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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Kind the Bloomberg Markets

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Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. We're waiting for door Dash

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Speaker 1: to start trading under the taker d A. S h

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Speaker 1: and also Airbnb expected a price later today above the

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Speaker 1: fifty to sixty dollar range according to Dow Jones. In

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Speaker 1: the last few minutes, let's bring in somebody who knows

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Speaker 1: a lot about I p O s and what happens

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Speaker 1: before they started trading and what happens after. Brian Lynch

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Speaker 1: has head of Business Development and Partnerships at Equity Zen,

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Speaker 1: which is a marketplace for buying pre I p O

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Speaker 1: shares for late stage VC back to companies. So exactly

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Speaker 1: what we're talking about, Brian, if one of us were

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Speaker 1: allowed to buy the shares of door Dash or get involved,

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Speaker 1: is it too late to do that not today? Yeah,

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Speaker 1: that's an interesting question, one that we've talked a lot

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Speaker 1: about here at Equities. Then we've seen the share price

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Speaker 1: go up in the private markets. There's obviously a lot

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Speaker 1: of demand um and it's pretty wild to see that

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Speaker 1: a company that raised capital just this summer at a

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Speaker 1: sixteen billion dollar valuation is now targeting a thirty eight

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Speaker 1: billion dollar valuation. There's indications that the stock could trade

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Speaker 1: or open around one one thirty. Uh So it's a

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Speaker 1: big question considering that this year has been a year

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Speaker 1: of such explosive growth, but growth that is likely not

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Speaker 1: repeatable in the long future. So it's interesting. I mean

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Speaker 1: that this I p O market's gonna be a banner

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Speaker 1: year for I p O s and given all the

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Speaker 1: uncertainty in the world, I guess that's a pleasant surprise.

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Speaker 1: What are you hearing from some of the companies you

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Speaker 1: deal with? How are they thinking about, uh, the I

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Speaker 1: P O market today? Given the world we live in. Yeah,

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Speaker 1: I think a lot of these private companies have seen

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Speaker 1: that this is a very opportune time to test the

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Speaker 1: public market. I p O s have returned over a

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Speaker 1: hundred eleven percent here to date versus sixteen or so

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Speaker 1: percent for the SMP five hundred and this current environment

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Speaker 1: where uh we have two vaccines on the way, the

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Speaker 1: election is behind us and some of that volatility and

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Speaker 1: the market has rallied to all time highs. A lot

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Speaker 1: of companies think this is kind of a prime environment

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Speaker 1: to make their public market debut, so we expect to

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Speaker 1: see more companies making these same moves, especially now that backs,

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Speaker 1: direct listings and other options are available to them as well.

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Speaker 1: So Brian Equities N is the secondary marketplace, so you

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Speaker 1: sell pre I p O shares not the minimum investment

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Speaker 1: is ten tho dollars. But retail investors can buy these shairs.

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Speaker 1: So are are you busy? Today? Is the secondary marketplace?

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Speaker 1: You know, full of people buying and selling these shairs today. Yeah,

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Speaker 1: So Equities N's marketplace has been been here than ever

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Speaker 1: over the past few quarters. We've seen records demand um

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Speaker 1: and there's a big need in the retail accredited market

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Speaker 1: to have access to these types of companies before they

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Speaker 1: go public. We've seen over the past ten years that

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Speaker 1: a lot of the growth um and return potential for

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Speaker 1: these companies has happened in the private markets given the

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Speaker 1: abundance of venture capital available. So it's really important for

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Speaker 1: investors to be able to participate in that growth to

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Speaker 1: achieve you know, successful outcomes for their investment portfolios. So, Brian,

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Speaker 1: what are the the trends here? You know, companies like

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Speaker 1: you are just you know, are kind of relatively new

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Speaker 1: phenomena where you can provide pre market trading for a

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Speaker 1: lot of these private companies here. What's been kind of

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Speaker 1: the activity level? Are people looking to get more liquidity

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Speaker 1: prior to the IPO? Is these IPOs seem to be

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Speaker 1: put off longer and longer because they don't companies don't

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Speaker 1: really need to go public in many cases. So are

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Speaker 1: you seeing increased demand for market making that you guys provide.

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Speaker 1: You're absolutely right, and we talk to shareholders day in

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Speaker 1: and day out who are looking for liquidity. A lot

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Speaker 1: of these shareholders are early employees who have been with

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Speaker 1: these companies for a long time. And for many of

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Speaker 1: these employees, the vast majority of their net worth is

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Speaker 1: tied up in the shares of the company they work for.

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Speaker 1: So from a pure portfolio diversification perspective, that's a risky

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Speaker 1: position to be in. And also these employees may be

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Speaker 1: looking to pay off loans or put a down payment

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Speaker 1: on a house, so there is that need for liquidity

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Speaker 1: pre I p O and equity sense mission is to

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Speaker 1: be able to provide that to shareholders across the spectrum

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Speaker 1: which busy or Airbnb or door does. Yeah, Brion, which

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Speaker 1: is busy or Airbnb or door does. We've seen demand

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Speaker 1: for both in the private market, um, and I think

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Speaker 1: investors both today and tomorrow in the public markets are

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Speaker 1: very excited to be able to participate. Well, Brian Lynch,

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Speaker 1: thank you so much for joining us. Really great to

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Speaker 1: chat with you here as we have door Dash about

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Speaker 1: ready to trade later today an Airbnb to mar Brian Lynch,

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Speaker 1: head of Business Development in Partnerships at Equity Zen. Again,

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Speaker 1: indication for door Dash just an extraordinary move off of

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Speaker 1: the uh, you know, the trading range that they had

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Speaker 1: set prior to the offering here. So again the demand

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Speaker 1: indicating that demand very very strong there for door Dash.

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Speaker 1: So we'll see how that trades today. Bodes well for Airbnb,

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Speaker 1: which looks to price after the close at tonight. We've

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Speaker 1: just had an auction and we have a ten year

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Speaker 1: yield at above ninety four basis points. We also have

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Speaker 1: lots of Federal Reserve things to talk about with our

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Speaker 1: next guest, who is Jim Vogel of f H and

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Speaker 1: Financial and Jim, welcome from Memphis, Tennessee today to talk

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Speaker 1: to us. But I do have to start Jim with this.

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Speaker 1: This I p o that we're waiting on trading for

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Speaker 1: a dash, door Dash. It's up to one seventeen now, Jim,

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Speaker 1: On days like this, what do you see around you

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Speaker 1: in the marketplace? I mean, are people even paying attention

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Speaker 1: to treasuries? Yes, we're always paying attention to treasuries. There's

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Speaker 1: good flows this morning, but we're we're not moving in

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Speaker 1: multiple basis points or percentage points for every minute right now,

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Speaker 1: the way door dash might be so, uh, Jim. Jamie

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Speaker 1: Diamonds have some comments recently where he said he would

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Speaker 1: not touch treasuries with a ten foot pole. Do you

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Speaker 1: agree with Mr Diamond? Well, a lot of people do.

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Speaker 1: But those same people that agree with him also own

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Speaker 1: a lot of treasuries. Okay, it's not ironic that, uh,

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Speaker 1: Jamie diamond says that when out of a path a

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Speaker 1: trillion dollar investment portfolio that is in treasuries at his

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Speaker 1: own institution. So why would he say that? I mean,

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Speaker 1: is he trying to, you know, warn people about what's coming.

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Speaker 1: Is he complaining that, you know, net interest margins aren't

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Speaker 1: all outgrade at as buying? What what what is the

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Speaker 1: impetus of that? You know what? We've to a degree

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Speaker 1: people are still in shock that rates have gone this

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Speaker 1: low and stayed this low. We were supposed to be

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Speaker 1: seeing the Fed taking rates up to three and a

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Speaker 1: half percent perhaps this year. We were looking forward to

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Speaker 1: a new administration, more stimulus, a different economy, and instead

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Speaker 1: rates are extraordinarily low. So I took his comments to

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Speaker 1: just simply mean, what's going on? This cannot be right?

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Speaker 1: But actually what what is not right is the enormous

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Speaker 1: amount of savings that are in bank institutions right now. So, Jim,

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Speaker 1: one of the things that continues to be a question

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Speaker 1: mark for all investors, but certainly in the treasury market,

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Speaker 1: is what kind of fiscal stimulus are we going to

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Speaker 1: get out of Washington if any um? And it looks

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Speaker 1: like Secretary Unition is inserted the White House back into

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Speaker 1: the discussion. May maybe that's good. New is what are

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Speaker 1: you kind of kind of fearing into your calculus here? Well, unfortunately,

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Speaker 1: with all the things that are going on around the

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Speaker 1: country in terms of possible or excuse me, very real

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Speaker 1: and potentially worse pandemic slowdowns. The size of the stimulus

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Speaker 1: at nine billion or six billion may have been adequate

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Speaker 1: this summer, it's going to be inadequate for the first

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Speaker 1: quarter of one at the rate we're going right now.

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Speaker 1: So that's part one, right, and part two thanks. Part

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Speaker 1: two is that, uh, the idea is the idea of

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Speaker 1: targeted stimulus without broader moves really doesn't work either because

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Speaker 1: by the time you can get targeted stimulus out, um,

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Speaker 1: it's going to be early February and it's not going

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Speaker 1: to do all that much. What does work are cash

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Speaker 1: payments and cash and people's bank accounts in January. It's

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Speaker 1: unlikely that we're going to get there based on the

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Speaker 1: situation as of this morning, was entering, CNN is reporting

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Speaker 1: that ten thou American restaurants will likely close in the

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Speaker 1: next three weeks. So, boy, if I'm a lawmaker down

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Speaker 1: in Washington and that that would get my attention here.

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Speaker 1: What do you think, um, Jim, that the FED can

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Speaker 1: do that? It seems like the FED has done pretty

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Speaker 1: much everything that it can do. Do you expect anything else?

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Speaker 1: Or just kind of steady as she goes here? Um,

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Speaker 1: steady as it goes The one thing I think after

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Speaker 1: everything we've seen in the last couple of weeks, is

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Speaker 1: we should anticipate next week's dot plot looks almost exactly

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Speaker 1: like Septembers. That's interesting. We have had some warnings about

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Speaker 1: inflation taking off. Jim, what are your thoughts on that? Uh?

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Speaker 1: That if the Fed staff is taking a good bit

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Speaker 1: different look at inflation, they're very concerned that the core

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Speaker 1: will stay low. They're measuring inflation relative to where it

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Speaker 1: is right now. The people talking about higher inflation next

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Speaker 1: year are frequently going doing a year over year comparison,

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Speaker 1: which absolutely is going to be higher after inflation fell

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Speaker 1: in the first half of last year. Excuse me of

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Speaker 1: this year? All right? So, Jim, thirty seconds, where do

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Speaker 1: you see value anywhere along the yield curve here? Given

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Speaker 1: what we've we see in the marketplace, and given what

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Speaker 1: we hear from FED Chairman Pal about his view of

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Speaker 1: the interestring environment, the the entire uh pretty much zero

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Speaker 1: to five year part of the curve is fair value

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Speaker 1: at this point. The five years a little steep relative

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Speaker 1: to FED policy, which right now means that the best

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Speaker 1: values are in seven years. We talked about that a lot,

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Speaker 1: but we reran all of our numbers and analytics this

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Speaker 1: morning and closed above sixty five basis points on seven

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Speaker 1: year treasuries um. They're the best risk adjusted value out

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Speaker 1: there right now. Hey, Jim, thanks so much for joining us.

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Speaker 1: As always, Jim Vogel, interest rate strategist for f H

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Speaker 1: and UH Financial. And it's interesting to try to find

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Speaker 1: some value VANNIE in the credit markets here giving out

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Speaker 1: tight a lot of things are trading and again given

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Speaker 1: where FET chairman Palace says he expects rates to be.

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Speaker 1: And you just heard Jim saying, you know how much

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Speaker 1: savings there are in bank accounts, It's really really fascinating.

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Speaker 1: If you wanted to be safe and uh, you know

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Speaker 1: you don't have that much choice, you may as well

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Speaker 1: leave it in the bank account exactly right. So just

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Speaker 1: looking at our good friends at door dash gets your

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Speaker 1: price quote again still not open bid ask one seventy

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Speaker 1: to one seventy five. Well. Tom Keane often talks about

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Speaker 1: the courage to be in the market and with an

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Speaker 1: equity indices at or near all time highs, that is

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Speaker 1: certainly an app discussion point right here. Particularly we think

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Speaker 1: about John Lynch, chief investment officer for Co America Asset Management,

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Speaker 1: joins the now, John, I'd love to step back thirty feet.

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Speaker 1: We've had a Despite all the craziness of this year,

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Speaker 1: equity markets, risk markets in general have done, you know,

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Speaker 1: surprisingly well. What is your view of the equity markets

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Speaker 1: right here, right now, Hey, Paul, good morning. Yes, the

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Speaker 1: rally has been unbelievable since uh last February, last March,

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Speaker 1: but too specifically to your question right now, I think

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Speaker 1: we're five or six percent overvalued. Um. You know, I

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Speaker 1: always want to make sure of the math works when

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Speaker 1: making forecasts, and I think the S and P five hundred,

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Speaker 1: for example, can do earnings of about a hundred and

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Speaker 1: thirty five dollars this year, and really you're starting to

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Speaker 1: stretch multiples past thirty my estimation. I have to ask

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Speaker 1: you about doortosh. We are now reporting that it's indicated

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Speaker 1: to open and get this you you probably aren't even

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Speaker 1: up to date yourself, even if you've been watching it.

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Speaker 1: One to one hundred sixty dollars a share. It's been

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Speaker 1: jumping in five dollar increments, which is more than typical ibeos. Yes,

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Speaker 1: there's a morning, Vonnie. I think there's a couple of

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Speaker 1: things investors have to keep in mind. Um, you know,

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Speaker 1: while I believe we might be five or six percent

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Speaker 1: overvalued in the near term, Uh, there are a variety

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Speaker 1: of areas that show the market is not overvalued. We

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Speaker 1: don't necessarily see uh, you know, fund flows into equities.

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Speaker 1: I don't see significant or alarming M and A activity.

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Speaker 1: But one area that could be a red flag would

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Speaker 1: be the I p O market. And Uh, as you

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Speaker 1: suggested this morning, Um, it's just amazing the pre market

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Speaker 1: bids or the pre opening bids on on that I

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Speaker 1: p O. Well, just as in the last two minutes,

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Speaker 1: sixty five is a bit spread there on the Bloomberg terminal. Um.

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Speaker 1: You know, I just loved John to get your thoughts here.

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Speaker 1: Just about one of the bigger discussions that we've heard

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Speaker 1: over the last several months is kind of okay. I

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Speaker 1: get the bullish column the market. We've got a lot

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Speaker 1: of pent up de man in the economy. Vaccines are

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Speaker 1: are coming, interest rates are oh and I'm likely to

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Speaker 1: stay a little. I've heard all that. Now it's a

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Speaker 1: question of how do I want to play it. Do

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Speaker 1: I want to stay with the tried and true, great

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Speaker 1: top line growth stories that have propelled this market really

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Speaker 1: since a financial crisis or do I rotate into some

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Speaker 1: of the more cicklical names, maybe even some of the

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Speaker 1: smaller cat names. How how do you guys think thinking

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Speaker 1: about that America, Yeah, we're very much in Look, we

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Speaker 1: made sure we included a chart of the equally weighted

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Speaker 1: s and P five relative to the cap weighted index.

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Speaker 1: And I think one way investors can view it is

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Speaker 1: the Big five versus the other four. And the Big

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Speaker 1: five was able to grow this year on a combination

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Speaker 1: of PE expansion, valuation expansion, as well as profits. The

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Speaker 1: other four didn't really have profits uh in their back

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Speaker 1: pocket if you will, And uh, it was very much

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Speaker 1: a valuation game. But as we do the reopening rotation trade, uh,

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Speaker 1: you know, I still think we're gonna have a come

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Speaker 1: up and in the first quarter UM with targeted restrictions

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Speaker 1: and lower than anticipated growth, but nonetheless spreading that out,

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Speaker 1: you know, and you make you make a point about rates.

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Speaker 1: The FED has said one thing, right, but look at

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Speaker 1: look at what break evens are doing. Look what the

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Speaker 1: ten years doing, even though we're seeing uh, increased cases,

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Speaker 1: increase hospitalizations and unfortunately increased deaths. So from that standpoint, UM,

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Speaker 1: I think what you're going to see as we as

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Speaker 1: the reopening fundamental, if you will, the trend gathers roots,

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Speaker 1: say in the end of the first quarter, early second quarter.

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Speaker 1: It's very much a value game. It's very much a industrials, energy,

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Speaker 1: the nancials, materials. The reopening trade I think will be

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Speaker 1: will be very important, and I think that will be

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Speaker 1: a healthy development because as you all know, growth is

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Speaker 1: dramatically outperformed value when the FED was essentially just printing money.

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Speaker 1: But now that we are really transitioning from monetary leadership,

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Speaker 1: and if we can get through this nine billion dollar bickering,

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Speaker 1: indeed see right now, it will be more of a

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Speaker 1: fiscal leadership, if not fiscal dependency. But that either way,

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Speaker 1: that infrastructure aspect of that should bode very well to

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Speaker 1: the value and the industrials and some of the other

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Speaker 1: sectors that I just highlighted. Speaking of reopening, John, you're

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Speaker 1: down there in beautiful Charlotte, North Carolina. Tell us how

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Speaker 1: the economy is and have you seen an influx of

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Speaker 1: people from larger cities perhaps, or you know, have the

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Speaker 1: outskirts seen that. You know, it's amazing. The housing market

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Speaker 1: has been much like uh, you know, the rest of

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Speaker 1: the nation. But certainly you'll see in the in the

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Speaker 1: warmer climates like the Carolina is uh, you know, very

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Speaker 1: very strong housing market. Uh, it's not It's not unusual

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Speaker 1: to see multiple bids in a in a single afternoon. Uh.

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Speaker 1: So the housing market is moving very quickly. And I

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Speaker 1: think you know one thing that corporate among many things

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Speaker 1: that corporations have learned in is that this remote work

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Speaker 1: you know, has teeth, has traction. And to the degree

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Speaker 1: the warmer climates uh will play into that, I think

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Speaker 1: that will continue to bode well for the southeast and

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Speaker 1: the southwest. Hey, John, just just real quickly the the

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Speaker 1: the presidential election change your outlook or kind of how

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Speaker 1: are you viewing that? Yes, well, we were looking for

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Speaker 1: either way, we were looking for some degree of infrastructure.

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Speaker 1: I understand fully that we still need to have relief.

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Speaker 1: And I like to make the distinction between a relief

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Speaker 1: package and an infrastructure package, because a relief package really

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Speaker 1: is income replacement, right, and when you see the transfer payments,

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Speaker 1: when you see personal incomes not largely affected in spite

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Speaker 1: of all that's happened, right with ten or fifteen million

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Speaker 1: fewer people working, that income replacement was a necessity, but

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Speaker 1: I think for the reopening rotation um really to become

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Speaker 1: more of an economic fundamental grower, you need to see infrastructure.

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Speaker 1: And I think the team that Boden has assembled, particularly

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Speaker 1: with jan at Yale and the Treasury, the Arkansians, and

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Speaker 1: they're gonna be very much focused on the multiplier of infrastructure. Well, John,

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Speaker 1: we certainly hope that we will speak to you again

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Speaker 1: before all of that has put in place. John Lynch's

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Speaker 1: CEO of America Asset Management, based in beautiful Charlotte, North Carolina.

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Speaker 1: All Right, So I'm running some errands yesterday and I'm

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Speaker 1: at the UPS store and I see the UPS guy

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Speaker 1: out front with the truck loading and unloading boxes. But

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Speaker 1: it wasn't the brown UPS truck. It was a U

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Speaker 1: Haul truck. And I was chatting with the guy and

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Speaker 1: he says, yeah, they have so much demand that they

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Speaker 1: ran out of trucks, and so they're out there renting

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Speaker 1: U haul trucks AVIS trucks. And I said, how often

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Speaker 1: has that happen? He says, well, it happens a lot

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Speaker 1: during the peak holiday season. But he said he's been

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Speaker 1: driving a U haul truck since March because the plan

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Speaker 1: has just been incredible. So I said, I have to

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Speaker 1: talk to Lee Classical. Lee Classicals, our senior transportation ANIMs

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Speaker 1: for Bloomberg Intelligence. Lee, Um, you know what's going on

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Speaker 1: out there? Are the boxes getting delivered? Are the FedEx

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Speaker 1: and UPS guys? Are they able to keep up? Uh?

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Speaker 1: You know it is a challenge, and you know services definitely, UM,

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Speaker 1: you know, suffering a little bit. But I would say

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Speaker 1: the industries and doing a really good job. The industry

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Speaker 1: is facing a prolonged peak season. I mean typically have

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Speaker 1: peak a little before Thanksgiving through Christmas, but because of

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Speaker 1: the pandemic and stay at home orders and people just

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Speaker 1: you know, buying a lot more stuff online. Uh, there's

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Speaker 1: been a prolonged peak really since the second quarter. Uh.

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Speaker 1: And then UPS and FedEx have have done a really

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Speaker 1: good job at managing their their networks to handle that

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Speaker 1: because you know, those home deliveries tend to have um,

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Speaker 1: a smaller margin and a typical B two B delivery. Uh.

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Speaker 1: So what they've been doing is they've been increasing prices.

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Speaker 1: They've been a search charges. Uh, and some of the

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Speaker 1: investments that they've made over the years that you know,

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Speaker 1: the market is probably questioned because they had some accelerated

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Speaker 1: CAPEX spend really seems to be paying off, and a

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Speaker 1: lot of that is through automation and technology. Uh, and

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Speaker 1: it's providing some relief when the network is jammed. And

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Speaker 1: also both that xt ups are offering a weekend deliveries,

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Speaker 1: something they really didn't do for a long time, and

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Speaker 1: just to be more competitive with that second day delivery

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Speaker 1: that we all expect given you know what Amazon does,

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Speaker 1: They're able to do that now and deliver you know,

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Speaker 1: your your your whatever you're ordering online on a Saturday

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Speaker 1: or Sunday, and it kind of smooths out their network. Solely,

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Speaker 1: will this be a leading indicator for what happens to

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Speaker 1: our behavior post pandemic? Have that x cpsd HL and

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Speaker 1: so on. Have they started to try to buy more

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Speaker 1: for their fleet or are they continuing to n from

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Speaker 1: the likes of view Hall and on all these other

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Speaker 1: places that Paul saw evidence of. Well, I think that

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Speaker 1: they're doing both because you know, you don't want to

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Speaker 1: build the church for Easter service, so uh, you know

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Speaker 1: what they're doing is, you know, they're probably investing more

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Speaker 1: in equipment, but they're also you know, not necessarily jumping

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Speaker 1: in head first because the reality is that the pandemic

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Speaker 1: is probably pushed forward e commerce penetration by three or

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Speaker 1: five years. UM. So there is going to be some

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Speaker 1: secular changes once we get back to a more quote

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Speaker 1: unquote normalized lifestyle. UM. But you know, more people are,

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Speaker 1: you know, um, buying things online that they might have

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Speaker 1: not prior to the pandemic. UM. And you have that

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Speaker 1: coupled with the fact that the like I said earlier,

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Speaker 1: the industry is operating six or seven days a week. UM.

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Speaker 1: There have a lot more in terms of automation. We're

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Speaker 1: able to handle more packages. And the good news for

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Speaker 1: FedEx gups is that, you know, as they do more

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Speaker 1: home deliveries at increases their density. And as I mentioned earlier,

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Speaker 1: those margins tend to be a little lighter than to

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Speaker 1: be too be as you add density, that does improve

383
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Speaker 1: the margin. UM. So you know, you could see some

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Speaker 1: some decent margin expansion next year as things normalize in

385
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Speaker 1: their in FedEx's ground business or ups is that domestic business.

386
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Speaker 1: So I'm looking at the stocks in here today performance

387
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Speaker 1: fed X up two week high today, Uh, ups up

388
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Speaker 1: about it looks like I missed my trade here. What's

389
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Speaker 1: the outlook for these names over the next couple of years. Well,

390
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Speaker 1: I'll tell you, you know, there's there's a lot of

391
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Speaker 1: folks out there that are extremely bullish on the south

392
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Speaker 1: side on on fed X uh and and and maybe

393
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Speaker 1: a little lux or so on. Ups. A lot of

394
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Speaker 1: people have jumped on the bandwagon for for fed X recently.

395
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Speaker 1: You know, we we've been relatively optimistic on the name

396
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Speaker 1: for a long time. Um. You know, what I would

397
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Speaker 1: say is that we're probably uh way too early. But

398
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Speaker 1: you know what the name is starting to do is um,

399
00:23:02,480 --> 00:23:05,159
Speaker 1: they're just really the investments that they've made in the

400
00:23:05,240 --> 00:23:08,200
Speaker 1: past are really starting to pay off because of that

401
00:23:08,320 --> 00:23:11,119
Speaker 1: new density that they're getting and also the you know,

402
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Speaker 1: the unsung hero and what we don't know yet it's

403
00:23:14,280 --> 00:23:16,399
Speaker 1: how good is the T and T acquisition that they

404
00:23:16,440 --> 00:23:18,320
Speaker 1: made a couple of years ago going to be in

405
00:23:18,400 --> 00:23:21,159
Speaker 1: a post pandemic world. You know, we think that the

406
00:23:21,280 --> 00:23:24,680
Speaker 1: integration benefits that they've been doing and getting really haven't

407
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Speaker 1: come to the surface because of the backdrop of you know,

408
00:23:28,000 --> 00:23:31,280
Speaker 1: we be two b business uh in Europe. But as

409
00:23:31,320 --> 00:23:34,399
Speaker 1: that comes back, you know, we do believe that it

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Speaker 1: will be a not only a competitive advantage for FedEx

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Speaker 1: to get more freight onto its network. That will also

412
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Speaker 1: be able to really improve the T and T business,

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Speaker 1: which was kind of a lagger within the global industry solely.

414
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Speaker 1: What's the outlook for the likes of a door Dash then?

415
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Speaker 1: I mean, I know that that's not exactly the type

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Speaker 1: of company that you you cover, but there is this

417
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Speaker 1: sort of similar relationship. I mean, if if this is,

418
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Speaker 1: as you say, easter time in religion, then then does

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Speaker 1: that mean that a door dash will also see a

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Speaker 1: drop off when this goes away? I mean, I don't

421
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Speaker 1: cover the name, but I would just guess that people's

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Speaker 1: buying habits will change. You know, you will have people

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Speaker 1: that will, uh, you know, continue to buy from door dash,

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Speaker 1: but maybe instead of doing it five days a week,

425
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Speaker 1: they're only doing it once a week. So um, you know,

426
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Speaker 1: I know, personally speaking and a totally speaking, I can't

427
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Speaker 1: wait to go to a restaurant again. Um you know,

428
00:24:27,359 --> 00:24:31,080
Speaker 1: I I really miss, you know, having a a well

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Speaker 1: cooked meal. H Not to say that I don't cook

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Speaker 1: well myself, but like it's always better out with friends.

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Speaker 1: So um, you know, they definitely will have somewhat of

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Speaker 1: an impact. Hatley. One thing is that I've noticed really

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Speaker 1: this Christmas season is how many Amazon Prime trucks there

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Speaker 1: are on the road. It seems like they're just everywhere.

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Speaker 1: What does that mean for the ups is and the

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Speaker 1: Fedexes of the world. Yeah, so you know what Amamon's

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Speaker 1: doing and argue it is something that Walmart UM, uh

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Speaker 1: you know, in the sixty seventies and eighties, you know,

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Speaker 1: they built out their own transportation network. Walmart operates one

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Speaker 1: of the largest truckload fleets in America, you know, and

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Speaker 1: it's a kind of dwarfs some of the publicly traded

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Speaker 1: UM truckload fleets that that we cover in terms of size. So,

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Speaker 1: you know what, what what Amazon is trying to do

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Speaker 1: is they're trying to control their their purchase transportation costs

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Speaker 1: and they're doing that by outsourcing with UM you know, uh,

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Speaker 1: with contractors, exclusive contractors that that just worked for Amazon,

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00:25:30,080 --> 00:25:33,600
Speaker 1: and you know, it is somewhat of a similar model

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00:25:33,680 --> 00:25:37,280
Speaker 1: that athetics does. It means FedEx ground employees are or

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00:25:37,960 --> 00:25:42,560
Speaker 1: FedEx ground UM drivers and delivery people are un employees

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Speaker 1: of FedEx. They're they're independent contractors. So it's not a

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Speaker 1: new model. Uh, you know, they will UM. Amazon wants

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Speaker 1: to control more of their supply chain. It will still

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Speaker 1: be a big buyer transportation for ups that X not

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Speaker 1: so much. It's it's a lot bigger part of ups

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Speaker 1: and than it is FedEx Um. But you know, they're

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Speaker 1: just looking to diversify and control their own costs, and

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Speaker 1: they're doing that with careers and they're doing that with

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Speaker 1: an air fleet as well. All right, Slee, thank you

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Speaker 1: so much for all of the intelligence literally comes from

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Speaker 1: Bloomberg Intelligence. He's their senior transport, logistics and shippings analysts

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Speaker 1: and we appreciate it. Thanks for listening to Bloomberg Markets podcast.

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Speaker 1: You can subscribe and listen to interviews at Apple Podcasts

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00:26:24,080 --> 00:26:27,640
Speaker 1: or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm

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00:26:27,680 --> 00:26:30,359
Speaker 1: on Twitter at Bonnie Quinn. And Paul Sweeney I'm on

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Speaker 1: Twitter at pt Sweeney. Before the podcast, you can always

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Speaker 1: catch us worldwide at Bloomberg Radio