WEBVTT - Markets, ETFs, Travel, And Top Gun (Podcast) 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 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.119 at Bloomberg dot com slash podcast. Well, our next guest 0:00:22.320 --> 0:00:25.079 is all in the state of Kentucky. We've got an 0:00:25.160 --> 0:00:29.600 undergraduate degree from the University of Kentucky, Wildcats NBA, from 0:00:29.600 --> 0:00:32.159 the University of Louisville, the Cardinals. I don't know who 0:00:32.200 --> 0:00:35.760 he roots for during hoops season. Ross Mayfield Investment Strategy 0:00:35.760 --> 0:00:39.839 annals for Bared Wealth Management, Ross Louisville Place, Kentucky. Who 0:00:39.840 --> 0:00:43.839 do you root for? It's Kentucky, highest times out of Kentucky, 0:00:43.960 --> 0:00:47.879 high times out of that's strong. That's a strong. Yeah, 0:00:47.880 --> 0:00:50.639 they get some strong support there, dude. UK. I met 0:00:50.720 --> 0:00:53.440 Rick Pettino when I was a kid looking at UK. 0:00:54.000 --> 0:00:56.440 Really yeah, how'd that go? It was awesome? I Mean 0:00:57.320 --> 0:01:01.520 I wasn't Ohio State fan obviously, but love Kentucky. Love 0:01:02.120 --> 0:01:04.640 going down to Lexington and uh yeah, hey, Ross, what 0:01:04.640 --> 0:01:06.720 do you make of this thirty year bond, it's two 0:01:06.760 --> 0:01:09.120 point seven nine percent. I thought we were just at 0:01:09.160 --> 0:01:11.840 like three point three three point four. What's going on 0:01:11.840 --> 0:01:15.720 in the bottom market. What's that telling us? Uh? Growth 0:01:15.800 --> 0:01:18.160 scare right, It's telling us that the market is finally 0:01:18.760 --> 0:01:21.639 convinced that the set is I'm going to do whatever 0:01:21.640 --> 0:01:25.040 it takes. And increasingly that looks like, you know, some 0:01:25.080 --> 0:01:28.080 sort of recession, whether it's mild or not is up 0:01:28.080 --> 0:01:30.679 for debate, but I think there's you know that you 0:01:30.800 --> 0:01:33.200 talk talk about copper, talk about treasure, you olds, talk 0:01:33.200 --> 0:01:36.600 about other industrial medals, all of them are reflecting, um 0:01:36.680 --> 0:01:38.880 increased odds of a of a recession and of a 0:01:39.360 --> 0:01:41.480 big growth turned down. So I think that's that's what 0:01:41.560 --> 0:01:43.959 it is. And at the same time, you know, increasing 0:01:43.959 --> 0:01:46.520 odds that because of that, we can kind of you know, 0:01:46.600 --> 0:01:49.960 defeat this inflation. Uh, you know, within the next twelve 0:01:50.000 --> 0:01:53.120 months or so. I was looking. We've been talking about 0:01:53.120 --> 0:01:55.120 the Michael Burry tweet. I don't know if you saw 0:01:55.160 --> 0:01:59.000 it UM yesterday, but he said basically, the first half 0:01:59.240 --> 0:02:03.040 was awful. SMP down, NASAC down thirty five, bit coming 0:02:03.080 --> 0:02:06.320 down six says that was at least in terms of 0:02:06.360 --> 0:02:11.000 stocks multiple compression. Next up is earnings compression, so he says, 0:02:11.040 --> 0:02:13.520 maybe we're halfway there. Not to be fair, he calls 0:02:13.600 --> 0:02:16.040 himself Cassandra, he's a little bit dramatic about this kind 0:02:16.040 --> 0:02:20.359 of thing, But, um, how much do you think earnings 0:02:20.560 --> 0:02:25.000 will be hit? Well, you don't get movies made about 0:02:25.040 --> 0:02:26.760 you if you're not a little bit dramatic. I guess 0:02:27.720 --> 0:02:30.880 you know, I think earnings will take a hit, right, 0:02:30.919 --> 0:02:35.040 So currently I think I think the estimate for SMP 0:02:35.720 --> 0:02:38.960 earnings it's still something like two fifty, which is which 0:02:39.000 --> 0:02:43.040 is ish growth. Um at a minimum, if you're looking 0:02:43.080 --> 0:02:45.120 at even a minor re session economics light down, that 0:02:45.200 --> 0:02:47.640 probably has to be flat or slightly down. You know, 0:02:47.680 --> 0:02:52.720 the average recession earnings contractions is like plus on the 0:02:52.800 --> 0:02:56.080 on the downside usually or on average. So you know, 0:02:56.160 --> 0:02:59.079 even if you saw something like five, you know, kind 0:02:59.080 --> 0:03:01.840 of earnings contracts in the the next year, um, that 0:03:01.840 --> 0:03:04.800 would be meaningful. Versus where estimates are now, you're starting 0:03:04.840 --> 0:03:07.880 to see kind of one by one. Uh. You know, 0:03:08.040 --> 0:03:10.520 companies come out with guidance that's a little bit lower, 0:03:10.560 --> 0:03:12.560 a little bit more hesitant. But I think as we 0:03:12.600 --> 0:03:14.960 get into this this next earning season, you'll start to 0:03:14.960 --> 0:03:17.840 see it um kind of in mass, and the question 0:03:17.840 --> 0:03:22.120 would just be is it is downside or is downside? 0:03:22.120 --> 0:03:24.880 What are they seeing in real time as far as 0:03:24.919 --> 0:03:29.560 the consumer goes as far as investment goes um, because 0:03:29.560 --> 0:03:31.840 I think that's the big question. Right. Consumers held up 0:03:31.880 --> 0:03:34.320 pretty well, but there's there's a lot of pressure, right. 0:03:34.440 --> 0:03:39.080 I mean, Lisa Shaalott from Morgan Stanley was saying, you 0:03:39.080 --> 0:03:43.200 know what, this kind of inflation driven recession isn't going 0:03:43.240 --> 0:03:46.000 to be as bad as the kind of credit driven 0:03:46.080 --> 0:03:47.920 recession that we had in two thousand and eight, and 0:03:47.960 --> 0:03:51.520 that was a profit decline of fifty seven percent, So 0:03:51.600 --> 0:03:54.160 she says, we're not likely to see anything that bad. 0:03:54.520 --> 0:03:56.800 But I just wonder if stocks can get hit as 0:03:56.840 --> 0:04:00.600 hard we're down, can we really fall fifty percent by 0:04:00.640 --> 0:04:03.920 the end of this thing. I think a lot of 0:04:03.920 --> 0:04:06.160 the pain is priced in. I think there's I think 0:04:06.480 --> 0:04:10.800 earnings pain is already priced into stocks now. Estimates still 0:04:10.800 --> 0:04:12.800 have to come down, but you know, I think the 0:04:12.840 --> 0:04:15.720 market is sniffing that out ahead of time. Yeah, I 0:04:15.760 --> 0:04:17.840 think there could be a further leg down, but I 0:04:18.240 --> 0:04:19.840 would be surprised if they were that big of a 0:04:19.920 --> 0:04:22.320 sell off for the reason that you mentioned it's, you know, 0:04:22.320 --> 0:04:26.599 there's nothing seemingly systemic that's wrong. Um. You know, big 0:04:26.680 --> 0:04:30.320 valuation compression obviously, and inflation is hitting you know, the 0:04:30.360 --> 0:04:33.520 consumer and companies in all sorts of ways. But um, 0:04:33.640 --> 0:04:37.400 we're still in a pretty decent position as far as profitability, 0:04:37.440 --> 0:04:40.200 as far as earnings. You know, profit margins are rolling over, 0:04:40.240 --> 0:04:43.320 but they're still elevated. The consumer is strained, but you 0:04:43.360 --> 0:04:46.520 still have that a couple of trillion, and aggregate savings UM, 0:04:46.640 --> 0:04:48.680 wage growth is still there. The job market is still 0:04:48.680 --> 0:04:51.000 white hot. So one of the things we've been talking 0:04:51.000 --> 0:04:53.840 about is, you know, recessions don't always look like the 0:04:53.920 --> 0:04:55.840 last two. They don't always look like oh eight in 0:04:55.880 --> 0:04:59.479 the coronavirus crash where GDP falls off a cliff, things 0:04:59.480 --> 0:05:01.880 are catast d optick. There's a history of much more 0:05:01.960 --> 0:05:05.080 kind of mild recessions UM, and I think that's probably 0:05:05.120 --> 0:05:08.640 what we're headed for. Given worth the starting point, Ross, 0:05:08.720 --> 0:05:11.560 what's the question you're getting most often from your bared 0:05:11.760 --> 0:05:16.839 wealth management clients you know at this point, And I 0:05:16.880 --> 0:05:20.320 think it's reflective of the past few selloffs and bear 0:05:20.400 --> 0:05:23.040 markets have really been v shaped in nature, and this 0:05:23.080 --> 0:05:25.720 one is much more grinding. Already a couple of headsake 0:05:25.760 --> 0:05:28.600 bear market alleyes. So the biggest question is when does this, 0:05:28.800 --> 0:05:31.760 When does this end? Where's the bottom? And you know, 0:05:31.800 --> 0:05:35.279 obviously that's a borderline impossible question to answer. But given 0:05:35.320 --> 0:05:37.680 that there's still probably some some earnings pay to come, 0:05:38.120 --> 0:05:40.919 given that we haven't really seen the kind of capitulation 0:05:40.960 --> 0:05:42.400 that you'd want to see out of stocks, you know, 0:05:42.560 --> 0:05:45.120 at the top um mentioning that the VIX is still 0:05:45.120 --> 0:05:47.160 sub thirty. You know, when the markets in a bear 0:05:47.279 --> 0:05:50.719 market is pretty wild. Um, you just haven't seen that capitulations. 0:05:50.760 --> 0:05:52.640 They want to know where the bottom is. But the 0:05:52.640 --> 0:05:55.600 reality is that bear markets outside of the kind of 0:05:55.680 --> 0:05:57.920 q E era are are much longer. You know, it's 0:05:58.160 --> 0:06:01.480 twelve eighteen month processes. And so that's what we're getting 0:06:01.480 --> 0:06:04.000 folks accustomed with is kind of setting that expectation that 0:06:04.080 --> 0:06:07.039 this could be a longer slog um, you know, much 0:06:07.080 --> 0:06:10.640 like maybe dot Com but the the past. All right, Ross, 0:06:10.680 --> 0:06:12.919 good stuff, Appreciate you're taking the time here. On a 0:06:13.000 --> 0:06:17.240 Friday before July four, Ross Mayfield, investment strategy analyst for 0:06:17.279 --> 0:06:22.480 BARED Wealth Management, be A, University of Kentucky, NBA from Louisville. 0:06:22.520 --> 0:06:25.040 That's a good basketball rivalry down there. Have you ever 0:06:25.080 --> 0:06:27.720 been to Kentucky? I have great bowling Green. I'm a 0:06:27.720 --> 0:06:34.720 big fan of Bowling Green Kentucky. Now you bring in 0:06:34.960 --> 0:06:36.920 Katie and I have no idea what's going on with 0:06:36.920 --> 0:06:39.640 her story here? Well, here's the d I mean, she's 0:06:39.680 --> 0:06:42.400 in her student Katie Greifeld Cross reporters in our studio. 0:06:42.920 --> 0:06:46.400 By the way, story Cross asset reporter. Uh. I don't 0:06:46.400 --> 0:06:50.000 even think it does her justice. She is an absolute 0:06:50.040 --> 0:06:52.240 expert at the world of E t F s. She 0:06:52.400 --> 0:06:54.919 also knows what she's talking about when comes to crypto. 0:06:55.360 --> 0:06:59.560 She's got like seventy five thousand followers on Twitter, and 0:07:01.120 --> 0:07:05.320 she's just generally a markets news hound. Okay, Now, I 0:07:05.360 --> 0:07:11.600 told my boss is listening. Even dummies like me and 0:07:11.640 --> 0:07:16.360 Paul know that it has been a bad time for bonds. 0:07:16.440 --> 0:07:19.600 I mean, we've never seen anything like this. Investors that 0:07:19.680 --> 0:07:22.280 normally thought, oh, this is where I go for safety 0:07:22.320 --> 0:07:25.200 are now thinking where in the hell can I go? Right? 0:07:25.760 --> 0:07:27.480 And what you're saying is a lot of them have 0:07:27.600 --> 0:07:29.320 chosen E t F s. A lot of them have 0:07:29.400 --> 0:07:32.200 chosen E t F So this is something that always happens. 0:07:32.200 --> 0:07:34.200 You have sort of this moment in markets, and E 0:07:34.360 --> 0:07:37.000 t F issuers rushed to capture it. So the current 0:07:37.080 --> 0:07:40.240 shiny object among E t F issuers right now is 0:07:40.360 --> 0:07:43.400 income E t F. So the strategies vary a little bit, 0:07:43.480 --> 0:07:46.600 but in all of them, at least the most recent filings, 0:07:46.680 --> 0:07:49.400 it seems to be that either of these funds invest 0:07:49.680 --> 0:07:54.720 in equities that offer dividends, or they write some sort 0:07:54.760 --> 0:07:57.880 of call writing strategy on the s. Give us some tickers. 0:07:57.920 --> 0:08:01.640 We like tickers here, okay, so, and also we love this. 0:08:01.840 --> 0:08:03.960 To me, it's a great story because it brings together 0:08:04.040 --> 0:08:06.840 two of my favorite functions we love on this show. 0:08:06.960 --> 0:08:10.160 I n GO shows you all the indexes and it's 0:08:10.160 --> 0:08:12.040 a great search tool, and we love E t F GO. 0:08:12.360 --> 0:08:16.080 We do love I know, honestly, it's probably the best, 0:08:16.120 --> 0:08:18.440 my favorite function at Bloomberg. But in any case, in 0:08:18.480 --> 0:08:20.200 just the past few weeks, you've had three of these 0:08:20.240 --> 0:08:24.040 funds launched U d I T U g N N 0:08:24.280 --> 0:08:27.440 J p r E. But there's one that really taught 0:08:29.480 --> 0:08:32.080 U g N is a good one. Growth in income 0:08:32.120 --> 0:08:35.360 E t F tickers are fun. But the fund that 0:08:35.400 --> 0:08:38.240 caught my it actually launched in the last two years. 0:08:38.640 --> 0:08:41.720 It's the JP Morgan Equity Premium Income e t F. 0:08:41.800 --> 0:08:44.560 The reason that I came across this fund, Matt, was 0:08:44.600 --> 0:08:48.480 because we talked to Brian Lake of JP Morgan on 0:08:48.559 --> 0:08:50.040 the E t F Show this week and we were 0:08:50.040 --> 0:08:52.360 talking about income funds super hot. So I decided to 0:08:52.360 --> 0:08:54.839 try and put some numbers to that. This JP Morgan 0:08:54.880 --> 0:08:58.520 Equity Premium jp J e p I. It is one 0:08:58.559 --> 0:09:01.360 of the biggest income funds out there. It's seen inflows 0:09:01.440 --> 0:09:04.760 of over five billion dollars this year for relatively new 0:09:04.800 --> 0:09:08.079 fund that doesn't really happen all too often, and it's 0:09:08.080 --> 0:09:10.319 in the top ten of equity e t F and 0:09:10.360 --> 0:09:13.319 flows so far this year. Well, income funds seem like 0:09:14.120 --> 0:09:16.080 they should be sustainable. Like I think about the e 0:09:16.120 --> 0:09:18.600 t F world, your e t F world, Eric about 0:09:18.600 --> 0:09:21.520 tunis et F world. It's very niche. You know, whatever 0:09:21.559 --> 0:09:23.880 is the spright shiny object, Let's create an e t 0:09:24.040 --> 0:09:27.200 F for that. But income funds are universal, it seems 0:09:27.200 --> 0:09:29.440 to me. Yeah, And so a lot of this is 0:09:29.480 --> 0:09:32.480 sort of repackaging the idea, trying to make you know, 0:09:32.600 --> 0:09:36.839 just following dividends seem exciting. Well, it's but here's the 0:09:37.200 --> 0:09:41.679 key and Jack Bogel might himself love this. In order 0:09:41.720 --> 0:09:45.559 to stay on top of um an income stocks portfolio, 0:09:45.920 --> 0:09:48.240 you occasionally have to trade in and out right. That 0:09:48.400 --> 0:09:51.720 costs money. A mutual fund would maybe give you a 0:09:51.760 --> 0:09:54.200 little bit less of a cost, but you're still paying 0:09:54.200 --> 0:09:56.200 the manager. With an e t F, you get the 0:09:56.240 --> 0:09:59.760 cost down even further, so you're able to have this 0:10:00.840 --> 0:10:06.080 uh bonds like return without having to pay the equity 0:10:06.120 --> 0:10:10.560 trading fees is left the pitch. That's the pitch. So 0:10:10.600 --> 0:10:12.760 if you look at Jeff for example, it's an actively 0:10:12.960 --> 0:10:16.520 traded e t F charges just thirty five basis points. 0:10:16.520 --> 0:10:19.360 That's pretty cheap. But to your point that these are 0:10:19.360 --> 0:10:22.400 offering bond like returns, that's sort of the angle that 0:10:22.440 --> 0:10:24.959 I drilled into into this piece because it sounds really 0:10:25.000 --> 0:10:28.080 good that you get income without sort of the drama 0:10:28.120 --> 0:10:29.719 that's going on in the bond market right now. But 0:10:29.760 --> 0:10:32.560 I was talking to um ben Levine. He's over at 0:10:32.640 --> 0:10:34.800 three D Asset Management Group. He was actually also on 0:10:34.840 --> 0:10:36.880 the et F show, but I had COVID for that episode. 0:10:36.960 --> 0:10:41.040 But in any case, he made the point that these 0:10:41.240 --> 0:10:44.920 are sort of equity beta in income clothing. These are 0:10:45.040 --> 0:10:51.600 not the bonds sort of portfolio diversification, sort of layers 0:10:51.640 --> 0:10:54.320 of your portfolio. Basically, you shouldn't be using this as 0:10:54.320 --> 0:10:57.280 a substitute for fixed income. And the worry, at least 0:10:57.280 --> 0:10:58.760 for him and some of the other people I talked to, 0:10:58.880 --> 0:11:01.679 was that investors will basically, so this is the to 0:11:01.840 --> 0:11:05.200 be sure paragraph. This is the actually made the whole article, 0:11:05.320 --> 0:11:08.440 the to be sure because again this is the shiny 0:11:08.440 --> 0:11:10.319 object of the moment. You see a lot of issuers 0:11:10.360 --> 0:11:13.360 chasing this. This is a typical be in construction. They'll 0:11:13.400 --> 0:11:16.600 have the first, you know, four paragraphs of the story 0:11:16.800 --> 0:11:21.559 investors are switching into urn rather than bonds. And then 0:11:21.640 --> 0:11:25.320 in the second, after the after the page, it'll say 0:11:25.440 --> 0:11:28.000 to be sure, and then they give you the which 0:11:28.040 --> 0:11:34.640 is really like secrets, that is that is it's important 0:11:34.679 --> 0:11:37.439 though to introduce a little bit of skepticism. Of course, 0:11:37.480 --> 0:11:40.040 these are the high flyers right now, which really speaks 0:11:40.080 --> 0:11:42.240 to the mood of the market, that just dividend funds 0:11:42.240 --> 0:11:46.679 are the high flyers right now. But again, these aren't bonds, 0:11:46.720 --> 0:11:49.439 and if you're looking to diversify your portfolio, I mean, 0:11:49.480 --> 0:11:51.319 maybe you should still keep bonds in it. You want 0:11:51.320 --> 0:11:54.640 to be safe. And by the way, I know a 0:11:54.640 --> 0:11:57.480 crypto fund that will pay you like, oh, tell me 0:11:57.520 --> 0:12:02.000 about that? Kidding it crash okay, alright, so all right, 0:12:02.320 --> 0:12:05.080 so talk to us like e t F fund flows. 0:12:05.200 --> 0:12:07.520 Given this first half of the year, where you know, 0:12:07.559 --> 0:12:10.680 the s andps down twenty plus percent, bonds are down 0:12:10.720 --> 0:12:13.040 double digits, how have the e t F flow has been? 0:12:13.120 --> 0:12:15.160 What have you seen in terms of trends? So it's 0:12:15.160 --> 0:12:17.520 brutal out there. We're actually just talking about it on 0:12:17.559 --> 0:12:20.600 the ten am show on BTV. Basically, if you look 0:12:20.720 --> 0:12:24.040 at where the money went in the first half, Spy 0:12:24.200 --> 0:12:28.440 that is the state street spider sputf in the world. 0:12:28.520 --> 0:12:31.000 We all know it, the O G B O G. 0:12:31.320 --> 0:12:34.640 But it's relatively expensive. It costs ten basis points, whereas 0:12:34.640 --> 0:12:37.960 if you look at Vanguards answer to spy voo v 0:12:38.160 --> 0:12:41.520 o o uh, it costs three basis points. So Spy 0:12:41.640 --> 0:12:47.079 loss about twenty three basis points. It's a great question. Well, 0:12:47.160 --> 0:12:50.520 Vanguard is special. They have their mutual ownership model. They 0:12:50.520 --> 0:12:54.000 don't really need to make money. Okay, bo actually manages 0:12:54.040 --> 0:12:59.520 it from heaven. That's how that's how they do it. Yeah, 0:12:59.640 --> 0:13:02.480 but in any case, you saw maybe twenty six billion 0:13:02.480 --> 0:13:06.000 dollars come out of Spy um and about that much 0:13:06.000 --> 0:13:09.320 going into do right exactly, So perhaps people exiting the 0:13:09.360 --> 0:13:11.960 market and then trying to come back in, we're going 0:13:11.960 --> 0:13:15.120 into the cheaper products. So the Vanguard products did pretty 0:13:15.160 --> 0:13:18.680 well this first half again because they cost absolutely nothing. 0:13:19.160 --> 0:13:22.160 But I mean you saw outflows from broader SMP five 0:13:22.200 --> 0:13:25.320 hundred tracking funds that weren't Vanguard, from high yield funds, 0:13:25.520 --> 0:13:30.560 from financials, basically everything. This is actually I'm just using 0:13:30.600 --> 0:13:33.280 that e t F go function, Matt, and I just 0:13:33.400 --> 0:13:36.120 saw something that actually is pretty cool. You know, the 0:13:36.559 --> 0:13:40.559 year to date cash outflows of spy twenty five point 0:13:40.600 --> 0:13:48.120 five billion and then inflows into Voot four billions. That's there. 0:13:48.160 --> 0:13:51.439 You just, yeah, I could see it with you weren't 0:13:51.480 --> 0:13:55.080 lying there. What I what I wanted to actually ask 0:13:55.120 --> 0:13:58.040 Brian Lake last week and what I want to actually 0:13:58.120 --> 0:14:00.200 this week? Oh it was this week. That's it. It 0:14:00.240 --> 0:14:02.600 was just Monday. Uh. And this is something that maybe 0:14:02.600 --> 0:14:04.280 we can talk about on our E t F show 0:14:04.440 --> 0:14:08.280 Wednesday at one pm. Um. Is it a good thing 0:14:08.320 --> 0:14:11.280 to have these two, this duopoly in E t F 0:14:11.360 --> 0:14:16.080 because it's like black Rock and Vanguard are pretty much it. Yeah, 0:14:16.200 --> 0:14:18.880 State Street used to be the solid number three, but 0:14:18.920 --> 0:14:22.280 they've been sort of straggling in recent years. I can't 0:14:22.280 --> 0:14:24.880 answer that question. We should ask the next work on 0:14:24.880 --> 0:14:28.480 it with the big Wednesday. Yeah, next week, all right, 0:14:28.520 --> 0:14:32.160 Katie Grayfeld, crossset reporter Bloomberg. Well, I'm almos gonna say 0:14:32.200 --> 0:14:36.000 Bloomberg quick take. Maybe we have to rewrite that. Eric, 0:14:39.320 --> 0:14:41.520 let's switch gears. Talk about travel. It's gonna be a 0:14:41.520 --> 0:14:44.280 big travel weekend this weekend. I'm just driving down to 0:14:44.320 --> 0:14:47.160 the Jersey Shore. No other place I'd rather be, but 0:14:47.200 --> 0:14:49.320 a lot of people are hopping on planes and trains 0:14:49.320 --> 0:14:51.120 and automobiles and stuff like that. It's check in with 0:14:51.360 --> 0:14:56.960 Alicia Kapoor, senior industry manager at similar Web. Alicia, how 0:14:57.000 --> 0:14:58.840 busy is it gonna be out there? What's this summer 0:14:58.880 --> 0:15:01.080 going to be like? Given some of the travel challenges 0:15:01.120 --> 0:15:04.280 that are out there? You know, this weekend is really 0:15:04.360 --> 0:15:07.240 really busy, and I'm seeing that in person. I'm actually 0:15:07.280 --> 0:15:09.440 talking to you from Poland, Um, where I'm here for 0:15:09.520 --> 0:15:12.280 a wedding and a lot of Yeah, Poland UM, I'm 0:15:12.320 --> 0:15:14.440 in I'm not going to pronounce it right, but it's 0:15:14.440 --> 0:15:18.360 called um. So I'm here for a wedding and a 0:15:18.400 --> 0:15:21.400 lot of guests are delayed, and we are seeing just 0:15:21.520 --> 0:15:24.400 in terms of search volume, that consumers are seeing a 0:15:24.400 --> 0:15:28.760 lot of cancelations, especially for flights, and search volume for 0:15:28.840 --> 0:15:33.480 airline cancelations rose between thirty four and six over the 0:15:33.480 --> 0:15:38.000 past twenty eight days, with most searches going to American airlines. 0:15:38.080 --> 0:15:40.680 And we're actually seeing that American Airlines has the highest 0:15:40.680 --> 0:15:45.520 share of traffic to its cancelation pages online UM and 0:15:45.840 --> 0:15:48.000 they've really had a high share of traffic to those 0:15:48.040 --> 0:15:53.120 cancelation pages since about May, and most airlines are seeing 0:15:53.160 --> 0:15:56.040 increased traffic. I think it's really just staffing issues are 0:15:56.040 --> 0:15:59.560 getting in the way. People weren't expecting this resurgence and 0:15:59.600 --> 0:16:02.280 demand and a lot of people are trying to travel now, 0:16:03.000 --> 0:16:07.320 um maybe before we get into an environment where prices 0:16:07.520 --> 0:16:10.800 are even more UM volatile, right. I think there's a 0:16:10.800 --> 0:16:13.480 lot of price sensitivity that's coming into the picture right now. 0:16:13.960 --> 0:16:18.120 So they're worried about they're worried about coming inflation. Yeah, 0:16:18.200 --> 0:16:20.480 I think people are worried about coming inflation. I was 0:16:20.520 --> 0:16:23.360 actually talking to a client yesterday that said they're seeing 0:16:23.400 --> 0:16:26.160 really high bookings for next summer because people are trying 0:16:26.200 --> 0:16:29.600 to pay with payment plans or kind of put off 0:16:29.640 --> 0:16:33.400 the pricing because they can't afford this summer. So, you know, 0:16:33.440 --> 0:16:35.640 you're in EUROPEO. We've heard some stories that just some 0:16:35.840 --> 0:16:38.080 strikes and it's you know, as bad as this travel 0:16:38.160 --> 0:16:41.800 is here, it's even worse than Europe. What are you seeing? Yeah, 0:16:41.840 --> 0:16:44.400 it's a great question. I was actually in London before 0:16:44.400 --> 0:16:46.680 this there was a tube strike. It was a little 0:16:46.720 --> 0:16:49.680 bit stressful. But we are seeing that bookings in Europe 0:16:49.720 --> 0:16:54.000 for top brands are declining into June UM with only 0:16:54.040 --> 0:16:57.120 booking dot Com actually seeing an increase in daily lodging 0:16:57.120 --> 0:17:00.760 bookings month over months since May. And that picture is 0:17:00.800 --> 0:17:03.160 really different in the US. UM the U S we're 0:17:03.160 --> 0:17:06.240 seeing that all brands are seeing an increase in bookings. 0:17:06.240 --> 0:17:08.840 So I think you're right. Europe is seeing more struggles 0:17:08.880 --> 0:17:12.959 than the United States, and unfortunately it is impacting bookings 0:17:12.960 --> 0:17:16.439 across the board. All right, Alicia, thanks so much. We 0:17:16.480 --> 0:17:19.920 appreciate that, especially coming from Poland. Enjoy the wedding over 0:17:19.920 --> 0:17:23.359 the careful of the Russians. Yeah, be careful right there, 0:17:23.119 --> 0:17:26.200 they're right there, But NATO is right there. I gotta 0:17:26.240 --> 0:17:29.240 tell you something. I moved to London about twenty years ago, 0:17:29.480 --> 0:17:31.359 and I lived there for a few years, some of 0:17:31.400 --> 0:17:33.840 the greatest years of my life. Sure, because it's a 0:17:33.840 --> 0:17:38.399 great town and because I was young. But um, there's 0:17:38.480 --> 0:17:41.800 literally always a tube strike. Yes, it's a constant thing. 0:17:42.160 --> 0:17:45.159 It's not now or last year, is not COVID or 0:17:45.200 --> 0:17:48.440 pre pandemic. It's a constant, always a tube strike. And 0:17:48.440 --> 0:17:50.560 I feel the same thing with like air France or 0:17:50.600 --> 0:17:52.720 you know, are you know air it Tally or something 0:17:52.720 --> 0:17:58.159 like exactly all right, that's Alicia, senior industry manager for 0:17:58.160 --> 0:18:04.399 a similar web bringing. Uh. I think it's fair to 0:18:04.440 --> 0:18:06.760 say a friend of the show. You've interviewed Mark Douglas, 0:18:06.760 --> 0:18:09.080 president CEO of Mountain a number of times. Mountain is 0:18:09.119 --> 0:18:13.760 a company that builds advertising software for brands. They have 0:18:13.840 --> 0:18:17.040 something to do with the guy from Deadpool and UM, Mark, 0:18:17.080 --> 0:18:20.119 I was reading your on your blog. There is a 0:18:20.200 --> 0:18:24.119 story about UM. I think Melissa Yapp wrote a story 0:18:24.359 --> 0:18:28.640 about UM. The fact that you can recession proof your 0:18:28.720 --> 0:18:31.920 streaming business by offering ads. We know that, UM, We've 0:18:31.960 --> 0:18:34.399 already seen that from Hulu and now we're expecting to 0:18:34.440 --> 0:18:37.760 see it from Netflix. Uh does it not drive away? 0:18:37.800 --> 0:18:42.880 Do do consumers not care about ads. Um, I think 0:18:43.080 --> 0:18:49.280 consumers have demonstrated that they are willing to basically exchange 0:18:49.760 --> 0:18:52.880 viewing of ads for a lower price. And so if 0:18:52.920 --> 0:18:55.680 you look at Hulu, who you mentioned as an example, 0:18:55.880 --> 0:18:58.840 I mean it's only cluss I think two dollars to 0:18:59.240 --> 0:19:02.760 avoid advertising on Hulu and to take greater on that, 0:19:02.840 --> 0:19:06.000 meaning the number of people who elect that option is actually, 0:19:06.600 --> 0:19:08.600 you know, less than half of the consumers. I think 0:19:08.600 --> 0:19:10.840 it is as low as like about. So I think 0:19:10.880 --> 0:19:13.880 consumers have said, you know that that's a really good 0:19:13.920 --> 0:19:15.640 trade off. But then you know, you want to add 0:19:15.680 --> 0:19:18.040 to the entertaining, which is what you know Ryan is 0:19:18.080 --> 0:19:21.040 all about as part of mountains. So that's that's that's 0:19:21.040 --> 0:19:25.280 an important part of it too. So Mark, I mean 0:19:25.320 --> 0:19:27.240 I'm looking at some of these media names and where 0:19:27.240 --> 0:19:29.920 the stocks are just getting crushed along with everything else. Here. 0:19:30.200 --> 0:19:32.480 One of the challenges, I guess Mark, is kind of 0:19:32.560 --> 0:19:35.119 how is this whole streaming business gonna shake out? I 0:19:35.119 --> 0:19:38.320 mean even our friends and Netflix stocks down six on 0:19:38.359 --> 0:19:41.080 a trailing twelve month basis. What's the how how do 0:19:41.080 --> 0:19:44.119 you think investors are thinking about just the streaming business? 0:19:44.240 --> 0:19:48.560 Is it a good business? Um? I think it's an 0:19:48.560 --> 0:19:51.160 next on business, and you know, the thing that's interesting 0:19:51.280 --> 0:19:55.760 right now is it's really started to stabilize. Obviously, Netflix 0:19:55.840 --> 0:20:00.159 and Hulu kind of pioneered streaming itself, and then you 0:20:00.320 --> 0:20:04.520 saw this kind of steady set of companies enter the business, 0:20:04.560 --> 0:20:07.920 and that created uncertainty in terms of market share. Who's 0:20:07.920 --> 0:20:11.120 gonna you know, what services are different consumers gonna sign 0:20:11.240 --> 0:20:15.240 up for. At this point, especially in the US, every 0:20:15.359 --> 0:20:17.639 service that you're going to have available to you is 0:20:17.760 --> 0:20:22.240 essentially out there. Disney Plus, Decock, Netflix, They're all out there, 0:20:22.280 --> 0:20:24.240 and I think there's a bit of uncertainty to see 0:20:24.240 --> 0:20:27.520 where consumers wind up in terms of what are the 0:20:27.600 --> 0:20:31.280 services that they have in their core diet of viewing, 0:20:31.680 --> 0:20:36.000 and so that uncertainty is affecting stocks. Netflix has kind 0:20:36.000 --> 0:20:38.359 of in some ways a good problem to have, but 0:20:38.440 --> 0:20:41.200 obviously when it comes to stock prices, no problem is great, 0:20:41.280 --> 0:20:44.880 which is they have so many consumers I think over 0:20:44.960 --> 0:20:48.399 seventy market share that it's just hard for them to 0:20:48.440 --> 0:20:50.560 grow that business in the US, and I think the 0:20:50.600 --> 0:20:54.160 stock has been penalized probably more than it should be 0:20:54.720 --> 0:20:57.480 for that, you know, for that kind of a problem, 0:20:57.480 --> 0:21:02.880 which is like everyone's already using our survey The interesting 0:21:02.880 --> 0:21:05.320 thing to me, Mark is that you what your business. 0:21:06.040 --> 0:21:09.920 For example of you're you have a B two B piece, right, 0:21:10.160 --> 0:21:13.600 and and you're trying to help your companies generate more 0:21:13.680 --> 0:21:15.879 leads get more demand by placing their ads in the 0:21:15.960 --> 0:21:20.600 right places. So you are equally as interested in finding 0:21:20.640 --> 0:21:23.600 out which services are doing the best to connect with 0:21:23.680 --> 0:21:26.960 customers as an investor is um to find out which 0:21:27.000 --> 0:21:28.919 one is the best bet for the for the future, 0:21:29.119 --> 0:21:31.800 for sustainability. Right, So what are you seeing as the 0:21:31.800 --> 0:21:35.639 big standout winners here for for your customers? Well, the 0:21:36.040 --> 0:21:39.119 in terms of in terms well really, let's back up 0:21:39.240 --> 0:21:41.320 just like that. The way to look at this is 0:21:41.359 --> 0:21:44.879 that the television advertising market is on to monetize. It 0:21:45.000 --> 0:21:48.800