:28:22,000 Speaker 1: more about people where we've had a nice rally over 513 00:28:22,040 --> 00:28:23,880 Speaker 1: the last few weeks. I really see it as more 514 00:28:24,000 --> 00:28:28,679 Speaker 1: of a taking profits and perhaps buying a little bit 515 00:28:28,720 --> 00:28:31,119 Speaker 1: of insurance through the options market. If I look at 516 00:28:31,119 --> 00:28:35,119 Speaker 1: the VIX, uh, just in case something goes awry. The 517 00:28:35,160 --> 00:28:37,040 Speaker 1: other thing that I will say, look at x IV. 518 00:28:37,240 --> 00:28:40,280 Speaker 1: Don't do that, don't look at x IV. That was 519 00:28:40,280 --> 00:28:43,480 Speaker 1: an ing, No, don't do not look at XCIV unless 520 00:28:43,520 --> 00:28:47,520 Speaker 1: you really really know what you're doing. Um. That being said, 521 00:28:47,600 --> 00:28:49,840 Speaker 1: this is this has turned very aggressive here in the 522 00:28:49,920 --> 00:28:52,400 Speaker 1: last little bit, so we'll have to see it. Actually, 523 00:28:52,400 --> 00:28:54,240 Speaker 1: what I want to watch on the clothes and you know, 524 00:28:54,280 --> 00:28:56,120 Speaker 1: we only have eight minutes left, which may be a 525 00:28:56,160 --> 00:28:58,360 Speaker 1: good thing for the market, is that we hold this 526 00:28:59,640 --> 00:29:02,040 Speaker 1: on the the close on the SPX it's you know, 527 00:29:02,160 --> 00:29:04,360 Speaker 1: nineteen points from here, so that would take a lot 528 00:29:04,400 --> 00:29:07,560 Speaker 1: to happen. But this has been turned into a pretty 529 00:29:07,840 --> 00:29:10,080 Speaker 1: going from you know, as we started this talking about 530 00:29:10,080 --> 00:29:13,800 Speaker 1: a few single stock story two pretty aggressive selling across 531 00:29:13,880 --> 00:29:16,480 Speaker 1: the board. Uh be it in and and in all 532 00:29:16,520 --> 00:29:19,720 Speaker 1: major industries, be at the Russell, the SMPS or the 533 00:29:19,760 --> 00:29:23,360 Speaker 1: Nastic j J. Looking at some retail names like Coals, 534 00:29:23,400 --> 00:29:26,000 Speaker 1: they're going to be reporting tomorrow before the market opens. 535 00:29:26,040 --> 00:29:29,960 Speaker 1: The stock currently higher right now, it's up a buck. Also, 536 00:29:29,960 --> 00:29:33,840 Speaker 1: we're gonna get north STRM results. Tell us about retail, well, 537 00:29:34,040 --> 00:29:36,480 Speaker 1: I think what we want to look for in retail is, 538 00:29:36,600 --> 00:29:39,120 Speaker 1: you know, we saw Walmart be a bit disappointing. Some 539 00:29:39,200 --> 00:29:41,440 Speaker 1: of that though was self inflicted in terms of what 540 00:29:41,480 --> 00:29:45,400 Speaker 1: they were doing, uh, in terms of their online sales 541 00:29:45,400 --> 00:29:48,200 Speaker 1: and how they were reorganizing that. You know. The thing 542 00:29:48,240 --> 00:29:50,680 Speaker 1: about Coals is, if you look at it, we're expecting 543 00:29:50,720 --> 00:29:52,680 Speaker 1: about a seven and a half percent move looking what 544 00:29:52,760 --> 00:29:55,320 Speaker 1: the options markets pricing in so we could go either way. 545 00:29:55,600 --> 00:29:58,560 Speaker 1: The thing I think Coles has going for it and 546 00:29:58,560 --> 00:30:00,239 Speaker 1: and I think Target does want to come is out 547 00:30:00,280 --> 00:30:02,040 Speaker 1: in a week and a half, is that in the 548 00:30:02,120 --> 00:30:05,120 Speaker 1: better economies, people tend to move up a little bit, 549 00:30:05,160 --> 00:30:07,280 Speaker 1: if you will. So people may move up from Walmart 550 00:30:07,360 --> 00:30:10,520 Speaker 1: two Coals or Walmart to Target, so they move up 551 00:30:10,560 --> 00:30:13,120 Speaker 1: a little bit in quality. Uh. The one area where 552 00:30:13,120 --> 00:30:15,160 Speaker 1: they tend to be a little more sticky as groceries, 553 00:30:15,360 --> 00:30:17,920 Speaker 1: but in terms of clothing, etcetera. I think those those 554 00:30:17,960 --> 00:30:22,560 Speaker 1: companies have a really nice opportunity when when those numbers 555 00:30:22,640 --> 00:30:25,040 Speaker 1: come out tomorrow and the other one that's coming out 556 00:30:25,640 --> 00:30:28,040 Speaker 1: that I think surprised a lot of us last quarters 557 00:30:28,120 --> 00:30:31,160 Speaker 1: the gap, So we'll see how their holiday season was also, 558 00:30:31,240 --> 00:30:33,280 Speaker 1: so retail has a chance to have some big movers 559 00:30:33,280 --> 00:30:35,120 Speaker 1: here over the next couple of days. Yeah. Well, just 560 00:30:35,160 --> 00:30:38,000 Speaker 1: looking at the SMP, you say, right now it turns 561 00:30:38,040 --> 00:30:42,479 Speaker 1: south just around three o'clock Eastern time, we're down about 562 00:30:42,560 --> 00:30:44,800 Speaker 1: the nine tenths of a percent coals, they'll go in 563 00:30:44,880 --> 00:30:48,560 Speaker 1: the other direction and adding to its gains up a 564 00:30:48,640 --> 00:30:51,520 Speaker 1: little bit more than two percent. Right now, what other areas? 565 00:30:51,800 --> 00:30:53,960 Speaker 1: How about the energy market? Do you think that there 566 00:30:54,040 --> 00:30:58,800 Speaker 1: is that we've been talking earlier today energy stocks interested? Yeah, 567 00:30:58,880 --> 00:31:01,160 Speaker 1: I am. And and you know, although crewdes having a 568 00:31:01,240 --> 00:31:04,560 Speaker 1: tough day today, we also saw that, you know, Chevron 569 00:31:04,640 --> 00:31:07,640 Speaker 1: got a nice upgrade today. And you know with Chevron 570 00:31:07,680 --> 00:31:09,320 Speaker 1: and next time when I look there, I see two 571 00:31:09,360 --> 00:31:12,920 Speaker 1: companies that still continue to pay nice dividends, although if 572 00:31:13,000 --> 00:31:15,360 Speaker 1: rates go higher that may fade a little bit. But 573 00:31:15,480 --> 00:31:17,360 Speaker 1: the thing is, as we become more of an ex 574 00:31:17,520 --> 00:31:19,680 Speaker 1: exporter of gas. That the question you have to ask 575 00:31:19,680 --> 00:31:22,640 Speaker 1: yourself with those two companies particularly is do I want 576 00:31:22,760 --> 00:31:25,720 Speaker 1: more exposure to pure crude, which would be Chevron, or 577 00:31:25,720 --> 00:31:28,600 Speaker 1: do I want it to natural gas chemicals and crude, 578 00:31:28,640 --> 00:31:31,400 Speaker 1: which would be exon Mobile. So I still think that's 579 00:31:31,400 --> 00:31:34,280 Speaker 1: a really interesting area. And the one thing to keep 580 00:31:34,320 --> 00:31:36,600 Speaker 1: in mind about those bigger crude oil companies is when 581 00:31:36,600 --> 00:31:40,960 Speaker 1: the markets sold sold off, they did not go down 582 00:31:41,120 --> 00:31:43,440 Speaker 1: nearly as much as some of the other, you know, 583 00:31:43,680 --> 00:31:47,160 Speaker 1: big names in the market, So there is some resiliency 584 00:31:47,280 --> 00:31:50,560 Speaker 1: to those in downside markets. And the big thing to 585 00:31:50,600 --> 00:31:53,280 Speaker 1: me that there is does crude hold sixty dollars currently 586 00:31:53,320 --> 00:31:55,680 Speaker 1: trading about sixty one and a half, And then I 587 00:31:55,680 --> 00:31:57,640 Speaker 1: think as long as we settle in with crude oil 588 00:31:57,680 --> 00:32:00,240 Speaker 1: staying above sixty dollars and finding a trading range there, 589 00:32:00,560 --> 00:32:03,760 Speaker 1: those stocks are are very interesting. Well, looking at crude, 590 00:32:03,800 --> 00:32:05,880 Speaker 1: as you said, down about two and a quarter percent 591 00:32:06,000 --> 00:32:10,640 Speaker 1: right now, fifty three for NIMEX crude, and looking at 592 00:32:10,640 --> 00:32:13,600 Speaker 1: gasoline though also down about two and a half percent 593 00:32:14,480 --> 00:32:17,120 Speaker 1: on the on the NIMEX, and it's estimate that this 594 00:32:17,240 --> 00:32:19,280 Speaker 1: is going to be a very expensive or at least 595 00:32:19,360 --> 00:32:24,640 Speaker 1: relatively expensive, uh driving season for Americans because gasoline prices 596 00:32:24,680 --> 00:32:27,160 Speaker 1: are higher than they were last year. Thanks very much. 597 00:32:27,200 --> 00:32:29,040 Speaker 1: And it makes a difference. It's a it's amazing that 598 00:32:29,120 --> 00:32:31,800 Speaker 1: that little thing. It's a difference. It's the one prize 599 00:32:31,800 --> 00:32:34,720 Speaker 1: Americans pay attention to the very most. J. J. Kinahanan, 600 00:32:34,760 --> 00:32:37,400 Speaker 1: thank you very much, Chief market strategist t D and 601 00:32:37,480 --> 00:32:40,760 Speaker 1: Merri Trade. You can follow him at t D A J. J. 602 00:32:41,000 --> 00:32:47,959 Speaker 1: Kinahan based in Chicago. Move around most great promotion. Moved 603 00:32:48,600 --> 00:32:52,360 Speaker 1: on like they do. I've never seen anyone move that fast. 604 00:32:56,280 --> 00:33:03,040 Speaker 1: Hired people, let's move like you've got a purpose. That 605 00:33:03,200 --> 00:33:05,960 Speaker 1: he's called movers and shakers, they cost a little more. 606 00:33:06,440 --> 00:33:16,680 Speaker 1: That name cracked me up. Bloomberg Markets Movers and Shakers 607 00:33:16,880 --> 00:33:20,959 Speaker 1: with Carol Messer and Corey Johnson on Bloomberg Radio and 608 00:33:21,040 --> 00:33:23,880 Speaker 1: taking a look at where stocks moved today, Yes they 609 00:33:23,960 --> 00:33:27,760 Speaker 1: closed lower. And looking at the constituents of the SMP, 610 00:33:28,000 --> 00:33:33,480 Speaker 1: five hundred seventy nine stocks advance, four hundred and twenty 611 00:33:33,560 --> 00:33:38,800 Speaker 1: five issues decline, and one remains unchanged. And I know, Corey, 612 00:33:38,840 --> 00:33:41,040 Speaker 1: you're taking a look at a bunch of individual stocks. 613 00:33:41,040 --> 00:33:44,320 Speaker 1: I was looking at t j X, the stock up 614 00:33:44,440 --> 00:33:46,600 Speaker 1: more than six and a half percent today, better than 615 00:33:46,720 --> 00:33:52,480 Speaker 1: estimated results and also increasing the dividend and really kind 616 00:33:52,480 --> 00:33:55,560 Speaker 1: of surprising a lot of analysts. Uh, indeed, you know, 617 00:33:55,600 --> 00:33:57,400 Speaker 1: And I gotta tell you this is absolutely my favorite 618 00:33:57,400 --> 00:34:01,040 Speaker 1: segment of the show because it's it's it's it's come 619 00:34:01,200 --> 00:34:03,000 Speaker 1: on top of the news. But talking about company, what 620 00:34:03,040 --> 00:34:04,960 Speaker 1: companies do, talking about how they're different, talk about companies. 621 00:34:04,960 --> 00:34:07,880 Speaker 1: Don't always talk about companies. Are you gonna talking about 622 00:34:07,920 --> 00:34:11,680 Speaker 1: Stratusis maker? Oh? Yes, three D printers and and a 623 00:34:11,760 --> 00:34:13,719 Speaker 1: full disclosure of ten years ago. I was short this 624 00:34:13,719 --> 00:34:15,080 Speaker 1: when I was a money manager, so I know the 625 00:34:15,080 --> 00:34:18,359 Speaker 1: company a little bit um and a few years ago 626 00:34:18,400 --> 00:34:20,840 Speaker 1: I remember being said, Hey, three D printing, it's the 627 00:34:20,840 --> 00:34:22,640 Speaker 1: new thing. I'm like, it's not a new thing. It's 628 00:34:22,680 --> 00:34:27,280 Speaker 1: twenty five years old. Stratusis reported earnings for the final 629 00:34:27,400 --> 00:34:29,680 Speaker 1: quarter of the of the year, and some that the 630 00:34:29,880 --> 00:34:32,400 Speaker 1: sales were down actually up in the final quarter two percent, 631 00:34:32,480 --> 00:34:35,120 Speaker 1: but three years in a row. I remember all the 632 00:34:35,200 --> 00:34:37,359 Speaker 1: hypes three D printing was getting. Three years ago. We 633 00:34:37,360 --> 00:34:40,719 Speaker 1: were all going to be three three D printed people want? Uh. 634 00:34:40,760 --> 00:34:43,160 Speaker 1: They have had three years of revenue to clients down 635 00:34:43,239 --> 00:34:45,719 Speaker 1: seven percent, down three percent, down one percent for two 636 00:34:45,760 --> 00:34:48,719 Speaker 1: thousand and seventeen. The quarter was ahead of estimates, which 637 00:34:48,719 --> 00:34:50,600 Speaker 1: just tells you something about the analysts, I suppose, not 638 00:34:50,640 --> 00:34:54,440 Speaker 1: really the company, but nonetheless the business um is struggling 639 00:34:54,440 --> 00:34:56,240 Speaker 1: and their guidance is not showing a lot of growth 640 00:34:56,239 --> 00:34:58,480 Speaker 1: going forward, and on a gap basis, they lost a 641 00:34:58,520 --> 00:35:01,120 Speaker 1: lot of money. Again, this is a business that has 642 00:35:01,200 --> 00:35:05,120 Speaker 1: lost money if I look back every year going back 643 00:35:05,160 --> 00:35:08,000 Speaker 1: to two thousand and twelve, and those losses have persisted 644 00:35:08,040 --> 00:35:11,320 Speaker 1: into two thousand seventeen, losing almost ten million dollars in 645 00:35:11,320 --> 00:35:15,520 Speaker 1: the quarter. So stratusis shares getting rocked today down fifteen 646 00:35:15,560 --> 00:35:18,520 Speaker 1: point three percent. As you heard Charlie Pellett say, you know, 647 00:35:18,640 --> 00:35:21,319 Speaker 1: as that the selling today picked up on the SP 648 00:35:21,360 --> 00:35:24,560 Speaker 1: five stratusis, which is on the rustle. Uh, selling in 649 00:35:24,640 --> 00:35:28,240 Speaker 1: those shares accelerating again, down fifteen point three percent today 650 00:35:28,520 --> 00:35:30,839 Speaker 1: to uh pretty close to a fifty two week lolod 651 00:35:30,880 --> 00:35:34,560 Speaker 1: at eighteen dollars and forty cents. I should say, well, 652 00:35:34,600 --> 00:35:39,200 Speaker 1: I can't better the performance of of stratusis on the 653 00:35:39,239 --> 00:35:42,320 Speaker 1: way down, but I will try a cell gene the shares, 654 00:35:42,360 --> 00:35:45,000 Speaker 1: they are down more than nine percent today. This is 655 00:35:45,040 --> 00:35:48,080 Speaker 1: the lowest level in more than three years. Why Well, 656 00:35:48,120 --> 00:35:51,480 Speaker 1: the Food and Drug Administration refused to review a filing 657 00:35:51,840 --> 00:35:55,359 Speaker 1: for what it's supposed to be sell Genes next multi 658 00:35:55,400 --> 00:36:00,319 Speaker 1: billion dollar opportunity. They've got a multiple sclerosis treatment and 659 00:36:00,480 --> 00:36:04,600 Speaker 1: it was expected to offset the company's reliance on its 660 00:36:04,880 --> 00:36:08,640 Speaker 1: best selling drug, which is the cancer pill reb Limit. Well, 661 00:36:08,800 --> 00:36:12,360 Speaker 1: the disappointment comes after there was a study about another 662 00:36:12,520 --> 00:36:17,080 Speaker 1: therapy on Crohn's disease and a pretty bad third quarter report. 663 00:36:17,480 --> 00:36:20,560 Speaker 1: Having said all that, the shares of cell Gene continuing, 664 00:36:20,640 --> 00:36:25,239 Speaker 1: they decline lower by nine percent. Today. Your wife is 665 00:36:25,400 --> 00:36:28,080 Speaker 1: lovely and beautiful and fashionable, and I'll bet she doesn't 666 00:36:28,080 --> 00:36:31,640 Speaker 1: shop at Chicos. I don't think there is a Chicos nearby. 667 00:36:31,960 --> 00:36:36,360 Speaker 1: Um Uh. Nonetheless, where there is a yes and no 668 00:36:36,600 --> 00:36:41,440 Speaker 1: has that there is a crowd. Chico's shares fantastic return 669 00:36:41,560 --> 00:36:45,000 Speaker 1: up fiftent after reporting fourth quarter numbers. I remember we 670 00:36:45,040 --> 00:36:46,759 Speaker 1: were just talking earlier in the show about hope that 671 00:36:46,800 --> 00:36:49,120 Speaker 1: maybe the gap and others could show real positive results 672 00:36:49,120 --> 00:36:53,640 Speaker 1: in clothing sales clothing retailer as well. Chicos a triffic quarter. 673 00:36:53,719 --> 00:36:55,719 Speaker 1: They beat uh the estimates once again, and all the 674 00:36:55,760 --> 00:36:58,520 Speaker 1: disease of the analysts were wrong. But comps, sales were up, 675 00:36:58,719 --> 00:37:02,120 Speaker 1: gross margins improved, better than expected earnings, and they're able 676 00:37:02,120 --> 00:37:04,040 Speaker 1: to take price apparently, and that was really the great 677 00:37:04,040 --> 00:37:06,360 Speaker 1: thing on the call, according to some of the analysts 678 00:37:06,400 --> 00:37:08,480 Speaker 1: listen to it, saying that the prices are finally corsoing 679 00:37:08,520 --> 00:37:10,880 Speaker 1: to come to pieces are coming together for that company, 680 00:37:11,280 --> 00:37:13,560 Speaker 1: UM and UH. As a result, we saw shares of 681 00:37:13,640 --> 00:37:17,520 Speaker 1: Chicos today up fifteen point eight percent. I'm going to 682 00:37:17,640 --> 00:37:20,760 Speaker 1: call that sixteen percent because I can round numbers because 683 00:37:20,800 --> 00:37:24,680 Speaker 1: I went to the second grade and UH. A nice 684 00:37:24,680 --> 00:37:27,640 Speaker 1: move for Chicos sales. However, for the year, we're down 685 00:37:28,080 --> 00:37:30,800 Speaker 1: eight percent, but it looks like, at least according to 686 00:37:30,840 --> 00:37:32,120 Speaker 1: some of the people listening to the call, leg of 687 00:37:32,160 --> 00:37:34,719 Speaker 1: those numbers at the turnaround has occurred at Chicos. Do 688 00:37:34,760 --> 00:37:38,920 Speaker 1: you know what was up today? Volatility? Yeah, the volatility index. 689 00:37:39,000 --> 00:37:42,319 Speaker 1: Of course, the VIX up more than eight and a 690 00:37:42,400 --> 00:37:45,680 Speaker 1: quarter percent. It adds one point five seven and to 691 00:37:45,760 --> 00:37:49,960 Speaker 1: the there we go twenty point one six. So big move. 692 00:37:50,080 --> 00:37:52,560 Speaker 1: Yesterday we had a seventeen and a half percent increase 693 00:37:52,600 --> 00:37:56,120 Speaker 1: in the VIX yesterday and now an eight and a 694 00:37:56,239 --> 00:38:01,239 Speaker 1: quarter percent increase in the VIX today. This boom Brook markets. Dave, 695 00:38:01,320 --> 00:38:07,360 Speaker 1: you're hi, My name is Dave. Just what do you 696 00:38:07,480 --> 00:38:12,920 Speaker 1: think you're doing. We're going for the bank down Wilson, Dave, Dave, 697 00:38:15,520 --> 00:38:18,120 Speaker 1: Dave Wilson. George's right now with the stock, and that 698 00:38:18,160 --> 00:38:22,120 Speaker 1: would be Rogers Corporation. Corey. There's a company that's all 699 00:38:22,120 --> 00:38:26,359 Speaker 1: about silicone and other advanced materials. Their products are used 700 00:38:26,400 --> 00:38:30,960 Speaker 1: in electronics and communications gear, along with wind and solar equipment, 701 00:38:31,080 --> 00:38:35,000 Speaker 1: planes and trains, and I suppose automobiles too, But in 702 00:38:35,000 --> 00:38:38,960 Speaker 1: any case, Rogers have been around since eighteen thirty two 703 00:38:39,280 --> 00:38:42,240 Speaker 1: and has been publicly traced since nineteen sixty. The ticker 704 00:38:42,719 --> 00:38:45,120 Speaker 1: is r O G. If you look at the last 705 00:38:45,160 --> 00:38:48,279 Speaker 1: couple of years, the company's shares have been on a roll. 706 00:38:48,520 --> 00:38:52,239 Speaker 1: They jumped a hundred and eleven percent in twenty seventeen 707 00:38:52,760 --> 00:38:57,680 Speaker 1: after climbing forty nine percent in twent sixteen. Will received 708 00:38:57,680 --> 00:39:02,479 Speaker 1: the earnings reports contributed to Rogers gains, and today fourth 709 00:39:02,560 --> 00:39:05,440 Speaker 1: quarter results that didn't go over so well caused the 710 00:39:05,480 --> 00:39:09,120 Speaker 1: stock to give back some of them. Earnings trailed analysts 711 00:39:09,160 --> 00:39:11,960 Speaker 1: average estimate the Bloomberg Survey for the first time in 712 00:39:12,040 --> 00:39:13,719 Speaker 1: two and a half years. It was all about the 713 00:39:13,760 --> 00:39:18,880 Speaker 1: bottom line. Top line actually looked okay, beating estimates. Rogers 714 00:39:18,920 --> 00:39:23,600 Speaker 1: attributed the profit shortfall to hire commodity prices along with 715 00:39:23,680 --> 00:39:27,520 Speaker 1: the costs of making some investments in its business. When 716 00:39:27,560 --> 00:39:30,520 Speaker 1: you put it all together, the stock Rogers r O 717 00:39:30,640 --> 00:39:34,040 Speaker 1: G down almost twenty one and a half percent at 718 00:39:34,040 --> 00:39:36,400 Speaker 1: its low point of the day, and even though the 719 00:39:36,440 --> 00:39:39,000 Speaker 1: stock did manage to make back some of those losses, 720 00:39:39,400 --> 00:39:43,160 Speaker 1: still closed down twelve percent, steepest decline a year and 721 00:39:43,200 --> 00:39:46,360 Speaker 1: a half. Not to be confused with Rogers Communications, not 722 00:39:46,520 --> 00:39:49,839 Speaker 1: at all, although it may very well be that Rogers Corp. 723 00:39:49,920 --> 00:39:53,080 Speaker 1: Equipment is on Rogers Communications networks. Just to confuse thing. 724 00:39:54,000 --> 00:39:56,080 Speaker 1: And of course Bloomberg has a partnership with Rogers Communication. 725 00:39:56,120 --> 00:39:59,280 Speaker 1: Our old friend, general Early Peter Rogers founded the company 726 00:39:59,800 --> 00:40:02,600 Speaker 1: John Yes, and he's up there and doing good stuff 727 00:40:02,640 --> 00:40:04,600 Speaker 1: up in Toronto right now, all right, I was just 728 00:40:04,640 --> 00:40:09,239 Speaker 1: gonna say, Peter Rogers Paper Manufacturing eighty two. Thanks very much, 729 00:40:09,280 --> 00:40:14,520 Speaker 1: Dave Wilson, thanks for listening to Coast to Coast. You 730 00:40:14,520 --> 00:40:18,320 Speaker 1: can subscribe to this podcast on iTunes, SoundCloud, or Bloomberg 731 00:40:18,400 --> 00:40:20,160 Speaker 1: dot com. You can also listen to our radio show 732 00:40:20,200 --> 00:40:23,479 Speaker 1: weekdays two o'clock Eastern only on Bloomberg Radio and follow 733 00:40:23,560 --> 00:40:26,560 Speaker 1: us on Twitter. She's at Carol Masser. I'm at Corey TV.