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Speaker 2: Bloomberg News is now reporting that the board has forced

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Speaker 2: out Intel's CEO Gelsinger. So definitely some concerns there at

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Speaker 2: Intel as it tries to play catch up on the

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Speaker 2: AI game against the videos of the world. Man Deep

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Speaker 2: Sing joins his senior technology Industrynals for Bloomberg Intelligence joins

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Speaker 2: us here on our Bloomberg Interactor Brokers studio. So again, Mandy,

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Speaker 2: by the reporting we're seeing out of Bloomberg News now

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Speaker 2: was that it was kind of the board forcing at

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Speaker 2: mister Gelsinger. And that kind of makes sense because you know,

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Speaker 2: as you mentioned earlier, board concern, investor concern about the

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Speaker 2: pace of which Intel was trying to, you know, really

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Speaker 2: become a bigger player in AI. What do you think

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Speaker 2: is going on.

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Speaker 3: And the overall strategy for turnaround like this, I mean,

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Speaker 3: we know turnarounds are rare in tech, and in this case,

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Speaker 3: I think the doubling down on the foundry side was

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Speaker 3: a big mistake in hindsight, I would be very surprised

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Speaker 3: if whoever their point, whether it's internal or external, really

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Speaker 3: wants to focus on the foundry side as opposed to

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Speaker 3: their core chip business, which is where they still generate

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Speaker 3: bulk of their operating free cash flow.

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Speaker 4: And you know, when you look at.

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Speaker 3: The PC business, it's a thirty billion dollar business, generates

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Speaker 3: ten billion dollars in free cash flow, and it's still there.

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Speaker 3: I mean, they're not gaining any share, but there's still

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Speaker 3: the dominant force when it comes to the client PC

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Speaker 3: desktop business, and I think that's the path to turn

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Speaker 3: around this company.

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Speaker 5: Were you surprised by this in that this happened before

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Speaker 5: there was a successor actually announced, considering that it meaning that,

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Speaker 5: like what's going to happen in the next, say, two

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Speaker 5: months while they were looking for a successor, that would

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Speaker 5: have meant that Pat Gelsinger had to leave.

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Speaker 3: I mean, this reminds me a little bit about Microsoft,

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Speaker 3: the way Steve Balmer left and the way Satya Nadella

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Speaker 3: was appointed. I wouldn't be surprised if one of the

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Speaker 3: co CEOs, Michelle Johnson, like she ends up being elevated

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Speaker 3: to the CEO. But when I look at the turnaround prospects,

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Speaker 3: I think this is a much harder turnaround than a

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Speaker 3: Microsoft simply because you've got a player in Nvidia that's

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Speaker 3: really taking share on the server side and then TSMC

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Speaker 3: on the foundry side. So on both the fronts, Intel

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Speaker 3: is really losing share. The only front where they still have,

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Speaker 3: you know, steady share is the client PC business, And

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Speaker 3: that's why I think breaking up the company is probably

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Speaker 3: the likely scenario here. I would be surprised if anyone

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Speaker 3: tries to turn this around as is.

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Speaker 2: So, I mean, it's just an attractive job for sir,

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Speaker 2: an external person. Let's say I'm a senior person in

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Speaker 2: n vidio, I can get the big chair at Intel.

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Speaker 6: Is that attractive?

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Speaker 3: It could be, but it sounds more like a Pe

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Speaker 3: playbook here. You know, look at the entity as a whole,

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Speaker 3: figure out the strategic options, lever up and look the

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Speaker 3: foundry business outside of Intel may actually end up doing well.

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Speaker 3: And the reason I say that is right now, no

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Speaker 3: one from an Amazon or a Microsoft, or Google or

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Speaker 3: Nvidia wants to use Intel foundry because they know Intel

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Speaker 3: is a competitor on the chip design side. Well, once

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Speaker 3: you take out the company and you know it's an

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Speaker 3: independent entity, everyone wants to have some onshore manufacturing of chips.

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Speaker 3: That's what the government wants. So these companies may be

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Speaker 3: forced and with the incoming administration, I won't be surprised

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Speaker 3: if they say, Okay, you guys have to use some

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Speaker 3: of the foundry options.

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Speaker 4: Within the US.

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Speaker 3: At TSMC or Samsung don't have that kind of capacity

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Speaker 3: that Intel has within the US.

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Speaker 5: So would the pitch be to spin off the foundry

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Speaker 5: business kind of thing and then keep the chips and

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Speaker 5: the AI chips.

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Speaker 3: Yeah, I mean, look, the foundry business is an eighteen

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Speaker 3: billion dollar revenue business, although most of it is Intel

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Speaker 3: outsourcing their business and counting as revenue, so it's not

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Speaker 3: external foundry revenue. But it's negative gross margins. So the

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Speaker 3: core PC business is about a forty to forty five

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Speaker 3: percent gross margin. The foundry business is negative gross margin,

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Speaker 3: and they're spending twenty five billion dollars a year on

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Speaker 3: capex just to buy the machines to keep up with

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Speaker 3: the advancement in nodes.

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Speaker 7: Why do I have a business that has negative gross margins?

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Speaker 3: Because it's it's like Intel is the vertical integrated player

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Speaker 3: in chip design and manufacturing, so they do it all

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Speaker 3: in house, and for a while, that's why Intel's gross

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Speaker 3: margins were the best because they were doing everything in house.

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Speaker 3: But the moment they missed out on that node advancement

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Speaker 3: where TSMC leap rocked against them, that's when it all

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Speaker 3: started to go wrong.

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Speaker 5: Amazing stuff, all right, Andy, thanks a lot, really appreciate it.

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Speaker 5: We'll clearly be talking to you every day on this.

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Speaker 8: For a while.

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Speaker 5: Mandu Seing Bloomberg Intelligence senior technology analyst joining us on

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Speaker 5: Intel and reportedly Pat Gelsinger being asked to leave by

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Speaker 5: the board.

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Speaker 1: thirty Alex.

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Speaker 8: Stelier alongside Paul Sweeney. This is the Bloomberg Intelligence Radio.

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Speaker 5: We bring you all the top news, business, economic and

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Speaker 5: finance through our lens of our Bloomberg Intelligence folks. They

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Speaker 5: cover two thousand companies and one hundred and thirty industries

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Speaker 5: all around the world. All right, let's get to one

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Speaker 5: of them right now, super Micro devices. Super Micro, I

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Speaker 5: should say, up solidly.

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Speaker 8: At some point it was up.

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Speaker 5: Like thirty percent today, up twenty two percent now at

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Speaker 5: this point, the super Micro reviews finds no evidence of

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Speaker 5: fraud and the CFO was replaced. Let's get more on this.

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Speaker 5: Ujin hoo boom. Bring intelligence and your technology analysts, joins us. Now,

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Speaker 5: remind us what the problem is that super Micro is

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Speaker 5: trying to create too correct.

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Speaker 10: Yeah, hey, Alex, thanks for having me on a couple

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Speaker 10: couple of things. There was a short sell of report

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Speaker 10: back in August citing that there was some fraud you know,

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Speaker 10: with internally, and essentially because of that, there was an

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Speaker 10: internal investigation and they delighted their ten K and ten

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Speaker 10: Q filings. And what super Micro is essentially saying their

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Speaker 10: internal investigation has found nothing or no evidence of fraud.

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Speaker 10: But the ten K and ten Q filing still have

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Speaker 10: yet to be filed.

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Speaker 2: But it's not every day that a big four accounting

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Speaker 2: firm does what happened here basically says, you know, they

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Speaker 2: really can't rely upon the management team and they and

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Speaker 2: they just walk away from an account that doesn't happen.

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Speaker 10: Yeah, problem, No, Paul, I think between your lifetime and

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Speaker 10: my lifetime in the financial industry, probably four or five times, right, So, yeah,

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Speaker 10: it doesn't happen. It doesn't happen. They did find an

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Speaker 10: alternative BDO USA, and you know, quite quite frankly, with

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Speaker 10: the special investigation you know, being completed without evidence of fraud,

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Speaker 10: it actually almost gives them a BDO a safety net

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Speaker 10: to actually expedite the ten Q and ten K filing

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Speaker 10: sign off in my opinion.

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Speaker 5: So does this put all the questions to bed at

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Speaker 5: this point?

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Speaker 10: No, not necessarily, quite frankly. I mean, let's see what

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Speaker 10: BDO says. I do think they're going to try to

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Speaker 10: push along the filings as quickly as possible, possibly by

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Speaker 10: year end. You know, the deadline is sometime in late February.

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Speaker 10: But you know, I do think they'll try to push

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Speaker 10: it along now, I will tell you.

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Speaker 3: Uh.

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Speaker 10: The other question is is that was there so much

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Speaker 10: reputation damaged because of this? Did they lose business? And

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Speaker 10: if you think about where the shares are today, it's

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Speaker 10: still well off the peaks.

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Speaker 2: So assuming they can put this issue behind them, what

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Speaker 2: is the story for this company here, super Micro News,

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Speaker 2: how do you position it within your tech stocks?

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Speaker 4: Yeah?

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Speaker 10: Look, super Micro has been one of the hottest companies

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Speaker 10: within the hardware industry. They were on the forefront or

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Speaker 10: the poster child of AI servers, and you've seen a

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Speaker 10: rapid rise in sales, going from a billion dollars or

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Speaker 10: three billion dollars in annual sales, and they were on

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Speaker 10: track to about twenty six to thirty billion dollars in

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Speaker 10: annual sales in fiscal twenty twenty five. Right, and this

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Speaker 10: is over a span of four years. Now, they didn't

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Speaker 10: retract a guidance, but they didn't affirm guidance either. So

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Speaker 10: the question is is that, look, what is the real

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Speaker 10: sales going into fiscal twenty five. We do have a

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Speaker 10: scenarios scenario analysis that in a draconian way, it's going

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Speaker 10: to be sixteen billion dollars in sales.

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Speaker 9: Right.

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Speaker 10: That's far off of the twenty six on the low end,

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Speaker 10: but you know, it's still sixteen billion dollars in sales

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Speaker 10: that super Micro could deliver on the AI story alone.

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Speaker 5: And this is AI netlike hardware right, versus AI chips

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Speaker 5: for example from in video, right, So a competitor would

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Speaker 5: be like Dell, right, like an.

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Speaker 8: AI server play exactly.

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Speaker 5: So if I was a customer and I was like,

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Speaker 5: you know what, super Micro, I need to go somewhere else.

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Speaker 8: Is the only other option Dell? Or are there other

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Speaker 8: players out there?

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Speaker 3: Oh?

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Speaker 10: Yeah, Look, if we go back to last May at

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Speaker 10: Video's conference, there were a host of AI server companies

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Speaker 10: that were willing to partner with Dell, I mean, with Nvidia.

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Speaker 10: So super Micro is not the only game in town.

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Speaker 9: Now.

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Speaker 10: There is Dell nor Hpe. There are some Taiwanese ODMs

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Speaker 10: that are more than happy to assemble AI servers out there.

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Speaker 10: So we've seen the because of the growing competitive pressure,

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Speaker 10: we've seen margins compress as a result for the industry.

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Speaker 2: So they sacrifice. It feels like this. How does the

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Speaker 2: street feel about the rest of the management team, the

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Speaker 2: leadership as well as the board.

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Speaker 10: Well, look, the main issue in my mind was not

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Speaker 10: only the CFO, but also the board. When you have

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Speaker 10: the wife of the CEO as a member of the

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Speaker 10: board and a seventeen year old a person on the

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Speaker 10: board who's been on for about seventeen years, there's very

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Speaker 10: limited independence. Quite frankly, I do think there needs to

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Speaker 10: be some sort of overhaul of the board. And I've

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Speaker 10: said in the past on this show, and I have

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Speaker 10: written that I think the CEO may need to be

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Speaker 10: promoted to a chairman role and I may need a

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Speaker 10: new CEO.

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Speaker 5: Now, is this what part of all of this has

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Speaker 5: to do with just going from a company in the

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Speaker 5: Russell to the company in the S and P and

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Speaker 5: is growing super fast and having different kind of analysts

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Speaker 5: coverage And how much of this was going to come

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Speaker 5: kind of no matter what.

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Speaker 10: Yeah, you know, that's a good question, Alex. You know, look,

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Speaker 10: this used to be a Russell company or a mid

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Speaker 10: cap company and it was under the radar for a

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Speaker 10: lot of analysts. And now we're talking about being in

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Speaker 10: the S and P five hundred index and you're gonna

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Speaker 10: have a lot of magnifying glasses on the financials. And

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Speaker 10: keep in mind, you know, it's only been about five

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Speaker 10: to six years back where they were delicted from from

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Speaker 10: the NASDAC and for them to do this again, it's

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Speaker 10: quite frankly shameful in my mind. Now, if there is,

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Speaker 10: if there is no wrongdoing here, shame on me, right,

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Speaker 10: But you know, Fumi wants, you know, shame on them,

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Speaker 10: fully twice shame on me. So you know you're gonna

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Speaker 10: see a lot of scrutiny going forward. I don't know

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Speaker 10: if they'll come back after this.

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Speaker 2: Have they lost have they lost customers to any material basis?

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Speaker 10: Nothing reported as of yet. What they said on the

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Speaker 10: last earnings call was that there were a couple of

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Speaker 10: customers who you know, they're trying to retain.

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Speaker 5: That's a nice way of saying not yet. I think

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Speaker 5: from a CEO speak, how much more?

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Speaker 8: Okay?

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Speaker 5: So, just pure valuation perspective, how do we know how

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Speaker 5: to value this company when they're all these questions.

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Speaker 10: Look at the end of the day, you know, and

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Speaker 10: Paul taught me, well, it's all about cash flow and earnings.

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Speaker 10: Nice John, And I don't know what. I don't know

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Speaker 10: what earnings is. In our scenario model, we have a

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Speaker 10: buck sixty in earnings go going forward, and hardware companies

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Speaker 10: of this ilk AI companies are ranging anywhere between ten

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Speaker 10: to fifteen times. So if my buck sixty is right

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Speaker 10: and it's going at around let's just say at the

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Speaker 10: high end, fifteen to sixteen times. No, it seems like

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Speaker 10: from a valuation standpoint, it's training at the fundamentals.

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Speaker 2: All right, Wujin, thank you so much.

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Speaker 7: We appreciate it.

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Speaker 2: Wujin Home senior technolog channels for Bloomberg Intelligence down there

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Speaker 2: in Princeton, New Jersey, super Micro, they're trying to make

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Speaker 2: some headway here. They let go of their CFO, but

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Speaker 2: it looks like they're going to get their accounts to

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Speaker 2: sign off on some of the financial statements that allow

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Speaker 2: them to file their k's and queues and maybe get

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Speaker 2: some of this accounting issues behind them, because, as Wujin

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Speaker 2: was saying, before this accounting issue there was a high

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Speaker 2: flying stock and really believed to be in discount of

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Speaker 2: by the market is one of the plays for AI.

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Speaker 1: Right here, you're listening to the Bloomberg Intelligence Podcast. Catch

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Speaker 1: us live weekdays at ten am Eastern on FO car

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Speaker 1: Playing and broud Otto with the Bloomberg Business app. Listen

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Speaker 1: on demand wherever you get your podcasts, or watch us

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Speaker 1: live on YouTube.

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Speaker 5: Let's get more on the manufacturing data because for the

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Speaker 5: first time in eight months, new orders entered expansion territory.

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Speaker 5: Joining us for now is Tim Fiori, chair of the

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Speaker 5: Institute for Supply Managements Manufacturing Business Survey Committee, and he

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Speaker 5: joins US now Hey, Tim, what drove that expansion?

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Speaker 4: A couple of things, Alex.

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Speaker 11: First off, the new order number finally broke fifty. I mean,

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Speaker 11: we broke fifty before in the last couple of years,

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Speaker 11: but we've broken fifty here for a good reason. It

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Speaker 11: feels like the man is starting to come back now

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Speaker 11: that the uncertainty around the election is behind us.

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Speaker 4: That's a good thing.

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Speaker 11: The other thing that validates that is that our manufacturing

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Speaker 11: inventory number actually rose five point five points, which would

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Speaker 11: also indicate that companies are more willing to invest in

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Speaker 11: working capital to get ready for the twenty twenty five

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Speaker 11: business here.

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Speaker 4: So overall, a good report. I think. The other point

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Speaker 4: here is our employment.

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Speaker 11: Although we're still destaffing, we're not destaffing as strongly.

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Speaker 4: You know, we came into forty eight point one.

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Speaker 11: So the three of those together got us close to

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Speaker 11: forty nine. And I'll tell you if the supplier delivery number,

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Speaker 11: which surprisingly actually got faster, if it had remained slower,

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Speaker 11: we would have broke forty nine and gotten closer to

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Speaker 11: the fifty.

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Speaker 4: So overall, a good report from November.

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Speaker 11: A little bit surprising, a little bit more positive than

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Speaker 11: I would have thought this early, but very consistent with

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Speaker 11: the fact that.

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Speaker 4: Rate we're on a rate reduction cycle.

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Speaker 11: The election is behind us, it's obviously going to be

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Speaker 11: a positive thing for the economy, and off we go

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Speaker 11: into twenty twenty five.

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Speaker 12: Tim, great to have you with us.

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Speaker 2: Tim Fury, chairman of the Manufacturing Business Survey for the

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Speaker 2: Institute for Supply Management, zipping in here with some economic data.

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Speaker 2: For word came in a little bit better and expected,

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Speaker 2: so we'll take that. I wonder how much of that

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Speaker 2: has to do with the election and some of the

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Speaker 2: economic optimism that has felt in a lot of parts well.

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Speaker 5: And also I wonder how that winds up looking as

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Speaker 5: we go into twenty twenty five, because it will we

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Speaker 5: see stockpiling ahead of any tariffs well, and will that

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Speaker 5: change the inventory in new orders? That could be interesting

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Speaker 5: to figure out too.

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Speaker 4: Yep, very good.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on applecar Play and Android

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Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station,

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Speaker 1: Just Say Alexa, Play Bloomberg eleven thirty.

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Speaker 5: Alex steal here alongside Paul Sweeney.

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Speaker 8: This is Bloomberg Intelligence Radio. We bring you all the

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Speaker 8: top news.

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Speaker 5: And business, economics and finance and politics from our lens

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Speaker 5: of our Bloomberg Intelligence folks. They cover two thousand companies

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Speaker 5: in one hundred and thirty industries all around the world world.

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Speaker 5: We also tap wonderful guests outside of Bloomberg Intelligence for

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Speaker 5: their broader take on the market, particularly after a really

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Speaker 5: stellar year.

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Speaker 8: Here's some facts for you.

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Speaker 5: SMP is up almost twenty seven percent on the year,

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Speaker 5: the best performance through November since nineteen ninety seven, and

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Speaker 5: going back fifty years, the SMP has always gained in

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Speaker 5: December after rising twenty five percent or more in the

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Speaker 5: first eleven months. That's a technical way of saying the

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Speaker 5: rally could continue.

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Speaker 8: I'll joining us more.

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Speaker 5: For his take is David Awaddell, CEO and chief investment

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Speaker 5: strategist at Waddell and Associates. He joins us now in

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Speaker 5: the studio. David, good to see you, Thanks for joining.

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Speaker 4: Good morning.

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Speaker 3: Now.

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Speaker 8: Is that the deal? Like, Hey, we're up just to

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Speaker 8: keep buying it?

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Speaker 5: Why not?

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Speaker 6: I think the number of occurrence is in that sample

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Speaker 6: space was rather small, but we'll go with him. Okay,

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Speaker 6: I think the Santa claus rally can continue. And you

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Speaker 6: know what's amazing is that earnings are accelerating from here, right,

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Speaker 6: So as we look out over the next twenty four months,

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Speaker 6: earnings grow fifteen percent next year, maybe fifteen percent the

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Speaker 6: following year. And so with that as a backdrop, and

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Speaker 6: by the way, here's a nice stat In years where

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Speaker 6: there's not a recession, markets are higher eighty six percent

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Speaker 6: of the time. So it bodes well for next year.

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Speaker 6: And I think people are squaring that going into the

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Speaker 6: end of this year.

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Speaker 2: We're almost a month of past the election. When you

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Speaker 2: look up the day after the election, did you and

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Speaker 2: your team did you rethink maybe your outlook for asset

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Speaker 2: allocation or maybe how you think about investing. Did the

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Speaker 2: change in administration and the Republican controlled Congress did that changed

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Speaker 2: how you looked at it?

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Speaker 6: A great question. So to a certain extent, we were

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Speaker 6: all so already anticipating a.

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Speaker 4: Move down the cap spectrum.

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Speaker 6: You know, I don't think the mag seven go to

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Speaker 6: the LAG seven, but other people should participate, and they

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Speaker 6: have in the second half of the year. So we'd

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Speaker 6: already sort of moved down the cap spectrum, which is

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Speaker 6: part of the Trump trade. The part I hadn't really

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Speaker 6: anticipated was how strong the currency reaction was going to be,

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Speaker 6: So our offshore holdings currently are unheedged. That's up for

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Speaker 6: discussion now in terms of because the move in the

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Speaker 6: currency has been dramatic, and that may be the big

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Speaker 6: story for next year. Less so interest rates, since it

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Speaker 6: pears that the markets like our new treasury nominee. But

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Speaker 6: that's up for discussion. On the investment com me is

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Speaker 6: whether it a hedge currency or not.

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Speaker 5: Well, that's actually quite interesting because President elect Donald Trump

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Speaker 5: has made no bones about the fact that he wants

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Speaker 5: a week er dollar. But then the thread over the

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Speaker 5: weekend to the bricks Nations about you has still have

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Speaker 5: to use the dollar, and we know that tariffs are coming.

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Speaker 8: How does that square itself?

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Speaker 6: I don't know, and I keep going through that gymnastics

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Speaker 6: in my head. But I'll tell you the most interesting

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Speaker 6: thing to me is US imports are four trillion dollars.

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Speaker 6: If Trump slaps ten percent tariff on that, you know,

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Speaker 6: it's four hundred billion dollars in potential tax revenue. Now,

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Speaker 6: my economics textbook says, well, that just means that ford

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Speaker 6: producers are just going to raise their price is ten percent. Well,

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Speaker 6: the dollars appreciated eight percent since the end of September,

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Speaker 6: which almost negates that in the marketplace. So I think

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Speaker 6: the interplay between the tariffs and the movement and the

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Speaker 6: currents may be the most interesting thing going into next year.

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Speaker 6: And again that may just be you know, state craft

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Speaker 6: and jaw owning and not really policy but more negotiating positions.

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Speaker 1: We won't know.

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Speaker 6: But I think the currency is the most interesting.

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Speaker 2: US versus non US. How do you guys position that

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Speaker 2: generally speaking?

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Speaker 6: Well, so we benchmark against the all world the ACLEE,

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Speaker 6: and we've been tilted towards the US, but the valuations

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Speaker 6: overseas are much more compelling. The earnings growth is okay,

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Speaker 6: but Europe seems anemic and continues to struggle. I think,

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Speaker 6: you know, the stock market in Germany and if you

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Speaker 6: look at earnings in Germany and the size, that economy

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Speaker 6: hadn't done anything in the past few years, and so

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Speaker 6: it makes it somewhat challenging to defend that position. But

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Speaker 6: right now, at the moment, with policy being so uncertain,

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Speaker 6: you know, I don't think it's time to be making

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Speaker 6: large transitions, either on shore or offshore. But obviously the

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Speaker 6: bias is towards the US right now, and that's reflected

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Speaker 6: in the currency markets.

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Speaker 8: So what do you think it's.

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Speaker 5: Going to take for you guys to make it as

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Speaker 5: a and whether to hedge your XUS exposure? Like, what's

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Speaker 5: going to take the scales for you guys?

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Speaker 6: I would never fully hedge it, probably because again, currency

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Speaker 6: markets are fickle and challenging, and things can change a

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Speaker 6: lot with policy proclamations. Right now, we're fully unhedged. In

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Speaker 6: terms of what portion of that to hedge.

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Speaker 1: I don't know.

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Speaker 6: That'd be a position by position decision.

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Speaker 2: Okay, it seems like ever since I've been in this

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Speaker 2: marketplace June sixteenth, nineteen eighty six, by the way, growth

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Speaker 2: has been the story. Yeah, howpen if you're a value investor,

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Speaker 2: what do you do here? How does this new world

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Speaker 2: that we're kind of entering?

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Speaker 8: How does that?

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Speaker 4: You know?

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Speaker 6: I've been making the standard deviation argument for a while,

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Speaker 6: which is that performance and valuations have reached extreme levels.

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Speaker 6: That is true, But if you look at this year,

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Speaker 6: utilities have outperformed technology, right, Financials have outperformed, industrials have outperformed,

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Speaker 6: and if you look at at the trade since Trump.

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Speaker 6: You know, value has done very well. I mean the

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Speaker 6: mag seven's done five but mid caps, for instance, which

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Speaker 6: are more value latent, have outperformed small caps, which obviously

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Speaker 6: have a lot more financials since June thirtieth, or up

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Speaker 6: twice as much. So I think I hate to say,

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Speaker 6: you know, we're overdue, because we've been overdue for a while,

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Speaker 6: but I do think the value trade has some substance

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Speaker 6: to it. And if what we're trying to do is

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Speaker 6: drill another three million barrels of oil per day, which

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Speaker 6: is a ton because we're drilling what thirteen and change,

443
00:21:28,800 --> 00:21:31,679
Speaker 6: that's going to benefit materials companies, that's going to benefit

444
00:21:31,720 --> 00:21:34,560
Speaker 6: industrials companies. And a lot of the Inflation Reduction Act

445
00:21:34,640 --> 00:21:37,960
Speaker 6: infrastructure spending hasn't even come out yet, So I think

446
00:21:38,000 --> 00:21:40,760
Speaker 6: industrials end up being kind of the darling you know

447
00:21:40,880 --> 00:21:44,560
Speaker 6: in Trump one point zero energy actually was negative even

448
00:21:44,600 --> 00:21:46,600
Speaker 6: though the S and P five hundred was up seventy

449
00:21:46,640 --> 00:21:50,760
Speaker 6: percent over that period of time. So, you know, I'm

450
00:21:50,760 --> 00:21:53,359
Speaker 6: not sure all value sectors benefit, but I would say

451
00:21:53,400 --> 00:21:56,400
Speaker 6: industrials look good, Financials can continue to look good, especially

452
00:21:56,400 --> 00:22:00,199
Speaker 6: with less regulatory pressures, and materials should look good. So

453
00:22:00,440 --> 00:22:03,640
Speaker 6: and utilities. You know, the earnings, they are pretty substantial,

454
00:22:03,840 --> 00:22:07,359
Speaker 6: and there's some obvious link with what's going on in AI.

455
00:22:07,600 --> 00:22:10,720
Speaker 6: So it may be that values overdue and that twenty

456
00:22:10,800 --> 00:22:12,240
Speaker 6: twenty five will be the year of value.

457
00:22:12,240 --> 00:22:13,760
Speaker 8: We'll see, we'll see exactly.

458
00:22:14,200 --> 00:22:15,600
Speaker 5: I was going to say, you know, who doesn't like

459
00:22:15,600 --> 00:22:18,439
Speaker 5: three million barrels of oil a day? Extra oil oil company?

460
00:22:18,480 --> 00:22:20,520
Speaker 6: That's right, the industrials.

461
00:22:20,560 --> 00:22:23,320
Speaker 8: Exactly what do you do then? With tech?

462
00:22:23,359 --> 00:22:27,320
Speaker 5: You said, you know, earnings earnings outlook for technology is

463
00:22:27,359 --> 00:22:29,240
Speaker 5: definitely going to be lower next year, right, but it's

464
00:22:29,240 --> 00:22:32,119
Speaker 5: not nothing. It's gonna be double digit's probably the mid teens.

465
00:22:32,440 --> 00:22:35,040
Speaker 5: How do you invest in big tech currently?

466
00:22:35,160 --> 00:22:36,680
Speaker 6: Well, it's kind of curious, you know, if you look

467
00:22:36,680 --> 00:22:38,640
Speaker 6: at the socks, like.

468
00:22:38,680 --> 00:22:40,520
Speaker 8: Half the Semi index, Yeah.

469
00:22:40,160 --> 00:22:42,119
Speaker 6: Half the stocks in there are negative this year, and

470
00:22:42,200 --> 00:22:44,880
Speaker 6: I think the index itself is up about thirteen percent.

471
00:22:45,240 --> 00:22:48,240
Speaker 6: So it had a great twenty twenty three. It did

472
00:22:48,240 --> 00:22:51,040
Speaker 6: not really have a great twenty twenty four. But if

473
00:22:51,200 --> 00:22:54,560
Speaker 6: corporate taxes are four hundred and fifty billion, and Trump's

474
00:22:54,600 --> 00:22:57,840
Speaker 6: going to cut them by another thirty three percent, that's

475
00:22:57,880 --> 00:23:00,560
Speaker 6: going to create a lot of ammunition for CAPET. So

476
00:23:01,480 --> 00:23:04,240
Speaker 6: I don't think the tech trade is over. It's just

477
00:23:04,280 --> 00:23:07,760
Speaker 6: more fun when other people participate as well. So I

478
00:23:07,800 --> 00:23:08,760
Speaker 6: think everything you.

479
00:23:08,760 --> 00:23:09,880
Speaker 8: Don't like cell tech.

480
00:23:10,160 --> 00:23:12,520
Speaker 6: No, I don't think you sell tech, but I do

481
00:23:12,640 --> 00:23:17,200
Speaker 6: think you start moving towards more mid gap small cap exposures.

482
00:23:17,280 --> 00:23:21,000
Speaker 6: In fact, since Trump, I think was elected, the number

483
00:23:21,000 --> 00:23:26,000
Speaker 6: one performing factor was small cap growth, so MidCap tech,

484
00:23:26,080 --> 00:23:28,840
Speaker 6: small cap tech, you know a lot of cap X.

485
00:23:28,920 --> 00:23:30,440
Speaker 6: I see that all of that is bullish.

486
00:23:30,800 --> 00:23:34,040
Speaker 2: Bond market to your treasury four point two percent, or

487
00:23:34,359 --> 00:23:35,440
Speaker 2: take some credit risk here.

488
00:23:36,359 --> 00:23:36,560
Speaker 4: You know.

489
00:23:37,080 --> 00:23:40,720
Speaker 6: Here's the thing. So during Trump one point zero, nominal

490
00:23:40,840 --> 00:23:45,920
Speaker 6: GDP was four point eight percent, Real GDP grew two

491
00:23:45,960 --> 00:23:49,640
Speaker 6: point eight percent. Inflation was two point one. So we're

492
00:23:49,680 --> 00:23:52,119
Speaker 6: sitting on the ten year, which is where the equity

493
00:23:52,160 --> 00:23:56,480
Speaker 6: market really prices at four twenty two or something, call

494
00:23:56,520 --> 00:24:00,760
Speaker 6: it whatever it says. That means that we're priced appropriately

495
00:24:00,960 --> 00:24:03,719
Speaker 6: from a pe perspective for the stock market. So I

496
00:24:03,720 --> 00:24:07,040
Speaker 6: think things have got it right. What'll be curious is

497
00:24:07,040 --> 00:24:09,760
Speaker 6: when the Fed comes out on the eighteenth, they'll release

498
00:24:09,760 --> 00:24:13,040
Speaker 6: their summary of economic projections and we'll see where they

499
00:24:13,040 --> 00:24:15,320
Speaker 6: think the neutral is. You know, obviously the number of

500
00:24:15,359 --> 00:24:17,600
Speaker 6: rate cuts has come off the table to about two

501
00:24:17,680 --> 00:24:19,919
Speaker 6: and a half over the next twelve months. And so

502
00:24:20,520 --> 00:24:23,119
Speaker 6: there's a lot more tensile strength in the economy that

503
00:24:23,160 --> 00:24:25,840
Speaker 6: people thought. And we'll get I guess the isms this

504
00:24:25,920 --> 00:24:26,560
Speaker 6: morning I'm looking for.

505
00:24:26,640 --> 00:24:29,880
Speaker 8: Yeah, they're actually pretty good. Yeah, mana fashioning.

506
00:24:30,080 --> 00:24:32,840
Speaker 5: So the new orders went into expansion territory for the

507
00:24:32,880 --> 00:24:34,840
Speaker 5: first time in eight months. The other parts of the

508
00:24:34,840 --> 00:24:37,800
Speaker 5: indices didn't, but it was close, and we heard the

509
00:24:37,800 --> 00:24:39,120
Speaker 5: inventory started.

510
00:24:38,800 --> 00:24:41,040
Speaker 8: To rise again. So really gearing up for a business

511
00:24:41,080 --> 00:24:42,120
Speaker 8: cycle in twenty twenty five.

512
00:24:42,200 --> 00:24:44,119
Speaker 6: Yeah, and where was service? I guess we'll get services

513
00:24:44,160 --> 00:24:48,280
Speaker 6: there later. So if manufacturing turns the corner and starts

514
00:24:48,320 --> 00:24:51,240
Speaker 6: being expansive, then where should the neutral rate be? So

515
00:24:51,320 --> 00:24:53,320
Speaker 6: I think that's the big question mark. But I think

516
00:24:53,720 --> 00:24:55,760
Speaker 6: I think we're back to two two and a half

517
00:24:55,840 --> 00:24:58,280
Speaker 6: rate cuts, although you know, i'd love a Christmas cut

518
00:24:58,320 --> 00:24:59,240
Speaker 6: on the eighteenth.

519
00:25:00,160 --> 00:25:01,560
Speaker 8: Do you think we're going to get that?

520
00:25:01,920 --> 00:25:05,439
Speaker 6: I mean, I don't know where the the CME tool is.

521
00:25:05,520 --> 00:25:07,600
Speaker 6: It was at sixty six percent when I looked over

522
00:25:07,640 --> 00:25:08,120
Speaker 6: the weekend.

523
00:25:08,160 --> 00:25:09,680
Speaker 5: It looks like we are priced in for at least

524
00:25:09,720 --> 00:25:12,399
Speaker 5: one but it'd be great, Okay, you like that? And

525
00:25:12,480 --> 00:25:15,879
Speaker 5: im Services is coming up on Wednesdays. You'll break that

526
00:25:15,960 --> 00:25:17,640
Speaker 5: down to you as well.

527
00:25:17,800 --> 00:25:20,840
Speaker 2: David. You're based in Memphis, Tennessee, right Memphis in Nashville.

528
00:25:20,920 --> 00:25:23,360
Speaker 2: Memphis talked to us about Memphis. I haven't been to Memphis.

529
00:25:23,440 --> 00:25:25,400
Speaker 2: I don't think I've been to Memphis. Talk U about

530
00:25:25,400 --> 00:25:26,080
Speaker 2: economy down there.

531
00:25:26,080 --> 00:25:27,520
Speaker 6: What drives Memphis?

532
00:25:27,800 --> 00:25:27,960
Speaker 13: Well?

533
00:25:28,000 --> 00:25:31,200
Speaker 6: Right now Elon Musk because he just decided to build

534
00:25:31,400 --> 00:25:35,959
Speaker 6: his AI data center in Memphis, Tennessee, Yes, exactly, and

535
00:25:36,080 --> 00:25:39,760
Speaker 6: doubled the capacity immediately. And you know, they continue to

536
00:25:39,840 --> 00:25:43,159
Speaker 6: raise money for XAI, which means more capital expenditures. So

537
00:25:43,680 --> 00:25:48,359
Speaker 6: there's a lot of industrial you know, expansion going on

538
00:25:48,520 --> 00:25:51,560
Speaker 6: right now. Because we have a great power grid, We've

539
00:25:51,560 --> 00:25:54,000
Speaker 6: got a great logistics network. You know, our anchor tenant

540
00:25:54,119 --> 00:25:57,679
Speaker 6: is FedEx, which is the you know, the global nervous

541
00:25:57,680 --> 00:26:00,920
Speaker 6: system from a trade perspective. And so I would say

542
00:26:00,960 --> 00:26:04,359
Speaker 6: Memphis is a value stock right with an opportunity to

543
00:26:04,359 --> 00:26:07,320
Speaker 6: buy it you run three hours up the road. Nashville

544
00:26:07,400 --> 00:26:10,640
Speaker 6: is a growth stock and headquarters just continue to move

545
00:26:10,680 --> 00:26:15,240
Speaker 6: there almost every single day. So it's it's an age

546
00:26:15,240 --> 00:26:17,480
Speaker 6: of renaissance in the state of Tennessee. Right now.

547
00:26:17,640 --> 00:26:18,880
Speaker 2: I'll tell you, I mean, you read about it. I'm

548
00:26:18,880 --> 00:26:21,560
Speaker 2: just looking around here. I mean's just yeah, Memphis, Nashville.

549
00:26:21,600 --> 00:26:24,080
Speaker 2: You hear so much about Tennessee. It seems like every

550
00:26:24,080 --> 00:26:26,120
Speaker 2: car company. What's it about Tennessee.

551
00:26:26,320 --> 00:26:29,040
Speaker 6: Well, Corker was good at that too. Yeah, So we

552
00:26:29,080 --> 00:26:32,680
Speaker 6: had great political leadership. Brettison was amazing, Corker was amazing,

553
00:26:32,800 --> 00:26:38,840
Speaker 6: and Nashville has been very aligned on a growth agenda politically, philanthropically,

554
00:26:39,480 --> 00:26:42,639
Speaker 6: you know, in the private sector obviously, and so it's just,

555
00:26:42,840 --> 00:26:44,760
Speaker 6: you know, it's a great time to Nashville has.

556
00:26:44,640 --> 00:26:47,600
Speaker 2: Become the which I don't know why, the bachelorette party

557
00:26:47,680 --> 00:26:50,480
Speaker 2: capital of the world, you know, surpassing Vegas.

558
00:26:50,600 --> 00:26:52,960
Speaker 5: I was in Nashville, was with you with radio, but

559
00:26:53,000 --> 00:26:54,800
Speaker 5: I was so sick. I didn't leave the hotel like

560
00:26:54,840 --> 00:26:55,920
Speaker 5: the whole time for three days.

561
00:26:55,920 --> 00:26:56,800
Speaker 8: So it's good times.

562
00:26:57,280 --> 00:27:00,159
Speaker 5: That hotel was nice, they had nice Starbucks. Sorry, we

563
00:27:00,200 --> 00:27:01,040
Speaker 5: appreciate your time.

564
00:27:01,040 --> 00:27:01,760
Speaker 8: Thank you so much.

565
00:27:02,240 --> 00:27:05,360
Speaker 5: David Wodell, a CEO and chief investment strategist at Wodell

566
00:27:05,480 --> 00:27:06,560
Speaker 5: and Associates.

567
00:27:07,960 --> 00:27:11,840
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

568
00:27:11,920 --> 00:27:14,440
Speaker 1: weekdays at ten am Eastern on Apple.

569
00:27:14,200 --> 00:27:17,040
Speaker 9: Card Play and Android Auto with the Bloomberg.

570
00:27:16,640 --> 00:27:20,040
Speaker 1: Business You can also listen live on Amazon Alexa from

571
00:27:20,080 --> 00:27:23,840
Speaker 1: our flagship New York station Just Say Alexa playing Bloomberg

572
00:27:23,880 --> 00:27:24,600
Speaker 1: eleven thirty.

573
00:27:25,720 --> 00:27:28,360
Speaker 2: The political news today is coming out of France. The

574
00:27:28,400 --> 00:27:31,800
Speaker 2: far right National Party of Marine Le penn will back

575
00:27:31,840 --> 00:27:35,560
Speaker 2: a motion to topple the French government after Prime Minister

576
00:27:35,960 --> 00:27:39,640
Speaker 2: Michel Barnier failed to agree to all of its demands

577
00:27:39,640 --> 00:27:42,600
Speaker 2: on next year's budget. Let's get the latest reporting there

578
00:27:42,680 --> 00:27:46,600
Speaker 2: with Ben Sill's Bloomberg Managing editor for European Economy and Government. Ben,

579
00:27:46,680 --> 00:27:49,560
Speaker 2: do you educate us as to what's happening in Paris

580
00:27:49,800 --> 00:27:50,240
Speaker 2: right now?

581
00:27:51,680 --> 00:27:51,920
Speaker 4: Yeah?

582
00:27:51,960 --> 00:27:53,800
Speaker 14: Well, you know, it's difficult to keep up, to be honest,

583
00:27:53,840 --> 00:27:56,000
Speaker 14: We've got the headlines breaking on the terminal right now.

584
00:27:56,119 --> 00:27:58,280
Speaker 12: I'm just in the last few minutes, as you.

585
00:27:58,280 --> 00:28:01,920
Speaker 14: Say, the far right part Marine la penn has come

586
00:28:01,960 --> 00:28:04,959
Speaker 14: out and announced that they are going to vote to

587
00:28:05,000 --> 00:28:06,800
Speaker 14: bring down the current administration.

588
00:28:08,280 --> 00:28:10,640
Speaker 12: It's been a really dramatic few days.

589
00:28:10,720 --> 00:28:15,760
Speaker 14: The Barnier government has been walking on thin ice ever

590
00:28:15,800 --> 00:28:21,639
Speaker 14: since it was formed in September. Their lack of a

591
00:28:21,680 --> 00:28:25,360
Speaker 14: majority in the parliament meant that Marine la Penne effectively

592
00:28:25,480 --> 00:28:28,560
Speaker 14: had the power of life and death over that government.

593
00:28:28,800 --> 00:28:31,240
Speaker 14: Barnier has been desperately trying to get its budget through.

594
00:28:32,160 --> 00:28:35,199
Speaker 14: Feels like every other day for the last week or so,

595
00:28:35,400 --> 00:28:40,800
Speaker 14: he's been caving in to one demand or another. He's now,

596
00:28:40,920 --> 00:28:45,160
Speaker 14: by my reckoning, given La penn three or four of

597
00:28:45,200 --> 00:28:49,320
Speaker 14: the main demands that she wanted. She's still not happy

598
00:28:49,320 --> 00:28:51,840
Speaker 14: and so she's decided to pull the plug on the.

599
00:28:51,760 --> 00:28:55,920
Speaker 5: Government right and by forcing it through. Therefore, thus vote

600
00:28:55,920 --> 00:28:58,480
Speaker 5: of no confidence can be called. Within the market, we

601
00:28:58,520 --> 00:29:00,760
Speaker 5: are looking at a weaker euro. There's also been a

602
00:29:00,800 --> 00:29:03,520
Speaker 5: lot of talk about how the difference between yield in

603
00:29:03,600 --> 00:29:06,560
Speaker 5: Germany and yield in France, well France in Germany has

604
00:29:06,640 --> 00:29:08,760
Speaker 5: blown out, and then it's at the level that we

605
00:29:08,800 --> 00:29:11,600
Speaker 5: haven't seen since the European sovereign dead crisis back in

606
00:29:11,640 --> 00:29:15,160
Speaker 5: twenty twelve. It's an easy comparison to make, but it's

607
00:29:15,320 --> 00:29:17,440
Speaker 5: very different when you look kind of under the hood

608
00:29:17,480 --> 00:29:17,680
Speaker 5: at that.

609
00:29:20,760 --> 00:29:21,960
Speaker 12: Yeah, absolutely so.

610
00:29:22,040 --> 00:29:25,160
Speaker 14: I mean the threshold that we were struck by last

611
00:29:25,200 --> 00:29:29,000
Speaker 14: week was when the French bond spread actually went wider

612
00:29:29,040 --> 00:29:31,120
Speaker 14: than the Greek bond spread. You know, those of us

613
00:29:31,120 --> 00:29:35,680
Speaker 14: who are around a handle fifteen years ago, when the

614
00:29:35,800 --> 00:29:39,760
Speaker 14: sovereign party with sovereign crisis blew up. Got used to

615
00:29:39,800 --> 00:29:41,760
Speaker 14: tracking the Greek spread, but we never really thought that

616
00:29:41,760 --> 00:29:43,440
Speaker 14: France would be in the same boat.

617
00:29:44,600 --> 00:29:47,000
Speaker 2: So where do we go from here? Where did the

618
00:29:47,040 --> 00:29:49,800
Speaker 2: French go from here? And kind of what's the timeframe here?

619
00:29:50,600 --> 00:29:54,360
Speaker 12: I agree, Yeah, that's a question. I mean, I think that.

620
00:29:57,040 --> 00:30:00,320
Speaker 14: In terms of the kind of the next steps, we'll

621
00:30:00,320 --> 00:30:03,000
Speaker 14: be looking for the no confidence vote to happen in

622
00:30:03,040 --> 00:30:06,719
Speaker 14: the next couple of days. We would expect that to

623
00:30:06,840 --> 00:30:12,400
Speaker 14: go through. That doesn't really resolve anything though, because under

624
00:30:12,400 --> 00:30:16,520
Speaker 14: the French constitutional rules they can't hold another election until

625
00:30:16,600 --> 00:30:22,160
Speaker 14: next next July, I think, And so there's no way

626
00:30:22,280 --> 00:30:23,960
Speaker 14: to put this to the vote to get a new

627
00:30:25,160 --> 00:30:30,360
Speaker 14: kind of parliament there. So Macron is going to have

628
00:30:30,440 --> 00:30:33,880
Speaker 14: the same complicated, divided legislature.

629
00:30:33,560 --> 00:30:34,240
Speaker 12: To work with.

630
00:30:34,280 --> 00:30:36,440
Speaker 14: The parties are going to have to try and come

631
00:30:36,520 --> 00:30:43,840
Speaker 14: up with a new and a new agreement for governing.

632
00:30:43,960 --> 00:30:45,640
Speaker 12: But I think everyone's gonna be looking at La Penn.

633
00:30:45,720 --> 00:30:49,440
Speaker 12: She's she's setting the agenda here. She's the one who.

634
00:30:49,320 --> 00:30:52,760
Speaker 14: Has decided to force the issue, and so it'll be

635
00:30:53,200 --> 00:30:55,200
Speaker 14: there will be a sa onus on her to make

636
00:30:55,240 --> 00:30:57,400
Speaker 14: the first move when we come out the other side

637
00:30:57,440 --> 00:30:58,560
Speaker 14: of this crisis and one.

638
00:30:58,480 --> 00:31:00,280
Speaker 5: Of the triggers for this was, of course, this Apple

639
00:31:00,240 --> 00:31:02,080
Speaker 5: election that sort of set up the government like this

640
00:31:02,240 --> 00:31:04,360
Speaker 5: in the first place. Are we at risk of having

641
00:31:04,360 --> 00:31:06,560
Speaker 5: that happen again, having that happen again?

642
00:31:07,720 --> 00:31:10,120
Speaker 12: Yeah, I think that. You know, this is something that's

643
00:31:10,160 --> 00:31:13,080
Speaker 12: been building for a long long time in France.

644
00:31:13,280 --> 00:31:16,920
Speaker 14: The Penn has been a fixture on the political scene

645
00:31:16,960 --> 00:31:21,640
Speaker 14: there for you know, more than the decade. She had

646
00:31:21,640 --> 00:31:26,240
Speaker 14: her first presidential run against against against Macrow in twenty seventeen,

647
00:31:27,160 --> 00:31:30,120
Speaker 14: and so the French establishment has been coming up with

648
00:31:30,200 --> 00:31:33,720
Speaker 14: a series of kind of increasingly creative ways to keep

649
00:31:33,720 --> 00:31:36,760
Speaker 14: her out. But her stock is higher than it's ever

650
00:31:36,760 --> 00:31:38,320
Speaker 14: been before at the moment, and you can see that

651
00:31:38,360 --> 00:31:40,880
Speaker 14: by the way by the way she's leveraging her power

652
00:31:41,080 --> 00:31:47,040
Speaker 14: this week. The endgame really sent us on the twenty

653
00:31:47,120 --> 00:31:51,200
Speaker 14: twenty seven presidential election. That's when the Penn is really

654
00:31:51,760 --> 00:31:53,840
Speaker 14: aiming to finally take power in France.

655
00:31:54,680 --> 00:31:55,600
Speaker 12: The question is.

656
00:31:57,120 --> 00:31:59,960
Speaker 14: Does Macron hold out to then There has been spect

657
00:32:00,040 --> 00:32:03,600
Speaker 14: collation in France that he might quit, but you know,

658
00:32:03,680 --> 00:32:05,120
Speaker 14: he's so that he's not going to do that. So

659
00:32:05,160 --> 00:32:06,880
Speaker 14: that means we're kind of in this sort of slight

660
00:32:08,280 --> 00:32:11,719
Speaker 14: limbog situation where no one can really government, but they

661
00:32:11,760 --> 00:32:13,160
Speaker 14: can't force direction.

662
00:32:13,520 --> 00:32:16,320
Speaker 2: Ben, thank you so much for that reporting appreciated. Ben Sills,

663
00:32:16,720 --> 00:32:19,720
Speaker 2: Managing editor of Bloomberg News. He is coming in from

664
00:32:19,720 --> 00:32:23,000
Speaker 2: our Berlin, the Germany studio on the latest news coming

665
00:32:23,040 --> 00:32:27,120
Speaker 2: out of France. Some political instability right there. We're seeing

666
00:32:27,120 --> 00:32:28,040
Speaker 2: that in the euro.

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00:32:29,640 --> 00:32:33,520
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

668
00:32:33,600 --> 00:32:37,120
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

669
00:32:37,160 --> 00:32:40,320
Speaker 1: Outo with the Bloomberg Business. You can also listen live

670
00:32:40,400 --> 00:32:43,600
Speaker 1: on Amazon Alexa from our flagship New York station, Just

671
00:32:43,640 --> 00:32:48,560
Speaker 1: say Alexa play Bloomberg eleven thirty.

672
00:32:47,880 --> 00:32:49,960
Speaker 2: Alex Steel, Paul Swene, You're live here in our Bloomberg

673
00:32:50,000 --> 00:32:52,560
Speaker 2: Interactive Broker Studio and we're streaming live on YouTube as well.

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00:32:52,600 --> 00:32:55,200
Speaker 2: So the head over Bloomberg dot I mean, I'm sorry,

675
00:32:55,200 --> 00:32:57,840
Speaker 2: YouTube dot Com and search of Bloomberg Podcast, and that's

676
00:32:57,920 --> 00:32:59,640
Speaker 2: where you will find us. Let's check out with our

677
00:32:59,640 --> 00:33:01,360
Speaker 2: next here, because what a lot of folks are trying

678
00:33:01,360 --> 00:33:05,080
Speaker 2: to do is figure out how to reposition their investment outlook,

679
00:33:05,120 --> 00:33:09,000
Speaker 2: their portfolio for a second term of President elect Trump.

680
00:33:09,200 --> 00:33:11,800
Speaker 2: Any changes that need to be made. People trying to

681
00:33:11,840 --> 00:33:14,440
Speaker 2: think about those right now. Peter Anderson is one of

682
00:33:14,440 --> 00:33:18,240
Speaker 2: those folks, founder and chief investment officer for Anderson Capital Management,

683
00:33:18,320 --> 00:33:21,880
Speaker 2: joining us from Boston, mass via zoom. So, Peter, we're

684
00:33:21,880 --> 00:33:25,800
Speaker 2: almost a month removed from the election. We now have

685
00:33:25,960 --> 00:33:30,240
Speaker 2: a Democrat Republican White House and a Republican Senate and

686
00:33:30,560 --> 00:33:31,800
Speaker 2: Congress by thin margins.

687
00:33:31,880 --> 00:33:32,880
Speaker 7: Yes, but still there.

688
00:33:34,000 --> 00:33:36,800
Speaker 2: Given that backdrop, have you and your team made any

689
00:33:36,920 --> 00:33:39,400
Speaker 2: changes to your outlook for investing?

690
00:33:41,000 --> 00:33:45,840
Speaker 13: Normally this would be kind of a textbook exercise, but

691
00:33:46,320 --> 00:33:50,640
Speaker 13: with the nature of President Trump, it's very, very difficult

692
00:33:50,800 --> 00:33:53,520
Speaker 13: to make any kind of projections. And you know he's

693
00:33:53,520 --> 00:33:56,920
Speaker 13: thrown several monkey wrenches into the works. Now there's certainly

694
00:33:56,960 --> 00:34:02,640
Speaker 13: the tariff situation has everybody running and scrambling to analyze

695
00:34:02,680 --> 00:34:04,720
Speaker 13: how this is going to work out. So I would

696
00:34:04,760 --> 00:34:07,360
Speaker 13: say the past playbooks, you really have to throw them

697
00:34:07,400 --> 00:34:10,560
Speaker 13: out and you have to look at something totally different,

698
00:34:10,600 --> 00:34:14,000
Speaker 13: which is the dynamics of tariffs. How is that going

699
00:34:14,040 --> 00:34:18,600
Speaker 13: to influence higher potentially higher interest rates, items like that.

700
00:34:18,880 --> 00:34:22,520
Speaker 13: So we are looking, but I will tell you it's

701
00:34:22,560 --> 00:34:25,000
Speaker 13: almost a fool's errand to try to work through all

702
00:34:25,080 --> 00:34:27,000
Speaker 13: that and come out on the other end of that

703
00:34:27,120 --> 00:34:33,440
Speaker 13: analysis with a highly confident, a highly confident outlook based

704
00:34:33,520 --> 00:34:35,719
Speaker 13: on what the president is going to do.

705
00:34:36,480 --> 00:34:39,120
Speaker 2: So all right, there's high level of uncertainty out there.

706
00:34:39,160 --> 00:34:42,240
Speaker 2: We've heard that from a lot of market participants as well.

707
00:34:42,640 --> 00:34:48,120
Speaker 2: Given that, where are you guys today, stocks, bonds, value, growth,

708
00:34:48,160 --> 00:34:49,839
Speaker 2: How do you position right now?

709
00:34:50,640 --> 00:34:54,239
Speaker 13: Well, I just run a single strategy, and it's a

710
00:34:54,280 --> 00:34:57,759
Speaker 13: growth strategy. Equities, it's an all cap strategy. So what

711
00:34:57,800 --> 00:35:00,480
Speaker 13: we're doing is we're looking at the current home holdings

712
00:35:00,760 --> 00:35:05,360
Speaker 13: and we're asking ourselves how vulnerable are they to policy changes?

713
00:35:05,760 --> 00:35:08,080
Speaker 13: And if there are stocks, in our opinion, that are

714
00:35:08,080 --> 00:35:11,279
Speaker 13: more vulnerable to the uncertainties of those policy changes, we

715
00:35:11,320 --> 00:35:15,239
Speaker 13: would probably look at selling. However, we've reviewed the entire

716
00:35:15,320 --> 00:35:19,880
Speaker 13: portfolio and in our opinion, all these stocks that we hold,

717
00:35:19,960 --> 00:35:26,239
Speaker 13: which are under fifteen in fact, are fairly invulnerable to tariffs,

718
00:35:26,840 --> 00:35:30,120
Speaker 13: to interest rate changes, things of that matter.

719
00:35:30,320 --> 00:35:32,280
Speaker 5: How much of that is going to be, say AI

720
00:35:32,400 --> 00:35:35,640
Speaker 5: and big cap tech, A.

721
00:35:35,680 --> 00:35:39,440
Speaker 13: Lot of big cap tech also. I was a big

722
00:35:40,239 --> 00:35:44,880
Speaker 13: enthusiast of artificial intelligence, namely in Nvidia and super micro

723
00:35:44,960 --> 00:35:47,839
Speaker 13: and some of the others. But we're thinking now that

724
00:35:48,960 --> 00:35:54,719
Speaker 13: the enthusiasm is a little bit overspent. And anticipations of

725
00:35:54,800 --> 00:35:58,520
Speaker 13: how much AI is going to actually accomplish and contribute

726
00:35:58,520 --> 00:36:04,080
Speaker 13: to the bottom line we think is vastly, vastly exaggerated,

727
00:36:04,200 --> 00:36:07,919
Speaker 13: and so we have trimmed those exposures dramatically coming into

728
00:36:07,920 --> 00:36:08,480
Speaker 13: the next year.

729
00:36:09,120 --> 00:36:11,760
Speaker 2: Peter, how many stocks do you own in your portfolio today?

730
00:36:11,840 --> 00:36:12,120
Speaker 1: Roughly?

731
00:36:12,239 --> 00:36:14,920
Speaker 2: Does that in lineer a little bit different in the

732
00:36:14,960 --> 00:36:16,399
Speaker 2: past strategies.

733
00:36:16,880 --> 00:36:21,919
Speaker 13: About well, actually exactly thirteen stocks. Wow, So it's fairly concentrated.

734
00:36:21,960 --> 00:36:24,680
Speaker 13: I don't think you'll find another manager out there that

735
00:36:24,800 --> 00:36:28,920
Speaker 13: runs a concentrated portfolio of that few numbers of stocks.

736
00:36:28,960 --> 00:36:33,080
Speaker 13: So you can imagine that it takes great confidence in

737
00:36:33,120 --> 00:36:36,840
Speaker 13: the holdings and understanding each one, and certainly now with

738
00:36:36,920 --> 00:36:40,319
Speaker 13: the change in administration, it actually puts more of an

739
00:36:40,320 --> 00:36:42,960
Speaker 13: emphasis on that and to try to play out what

740
00:36:43,000 --> 00:36:45,279
Speaker 13: we think is going to happen. So, for instance, you

741
00:36:45,280 --> 00:36:50,360
Speaker 13: mentioned artificial intelligence, but cybersecurity is a major exposure in

742
00:36:50,360 --> 00:36:53,560
Speaker 13: the portfolio, and we think that regardless of who is

743
00:36:53,680 --> 00:36:57,319
Speaker 13: in the administration, or where interest rates are going, or

744
00:36:57,360 --> 00:37:00,000
Speaker 13: if we have one hundred percent tariffs that's been made

745
00:37:00,000 --> 00:37:04,359
Speaker 13: mentioned recently in certain countries, we don't think cybersecurity would

746
00:37:04,360 --> 00:37:06,640
Speaker 13: be impacted by that it just makes common sense to.

747
00:37:06,640 --> 00:37:10,680
Speaker 2: Us thirteen stocks. What's your average holding period? I would

748
00:37:10,680 --> 00:37:13,160
Speaker 2: think once a stock gets in your portfolio, it's not

749
00:37:13,239 --> 00:37:14,000
Speaker 2: going anywhere.

750
00:37:15,000 --> 00:37:15,719
Speaker 6: That is true.

751
00:37:15,719 --> 00:37:20,399
Speaker 13: You know, the turnover is under thirty percent, averaging over

752
00:37:20,480 --> 00:37:24,239
Speaker 13: the past ten years. And we really do spend a

753
00:37:24,239 --> 00:37:26,440
Speaker 13: great deal of time looking at these stocks. And you know,

754
00:37:26,520 --> 00:37:29,880
Speaker 13: compare we sometimes get criticism. Well, you know, it's so concentrated.

755
00:37:30,719 --> 00:37:33,480
Speaker 13: What about your competitors. Your competitor is on anywhere from

756
00:37:33,520 --> 00:37:36,640
Speaker 13: what's say, fifty to one hundred stocks, and we challenge

757
00:37:36,680 --> 00:37:41,000
Speaker 13: them on understanding those holdings in as much detail as

758
00:37:41,160 --> 00:37:43,400
Speaker 13: say a portfolio of under twenty stocks.

759
00:37:44,120 --> 00:37:46,080
Speaker 5: So do you when you talk about the AI trade,

760
00:37:46,120 --> 00:37:48,000
Speaker 5: like when you said that you think that it's an

761
00:37:48,080 --> 00:37:51,200
Speaker 5: over promising one. I'm paraphrasing here, but the expectations are

762
00:37:51,280 --> 00:37:53,640
Speaker 5: just too high. What do you mean by that? Is

763
00:37:53,680 --> 00:37:55,000
Speaker 5: it just that it's not going to be this big

764
00:37:55,040 --> 00:37:57,959
Speaker 5: revolutionary thing or that money eventually will stop being spent

765
00:37:58,040 --> 00:37:58,319
Speaker 5: on it.

766
00:37:58,320 --> 00:37:59,960
Speaker 8: Can you dissect that a little bit more for me?

767
00:38:00,400 --> 00:38:02,760
Speaker 13: Of course? And thank you for asking, because I really

768
00:38:02,760 --> 00:38:05,839
Speaker 13: do think this is a neglected point that investors really

769
00:38:05,920 --> 00:38:09,319
Speaker 13: have to spend some time on. So I think investors

770
00:38:09,400 --> 00:38:12,080
Speaker 13: have gotten a little bit over their skis and thinking

771
00:38:12,120 --> 00:38:15,400
Speaker 13: that AI is going to be the cure all of everything.

772
00:38:15,520 --> 00:38:18,000
Speaker 13: And one thing I can just mention to you is

773
00:38:18,040 --> 00:38:20,880
Speaker 13: if they think there's going to emulate human thought, the

774
00:38:20,920 --> 00:38:23,839
Speaker 13: brain is about the size of two fists. Look at

775
00:38:23,880 --> 00:38:26,759
Speaker 13: the real estate of chat GPT for instance. I mean,

776
00:38:26,800 --> 00:38:31,040
Speaker 13: it's enormous. And now we're thinking of dedicating nuclear power

777
00:38:31,080 --> 00:38:34,520
Speaker 13: plans to powering these things. When the human brain works

778
00:38:34,560 --> 00:38:41,160
Speaker 13: on a refrigerator light bulb wattage under ten watts. So

779
00:38:41,640 --> 00:38:44,960
Speaker 13: we're going down the wrong path. We think in terms

780
00:38:45,040 --> 00:38:49,040
Speaker 13: of formulating artificial intelligence and making it human like, we

781
00:38:49,120 --> 00:38:52,840
Speaker 13: think that that's at least ten or fifteen Nobel prizes away,

782
00:38:53,120 --> 00:38:56,560
Speaker 13: and investors have not caught onto that concept yet, nor

783
00:38:56,680 --> 00:39:00,680
Speaker 13: have certain CEOs. They continue to spend warm us amounts

784
00:39:00,719 --> 00:39:03,799
Speaker 13: of money and when you ask them what the rationale is,

785
00:39:04,160 --> 00:39:07,040
Speaker 13: they say, well, because our competitors are spending just as

786
00:39:07,120 --> 00:39:07,720
Speaker 13: much money.

787
00:39:09,280 --> 00:39:11,000
Speaker 2: All right, Peter, thank you so much for joining us.

788
00:39:11,160 --> 00:39:13,640
Speaker 2: A he's a pleasure chatting with you. Peter Anderson, He's

789
00:39:13,640 --> 00:39:17,040
Speaker 2: a founder and chief investment officer Anderson Capital Management up

790
00:39:17,080 --> 00:39:20,480
Speaker 2: there in the Boston area.

791
00:39:21,400 --> 00:39:25,280
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

792
00:39:25,360 --> 00:39:27,200
Speaker 1: weekdays at ten am Eastern on.

793
00:39:27,239 --> 00:39:30,360
Speaker 9: Applecar Play and Android Auto with the Bloomberg Business.

794
00:39:30,760 --> 00:39:33,640
Speaker 1: You can also listen live on Amazon Alexa from our

795
00:39:33,640 --> 00:39:38,040
Speaker 1: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

796
00:39:39,360 --> 00:39:42,840
Speaker 5: Alex Deel Here alongside Paul Sweeney. This is Bloomberg Intelligence Radio.

797
00:39:42,880 --> 00:39:45,160
Speaker 5: We bring you all the top news in business, economics

798
00:39:45,160 --> 00:39:47,640
Speaker 5: and finance. There are lens of our Bloomberg Intelligence folks.

799
00:39:47,680 --> 00:39:50,200
Speaker 5: They cover two thousand companies and one hundred and thirty

800
00:39:50,200 --> 00:39:53,319
Speaker 5: industries all around the world. Now every Monday around this time,

801
00:39:53,360 --> 00:39:57,760
Speaker 5: we also tap our great resources from Bloomberg BNF formerly

802
00:39:57,800 --> 00:40:01,400
Speaker 5: known as Bloomberg New Energy Finance. They give great industry

803
00:40:01,440 --> 00:40:06,120
Speaker 5: research on power, transport, industry, buildings, AG sectors as well

804
00:40:06,120 --> 00:40:09,440
Speaker 5: as how to navigate change within this energy transition. And

805
00:40:09,440 --> 00:40:11,359
Speaker 5: they look at it from a business and finance lens.

806
00:40:11,360 --> 00:40:14,240
Speaker 5: So joining us now is on week Gonzales, Bloomberg BNIF,

807
00:40:14,320 --> 00:40:16,520
Speaker 5: head of US Gas Research, and we're going to be

808
00:40:16,520 --> 00:40:17,880
Speaker 5: talking about gas.

809
00:40:18,160 --> 00:40:18,319
Speaker 3: Now.

810
00:40:18,400 --> 00:40:20,759
Speaker 5: What's interesting about gas is that we make a lot

811
00:40:20,800 --> 00:40:24,360
Speaker 5: of hay some hey about US oil exports, but in

812
00:40:24,400 --> 00:40:27,440
Speaker 5: actuality it's US gas esport exports in the form of

813
00:40:27,560 --> 00:40:30,960
Speaker 5: LNG that is a huge transformational part of the energy

814
00:40:31,000 --> 00:40:33,959
Speaker 5: story here in the US. Where do we stand now

815
00:40:34,400 --> 00:40:36,200
Speaker 5: and where do you think we stand once President Trump

816
00:40:36,239 --> 00:40:36,800
Speaker 5: takes office?

817
00:40:38,480 --> 00:40:42,600
Speaker 15: Yeah, so, as mentioned, the US is the largest exporter

818
00:40:42,800 --> 00:40:45,960
Speaker 15: of LERG in the world. And in the short term,

819
00:40:46,000 --> 00:40:49,759
Speaker 15: we have a considerable amount of new capacity coming online,

820
00:40:50,360 --> 00:40:54,719
Speaker 15: and that was bound to happen regardless of whether we

821
00:40:54,800 --> 00:40:58,520
Speaker 15: had Trump or Camala in office. But yeah, we have

822
00:40:59,040 --> 00:41:02,520
Speaker 15: Plaque and Minds and the Corpus Christie Stage three expansions

823
00:41:02,560 --> 00:41:06,600
Speaker 15: coming in this December or early next year, and then

824
00:41:07,000 --> 00:41:11,120
Speaker 15: the Golden Pass LNG terminal as well, so giving US

825
00:41:11,239 --> 00:41:16,160
Speaker 15: more than seven bc of the seven billion cubic feed

826
00:41:16,200 --> 00:41:19,600
Speaker 15: per day of export new export capacity out of the US,

827
00:41:19,880 --> 00:41:24,959
Speaker 15: so further consolidating that role. And then where the change

828
00:41:25,000 --> 00:41:27,799
Speaker 15: could be more significant is in the medium term with

829
00:41:27,880 --> 00:41:33,239
Speaker 15: the terminals coming later this decade for it, and especially

830
00:41:34,120 --> 00:41:38,640
Speaker 15: with these discussions of Trump lifting the DOE Non Free

831
00:41:38,640 --> 00:41:43,280
Speaker 15: Trade Agreement permit post because this is a key permit

832
00:41:43,400 --> 00:41:47,520
Speaker 15: that the terminal terminals need to be able to reach

833
00:41:47,560 --> 00:41:50,880
Speaker 15: their final investment decision. And there's a few high profile

834
00:41:51,440 --> 00:41:57,000
Speaker 15: projects there, such as the the CP two expansion from

835
00:41:57,160 --> 00:41:59,960
Speaker 15: Entry Global, and then we also have a sabine Pas

836
00:42:00,280 --> 00:42:04,680
Speaker 15: Corpus Christi expansion alongside other projects that are targeted for them.

837
00:42:04,840 --> 00:42:07,680
Speaker 5: So basically, if you're not exporting energy to a free

838
00:42:07,719 --> 00:42:10,120
Speaker 5: trade agreement country, then you're no longer allowed to exit

839
00:42:10,239 --> 00:42:11,799
Speaker 5: to do it. But many said that was like an

840
00:42:11,800 --> 00:42:14,880
Speaker 5: export thing that they were doing that really wasn't going

841
00:42:14,920 --> 00:42:16,759
Speaker 5: to hold. It was just an election thing. So that's

842
00:42:16,760 --> 00:42:18,600
Speaker 5: what we're referring to. So that would really help get

843
00:42:18,600 --> 00:42:20,319
Speaker 5: a lot more investment in.

844
00:42:20,360 --> 00:42:24,040
Speaker 7: There is the expectation in your world of natural gas

845
00:42:24,120 --> 00:42:29,719
Speaker 7: that a Trump administration combined with republic controlled Congress, this

846
00:42:29,800 --> 00:42:32,400
Speaker 7: is going to be the time to get stuff done,

847
00:42:32,440 --> 00:42:36,760
Speaker 7: whether it's a pipeline or refinery or anything.

848
00:42:37,880 --> 00:42:38,120
Speaker 13: You know.

849
00:42:38,200 --> 00:42:42,759
Speaker 15: Going back to the idea of the LERG terminals, it's definitely, yeah,

850
00:42:42,840 --> 00:42:45,480
Speaker 15: you have more support to get this project still one.

851
00:42:45,960 --> 00:42:49,680
Speaker 15: I think moving to the idea of pipelines new like

852
00:42:50,640 --> 00:42:54,600
Speaker 15: interstate pipelines, that's a bigger There needs to be more change,

853
00:42:54,640 --> 00:42:59,359
Speaker 15: It's a bigger conversation, but it is there's definitely more

854
00:42:59,400 --> 00:43:02,080
Speaker 15: momentum that we would have otherwise had.

855
00:43:02,320 --> 00:43:04,319
Speaker 5: So to that point and it's a good one that

856
00:43:04,360 --> 00:43:05,759
Speaker 5: you make because a lot of the gas that we

857
00:43:05,840 --> 00:43:07,799
Speaker 5: have is in Appalaysia and it's really hard to get

858
00:43:07,800 --> 00:43:09,480
Speaker 5: that gas out. It's in the northeast, you don't have

859
00:43:09,480 --> 00:43:11,480
Speaker 5: a lot of takeaway capacity, and you do get a

860
00:43:11,520 --> 00:43:15,280
Speaker 5: ton of gas from also shale productions, so within New Mexican,

861
00:43:15,760 --> 00:43:17,719
Speaker 5: within New Mexico as well as Texas. So there is

862
00:43:17,719 --> 00:43:21,040
Speaker 5: that What do you think we're going to be able

863
00:43:21,080 --> 00:43:23,680
Speaker 5: to do in terms of getting pipelines in to get

864
00:43:23,800 --> 00:43:25,279
Speaker 5: gas out of Appalachia.

865
00:43:26,760 --> 00:43:29,640
Speaker 15: Yeah, so I would say that's not my subject matter

866
00:43:29,719 --> 00:43:35,200
Speaker 15: expertise the policy behind the pipelines, but I think there

867
00:43:35,239 --> 00:43:38,680
Speaker 15: is space to have more discussions about what can be

868
00:43:38,760 --> 00:43:39,960
Speaker 15: done to get some more.

869
00:43:40,120 --> 00:43:42,000
Speaker 5: Gas from But if we don't, we wind up getting

870
00:43:42,000 --> 00:43:44,000
Speaker 5: a glut at some point of gas because there's just

871
00:43:44,040 --> 00:43:46,240
Speaker 5: too much we can't get it out. Therefore, gas prices

872
00:43:46,239 --> 00:43:47,560
Speaker 5: here in the US kind of really sink.

873
00:43:47,920 --> 00:43:51,000
Speaker 15: Yeah, and when we've already seen this happen, especially this

874
00:43:51,160 --> 00:43:56,120
Speaker 15: early November when the weather was pretty warm, we've seen, yeah,

875
00:43:56,200 --> 00:43:59,280
Speaker 15: Appalachia can't really send more gas out, there's no internal

876
00:43:59,320 --> 00:44:03,400
Speaker 15: demand in the Bay. And then we've seen producers actually

877
00:44:03,480 --> 00:44:09,080
Speaker 15: Curtel production because the prices have dropped below the level

878
00:44:09,120 --> 00:44:12,840
Speaker 15: they need to continue producing even from existing wells, and

879
00:44:12,880 --> 00:44:16,440
Speaker 15: they're well below the break events in some cases for

880
00:44:17,000 --> 00:44:20,640
Speaker 15: new wells. So we've already seen that have an impact

881
00:44:20,920 --> 00:44:25,600
Speaker 15: in production in Appalaysia and as well in other parts

882
00:44:25,640 --> 00:44:28,000
Speaker 15: of the country. You have the Haynes Bill as well,

883
00:44:28,000 --> 00:44:32,200
Speaker 15: that's closer to the Gulf and where a lot of

884
00:44:32,200 --> 00:44:35,160
Speaker 15: the rhetoric is that we the production to meet the

885
00:44:35,200 --> 00:44:37,839
Speaker 15: demand from these new Allen g terminals is going to

886
00:44:37,840 --> 00:44:40,480
Speaker 15: come from there due to the location, but they do

887
00:44:40,600 --> 00:44:45,799
Speaker 15: have higher break events and higher costs than in the Northeast.

888
00:44:46,560 --> 00:44:46,880
Speaker 3: Coal.

889
00:44:47,239 --> 00:44:49,520
Speaker 2: What's going on with coal and what do you expect

890
00:44:49,560 --> 00:44:52,360
Speaker 2: under Trump administration? Happened to the coal industry in this country.

891
00:44:53,040 --> 00:44:56,000
Speaker 15: Yes, so there's been a lot of discussion now about

892
00:44:56,440 --> 00:45:00,799
Speaker 15: potentially rolling back some rules from the e or just

893
00:45:00,840 --> 00:45:06,560
Speaker 15: having being easier on pollution from coal. I've seen I

894
00:45:06,560 --> 00:45:10,000
Speaker 15: think it was Duke Energy as well discuss the possibility

895
00:45:10,040 --> 00:45:13,680
Speaker 15: of keeping some of their coal plants operating for longer.

896
00:45:15,280 --> 00:45:18,799
Speaker 15: So that is a possibility and what it could mean

897
00:45:18,840 --> 00:45:22,960
Speaker 15: for gas and for power sector gas consumption could be

898
00:45:23,000 --> 00:45:26,279
Speaker 15: pretty interesting because over the last ten years, one of

899
00:45:25,719 --> 00:45:28,680
Speaker 15: the main roles of gas in the power sector has

900
00:45:28,719 --> 00:45:35,359
Speaker 15: also been replacing right this retiring cult coal plants, which

901
00:45:35,360 --> 00:45:37,719
Speaker 15: has been a benefit in the sense that we've seen

902
00:45:38,080 --> 00:45:43,480
Speaker 15: lower emissions as well. But this could be more difficult.

903
00:45:43,880 --> 00:45:46,920
Speaker 15: If the coal plants stay operating longer, you might not

904
00:45:47,000 --> 00:45:51,480
Speaker 15: see gas taking over in the same way it hadn't been.

905
00:45:51,880 --> 00:45:52,560
Speaker 8: That's interesting.

906
00:45:52,960 --> 00:45:57,280
Speaker 5: That would remove like this very mechanical market function basically

907
00:45:57,560 --> 00:46:01,800
Speaker 5: for gas and coal. Is the coal Is it green coal,

908
00:46:01,920 --> 00:46:04,200
Speaker 5: is it like nice coal that we can all get behind,

909
00:46:04,280 --> 00:46:06,399
Speaker 5: or is it still dirty coal that eventually is just going.

910
00:46:06,400 --> 00:46:07,319
Speaker 8: To have to be phased out.

911
00:46:08,600 --> 00:46:12,520
Speaker 15: Yeah, there's a lot of discussion as well about integrating

912
00:46:12,600 --> 00:46:16,960
Speaker 15: carbon capture for coal, try to make make it cleaner,

913
00:46:18,000 --> 00:46:21,319
Speaker 15: but yeah, the economics are difficult, and especially in the

914
00:46:21,360 --> 00:46:25,960
Speaker 15: short term, we probably won't see a lot of that happen,

915
00:46:26,440 --> 00:46:31,040
Speaker 15: so it could result in emissions even increasing.

916
00:46:32,239 --> 00:46:34,320
Speaker 2: Is there the expectation on our Trump administration is that

917
00:46:34,440 --> 00:46:37,160
Speaker 2: just a whole move to renewables will slow down, maybe

918
00:46:37,160 --> 00:46:41,120
Speaker 2: slow down materially or is it just too much momentum.

919
00:46:41,360 --> 00:46:46,360
Speaker 15: Yeah, No, definitely, parts for example, of the Inflation Reduction

920
00:46:46,520 --> 00:46:52,160
Speaker 15: Act or are repealed, or there's some changes in that sense,

921
00:46:52,160 --> 00:46:57,080
Speaker 15: we could see slower deployment of renewables. My colleagues in

922
00:46:57,200 --> 00:47:01,200
Speaker 15: ven f IN or Clean Energy Tea look in a

923
00:47:01,200 --> 00:47:05,160
Speaker 15: lot of detail into this, but yeah, this could lead

924
00:47:05,160 --> 00:47:09,400
Speaker 15: to an interesting dynamic where you have less coal retirements,

925
00:47:09,400 --> 00:47:14,080
Speaker 15: but maybe you have a slower deployment of renewables where

926
00:47:14,160 --> 00:47:17,960
Speaker 15: GUS maybe doesn't grow because there's a less coal, but

927
00:47:18,560 --> 00:47:22,520
Speaker 15: takes over some of this generation that would be needed

928
00:47:23,040 --> 00:47:26,359
Speaker 15: that would otherwise come from renewables. So I think there's

929
00:47:26,440 --> 00:47:30,880
Speaker 15: a very interesting, very interesting analysis and a conversation to

930
00:47:30,960 --> 00:47:33,600
Speaker 15: have about how this gap is going to look.

931
00:47:33,680 --> 00:47:36,279
Speaker 5: All right, Amikay, thanks a lot, Arika Gonzalez, Bloomberg b

932
00:47:36,400 --> 00:47:39,920
Speaker 5: Andy apphead of US Gas Research, Thank you so very much.

933
00:47:40,400 --> 00:47:44,880
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934
00:47:45,120 --> 00:47:48,319
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935
00:47:48,320 --> 00:47:51,680
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936
00:47:51,800 --> 00:47:55,200
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937
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938
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