WEBVTT - Markets, Fintech, Cars, And Ice Cream 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:24.239 at Bloomberg dot com slash podcast. Coming into a lot 0:00:24.239 --> 0:00:26.920 of strategists, a lot of fund managers were saying, get 0:00:26.960 --> 0:00:30.280 ready for increased of volatility, and boy, it seems like 0:00:30.360 --> 0:00:32.199 at least for their first four weeks, they were right. Here, 0:00:32.200 --> 0:00:35.920 we've got a vix north of thirty one, we've got 0:00:35.920 --> 0:00:38.239 read on the screen here today, let's check in uh 0:00:38.240 --> 0:00:40.800 and see what we can expect going forward. Liz Young, 0:00:41.520 --> 0:00:45.159 she's head of investment strategy at so Far. Liz, thanks 0:00:45.200 --> 0:00:47.879 so much for joining us here. I guess one of 0:00:47.920 --> 0:00:50.560 the big issues you know that this market is trying 0:00:50.600 --> 0:00:54.000 to discount is the Federal Reserve. We know they're gonna 0:00:54.040 --> 0:00:56.880 raise rates, but now the question is by how much? 0:00:56.960 --> 0:01:01.600 How quickly? How do you guys think about that? Yeah? 0:01:01.640 --> 0:01:03.320 You know, I think first of all, you have to 0:01:03.360 --> 0:01:06.560 look at what the expectations are right now. And the 0:01:06.640 --> 0:01:09.480 reality of it is, we haven't moved yet, right. The 0:01:09.520 --> 0:01:12.520 Fed hasn't done anything yet, and they also haven't been 0:01:12.920 --> 0:01:15.520 all that clear about what they expect to have to 0:01:15.600 --> 0:01:18.960 do as far as rate hikes go. So it continues 0:01:19.040 --> 0:01:22.240 to be an uncertain and sort of convoluted picture, which 0:01:22.280 --> 0:01:25.199 is why the market is having so much trouble digesting 0:01:25.200 --> 0:01:27.440 it on a day to day basis. I think what 0:01:27.640 --> 0:01:31.880 actually happens is that they start to hike rates in 0:01:32.040 --> 0:01:34.200 spring of this year, but they're going to have to 0:01:34.200 --> 0:01:39.120 wait and see how much it affects things like inflation expectations, 0:01:39.120 --> 0:01:41.520 how much it affects things like the bond market. I 0:01:41.520 --> 0:01:43.280 think everybody's really hung up on how it's going to 0:01:43.360 --> 0:01:45.959 affect the equity market. But they're probably going to watch 0:01:45.959 --> 0:01:50.000 the bond market closer and then decide how much further 0:01:50.080 --> 0:01:51.880 they need to go with hikes through the rest of 0:01:51.920 --> 0:01:56.200 the year, so they'll remain basically data dependent UM, but 0:01:57.360 --> 0:02:00.600 I wonder how much they will care about they market. 0:02:00.840 --> 0:02:05.680 We were UM interviewing Greg Jensen from UM Bridgewater the 0:02:05.720 --> 0:02:08.040 other day and he said he thinks right now that's 0:02:08.080 --> 0:02:11.400 really not their main concern. In fact, um, the equity 0:02:11.440 --> 0:02:14.080 market they're probably a lot of speculative bubbles that have 0:02:14.120 --> 0:02:15.919 been blown up there that the Fed wooden't mind seeing 0:02:16.000 --> 0:02:20.120 deflated a little bit. Yeah, you know, I don't know 0:02:20.160 --> 0:02:24.600 that they're tasked with necessarily worrying about the speculative bubbles, 0:02:24.639 --> 0:02:27.920 but I would agree that they're not seeing the equity 0:02:27.919 --> 0:02:31.520 market as their first priority. And I said this on 0:02:31.560 --> 0:02:33.680 a show earlier this week. The Fed doesn't care about 0:02:33.680 --> 0:02:36.280 our feelings anymore, and I think that that's going to 0:02:36.360 --> 0:02:38.920 be the case. And you know, the equity market last year, 0:02:39.000 --> 0:02:41.880 we're looking at the SMP, it made seventy new all 0:02:41.960 --> 0:02:44.640 time highs. That's a pretty good place to come into 0:02:44.680 --> 0:02:47.600 the year on. So we can afford a pullback here. 0:02:48.040 --> 0:02:51.720 And the Fed's main mandate is to control prices, maintain 0:02:51.800 --> 0:02:56.000 stable prices, and maximum employment. So those are priorities number 0:02:56.040 --> 0:02:59.560 one and number two. The employment boxes all but checked, 0:02:59.680 --> 0:03:02.680 and now we're on two prices. Obviously there's an inflation 0:03:02.760 --> 0:03:04.799 problem that they need to deal with. I think that 0:03:04.840 --> 0:03:07.679 they're going to let the equity markets see volatility and 0:03:07.720 --> 0:03:09.720 they're not going to react to that unless it starts 0:03:09.760 --> 0:03:13.359 to threaten financial stability, which again ends up actually being 0:03:13.400 --> 0:03:16.440 more about the bond markets and the equity market. So 0:03:16.440 --> 0:03:18.040 what do you think we might see that the ten 0:03:18.120 --> 0:03:20.040 years it's gonna hit two percent before it hits one 0:03:20.040 --> 0:03:23.840 point five percent. How do you think about that, Liz? Yeah, 0:03:23.880 --> 0:03:25.720 you know, well, we've seen a huge run up in 0:03:25.720 --> 0:03:28.519 the ten year already this year, at thirty basis points 0:03:28.560 --> 0:03:31.560 since the beginning of the year, and that's pretty swift, 0:03:31.720 --> 0:03:34.120 which I think is another reason why the equity market 0:03:34.120 --> 0:03:37.080 is seeing so much of volatility. It has trouble with 0:03:37.200 --> 0:03:40.720 big spikes and yields. But I do think we could 0:03:40.720 --> 0:03:42.840 touch too. I think we could get above two and 0:03:42.920 --> 0:03:46.240 actually get even closer to two and a quarter before 0:03:46.320 --> 0:03:48.800 things sort of level out. Now we might have a 0:03:48.840 --> 0:03:51.920 little bit of a pause here because now the interesting 0:03:51.960 --> 0:03:54.240 part is we're in this waiting period. We're not going 0:03:54.280 --> 0:03:56.560 to hear from the Fed again until March sixteenth, and 0:03:56.600 --> 0:03:59.080 that's when everybody expects the first rate hike to happen. 0:03:59.360 --> 0:04:01.680 So there's a long period of time between now and 0:04:01.720 --> 0:04:04.000 then where the market has to kind of tredge through 0:04:04.040 --> 0:04:07.040 this uncertainty, and we might bounce around in a range 0:04:07.040 --> 0:04:09.200 on the tenure. But I think as we get closer 0:04:09.200 --> 0:04:11.640 and closer to rate hikes, you'll see the tenure get 0:04:11.720 --> 0:04:13.840 higher again, and I really do think that we can 0:04:13.840 --> 0:04:15.640 get above two in the first half of the year. 0:04:15.720 --> 0:04:17.680 Do you have any concern that we see I mean, 0:04:18.520 --> 0:04:20.760 I've looked back at rate hikes cycles for the last 0:04:20.760 --> 0:04:26.480 twenty years and you always get um the curve flattening, 0:04:26.920 --> 0:04:29.800 sometimes inverting. Is that a concern here? And do you 0:04:29.839 --> 0:04:36.120 think we'll hit a recession in Well, we've seen flattening 0:04:36.160 --> 0:04:39.839 already in the curve since Poul's statements earlier this week, 0:04:39.960 --> 0:04:42.599 So I think that the spread went from somewhere in 0:04:42.800 --> 0:04:45.760 the eight basis point basis point range down to the 0:04:45.920 --> 0:04:50.200 low sixties. Still pretty far from inverting. But that is 0:04:50.240 --> 0:04:51.839 one of those measures that I think the feed is 0:04:51.839 --> 0:04:55.000 going to watch. They don't necessarily watch the two tens. 0:04:55.040 --> 0:04:58.599 They might watch a shorter term measure versus the tenure, 0:04:59.000 --> 0:05:01.240 but they're not going to want the curve to invert, 0:05:01.400 --> 0:05:04.560 and they're very aware of that dynamic in the market. 0:05:04.880 --> 0:05:07.160 I don't think one or two rate hikes is going 0:05:07.160 --> 0:05:09.839 to invert the curve. But that's why I think, you know, 0:05:09.880 --> 0:05:12.400 the market suggesting that we're going to have five or 0:05:12.800 --> 0:05:15.039 more rate hikes this year is a little ahead of 0:05:15.040 --> 0:05:18.440 itself because that would probably cause an inversion, and I 0:05:18.480 --> 0:05:20.200 don't think the FET is going to do that, so 0:05:20.440 --> 0:05:22.320 they're going to keep their eye on it. I don't 0:05:22.360 --> 0:05:25.240 see a recession coming. I think Jerome Powell has been 0:05:25.839 --> 0:05:28.920 very careful trying to thread this needle, and he's going 0:05:28.960 --> 0:05:32.080 to continue to be careful. The idea is to allow 0:05:32.120 --> 0:05:35.200 the recovery to continue. Uh. One of the ways that 0:05:35.240 --> 0:05:37.200 you allow it to continue is to make sure that 0:05:37.200 --> 0:05:40.240 inflation doesn't get in the way. Liz thirty seconds kind 0:05:40.240 --> 0:05:42.720 of what's your best idea for where to be here 0:05:42.720 --> 0:05:46.240 in this rising interest rade environment? I mean you want 0:05:46.240 --> 0:05:49.320 to look at short duration assets that goes for equities, 0:05:49.400 --> 0:05:52.320 you know, thinking about UM, some of those cyclical sectors, 0:05:52.320 --> 0:05:54.120 some of the dividend payers that are going to do 0:05:54.160 --> 0:05:56.840 well here in the short term with volatility. I'd also 0:05:56.880 --> 0:05:59.640 look at health care for a long term idea. And 0:05:59.760 --> 0:06:02.159 in national I think this is the year where international 0:06:02.200 --> 0:06:07.560 investing has a revival, both in narrative and returns. Alright, Liz, 0:06:07.600 --> 0:06:10.040 thanks so much for joining us. A pleasure having you 0:06:10.080 --> 0:06:13.400 on and UM it's exciting to see what's going on 0:06:13.680 --> 0:06:16.400 at so far as well. So great to get your 0:06:16.400 --> 0:06:19.839 take this morning. Liz Young there, she is the head 0:06:19.839 --> 0:06:23.320 of investment strategy for so Far, and that is a 0:06:23.320 --> 0:06:26.520 business that it's growing. We saw them um get more 0:06:26.560 --> 0:06:30.680 licensed bank over the last week and so um they're 0:06:30.720 --> 0:06:34.840 offering uh, just a huge platform full of products. Uh 0:06:34.839 --> 0:06:36.680 and I guess the kids. It's just it's not just 0:06:36.760 --> 0:06:39.000 the kids anymore. I don't think so. I think I'm 0:06:39.040 --> 0:06:41.279 seeing a lot more about it, and uh, I think 0:06:41.279 --> 0:06:48.120 it's a certainly great option financial services. No, Matt, we 0:06:48.200 --> 0:06:51.920 talk a lot about fintech, financial technology, we talk a 0:06:51.960 --> 0:06:54.840 lot about crypto, but it's just it just seems to 0:06:54.880 --> 0:06:58.599 me that some of the traditional financial institutions are just 0:06:58.720 --> 0:07:01.880 slow to embrace the whole fintech thing. It just feels 0:07:01.880 --> 0:07:03.080 that way to me. I'm not sure that's look at 0:07:03.640 --> 0:07:06.400 look at the so Far exactly right. We're just talking 0:07:06.520 --> 0:07:08.839 to the so Far analyst. But you know, I saw 0:07:08.880 --> 0:07:11.440 the news recently that UBS agrees to buy robo advisor 0:07:11.440 --> 0:07:13.760 wealth Front, uh, kind of a fintech player, for at 0:07:13.800 --> 0:07:15.920 one point four billions. So that kind of gets your attention. 0:07:15.920 --> 0:07:18.240 But I'm gonna get a sense of how some of 0:07:18.240 --> 0:07:22.480 these traditional financial institutions are thinking about embracing and investing 0:07:22.520 --> 0:07:25.440 in financial technology. You can talk about that with Robin Vince, 0:07:25.520 --> 0:07:29.800 vice chair and CEO of Global Market Infrastructure for B 0:07:30.080 --> 0:07:33.040 and Y. Melon. Robin, you've been in the financial services 0:07:33.080 --> 0:07:38.360 industry for decades. You've seen it evolve. Do you feel 0:07:38.360 --> 0:07:43.960 like the traditional banks, financial institutions are fully embracing kind 0:07:44.000 --> 0:07:49.840 of fintech, crypto, some of the new changes in financial services. Well, first, 0:07:49.920 --> 0:07:52.200 it's great to be with you today, Paul and Matt 0:07:52.440 --> 0:07:54.280 um here here are being why Melon, We love the 0:07:54.320 --> 0:07:56.920 show and I'm speaking you to you today from our 0:07:57.000 --> 0:08:00.679 headquarters here in downtown New York City, which is really 0:08:00.680 --> 0:08:03.000 one of the centers of innovation that we've seen in 0:08:03.000 --> 0:08:06.240 the financial world over the course of our history of 0:08:06.240 --> 0:08:10.720 two and thirty seven years. But look to the point 0:08:10.760 --> 0:08:13.960 of old firms versus new we don't see it in 0:08:14.000 --> 0:08:18.040 that binary way. We just view our position at the 0:08:18.200 --> 0:08:22.960 very harder financial infrastructure allowing us to really be an innovator. Look, 0:08:23.240 --> 0:08:27.040 we touch one fifth of the world's investible assets, We 0:08:27.120 --> 0:08:30.640 service a super majority of global institutions, and so we're 0:08:30.680 --> 0:08:34.320 super well positioned at that exact intersection of the trust 0:08:34.360 --> 0:08:36.840 that we have from our franchise and that gives us 0:08:36.880 --> 0:08:39.800 the ability to innovate, and you can see that in 0:08:39.800 --> 0:08:41.760 a in a whole bunch of different things that we've 0:08:41.800 --> 0:08:45.680 been doing. We announced a crypto custody effort at the 0:08:45.679 --> 0:08:49.400 beginning of last year, the effort into e bills that 0:08:49.480 --> 0:08:52.160 we're doing with Verizon. There's just a whole long list 0:08:52.200 --> 0:08:54.000 of things that we're doing. And frankly, we think it's 0:08:54.000 --> 0:08:57.320 a strength to have the established franchise that we do 0:08:57.480 --> 0:09:00.719 today along with that innovation. Sure. I mean, I was 0:09:00.720 --> 0:09:02.319 gonna say in a lot of ways, b n Y 0:09:02.400 --> 0:09:04.840 Melon is on the cutting edge of this stuff. And 0:09:04.880 --> 0:09:08.480 you have been UM leaders. Tom Keane would probably say 0:09:08.480 --> 0:09:13.200 something like on the avant garde, UM, but you don't 0:09:13.600 --> 0:09:17.520 see that much enthusiasm from the rest of the street 0:09:17.559 --> 0:09:21.000 compared to UM where you see it in the city, 0:09:21.120 --> 0:09:25.280 where you see it in Miami. Um, what do you 0:09:25.320 --> 0:09:28.360 think we're gonna we're gonna end up with here? I mean, 0:09:28.720 --> 0:09:31.800 it's not gonna be just old Wall Street banks running 0:09:31.880 --> 0:09:37.040 our finances in the future. So uh, it's going to 0:09:37.120 --> 0:09:39.640 be a best of both worlds. And we welcome the 0:09:39.720 --> 0:09:43.920 competition and frankly, the push that all of these fintech 0:09:44.120 --> 0:09:47.160 and new industry players are really providing into the space. 0:09:47.360 --> 0:09:51.760 But for us, it's about taking that client franchise, we've 0:09:51.760 --> 0:09:53.640 got the trust that we enjoy with our clients and 0:09:53.640 --> 0:09:55.440 then innovating. So let me give you an example. So 0:09:55.559 --> 0:09:59.360 we we announced late last year the industry first collaboration 0:09:59.400 --> 0:10:02.760 with Verizon on real time e builds and payments for 0:10:02.920 --> 0:10:07.000 US retail clients. Now we're America's oldest bank, but we're 0:10:07.040 --> 0:10:10.640 the first bank to do real time payments and real 0:10:10.679 --> 0:10:14.840 time request for payments, which is enabling for the first time, 0:10:15.400 --> 0:10:21.160 real direct, real time payments from a consumer to a business, 0:10:21.200 --> 0:10:24.880 cutting out the interchange fees, cutting out the inefficiency, cutting 0:10:24.880 --> 0:10:29.679 out the environmental negative footprint of paper and fuel. And 0:10:29.760 --> 0:10:32.920 so that's a great example of exactly that type of innovation. 0:10:33.080 --> 0:10:35.079 And I'm gladn't to Fintake that did it. It was us. 0:10:35.160 --> 0:10:37.960 I'm glad you mentioned the environmental aspect because E s 0:10:38.000 --> 0:10:39.880 G has been kind of a buzzword and I'm sure 0:10:39.880 --> 0:10:41.640 there's going to be a lot of greenwashing. But you're 0:10:41.679 --> 0:10:46.640 also pushing for more diversity, to include women in your 0:10:47.120 --> 0:10:50.960 higher ranks to advanced junior bankers. Tell us about that 0:10:50.960 --> 0:10:52.880 push because it's really taken on a lot of meaning 0:10:52.880 --> 0:10:57.240 this year or last year. Yeah, and it really is 0:10:57.600 --> 0:10:59.840 a critical point. We have one of the most diverse 0:11:00.080 --> 0:11:02.600 boards in the industry and we're super proud of that. 0:11:03.120 --> 0:11:06.200 For the fifteenth consecutive year, we received a score of 0:11:06.240 --> 0:11:11.000 a hundred on the Human Rights Campaign Foundations Corporate Equality Index. 0:11:11.040 --> 0:11:13.160 It's the fifth year in the row that BN Y 0:11:13.200 --> 0:11:18.160 Melons included in the Bloomberg Gender Equality Index, and we're 0:11:18.200 --> 0:11:21.120 really proud to be named as one of those firms. 0:11:21.120 --> 0:11:23.720 It's really driving the equity and inclusion, and we're doing 0:11:23.760 --> 0:11:26.600 it at the top, and we're doing it through the organization, 0:11:26.760 --> 0:11:29.880 and it's the only way to be competitive over the 0:11:29.920 --> 0:11:32.080 course of the coming years, as well as being the 0:11:32.200 --> 0:11:34.640 right thing to do. Yeah, Robin, I worked on Wall 0:11:34.640 --> 0:11:36.200 Street for a long time and what I found in 0:11:36.240 --> 0:11:38.920 my experience and then even managing a business here at 0:11:39.200 --> 0:11:41.679 Bloomberg is you know you can bring in if you 0:11:41.679 --> 0:11:44.360 look at the entering analysts class at any investment bank, 0:11:44.400 --> 0:11:48.200 any financement institution UM over the last decade plus, it 0:11:48.240 --> 0:11:51.920 will look very representative of the marketplace. It will have 0:11:52.040 --> 0:11:55.200 a proper diversity UM. But then when you get up 0:11:55.240 --> 0:11:58.559 to the managing director ranks, the partner ranks. That's where 0:11:58.640 --> 0:12:03.079 the you know, the real glaring disparities you kind of 0:12:03.120 --> 0:12:06.440 show themselves. How do you think if an institutions can 0:12:06.480 --> 0:12:11.560 do to kind of improve that trend? Were You're right 0:12:11.760 --> 0:12:15.679 that that is the challenge. Being able to hire full 0:12:15.800 --> 0:12:19.720 range of diversity at the entry level is obviously sort 0:12:19.720 --> 0:12:23.839 of table stakes at this point. It's about development and 0:12:24.400 --> 0:12:28.640 retention and what what goes into development and retention. That's 0:12:28.720 --> 0:12:34.359 ultimately about opportunity training, giving people not only the pay 0:12:34.400 --> 0:12:37.800 but also the interesting problems to solve, and that for 0:12:37.920 --> 0:12:40.000 us is one of the things that we're very proud of. 0:12:40.240 --> 0:12:43.280 We have forty six trillion dollars worth of assets under custody. 0:12:43.400 --> 0:12:48.080 We touched twenty percent of the world's investible assets. We 0:12:48.160 --> 0:12:51.760 put ten trillion dollars of US treasuries through our platform 0:12:51.880 --> 0:12:56.160 every day, and we have this incredible franchise where we're 0:12:56.160 --> 0:13:01.760 proud to call fortune companies, uh, you know, our clients 0:13:01.760 --> 0:13:04.559 and of the top one hundred banks. And so when 0:13:04.600 --> 0:13:07.800 you have that type of relevance and you have interesting 0:13:07.840 --> 0:13:11.000 opportunities and problems for people to solve, that's how you 0:13:11.160 --> 0:13:14.120 retain great people through the life of their careers. Can 0:13:14.160 --> 0:13:16.000 I can I just get your take on the health 0:13:16.040 --> 0:13:18.600 of New York City? UM to finish up, because you're 0:13:18.640 --> 0:13:21.560 involved in civic service here in New York as well, 0:13:21.880 --> 0:13:24.360 and you mentioned at the top, do you think New 0:13:24.440 --> 0:13:27.880 York City is bouncing back from this pandemic with strength? 0:13:29.280 --> 0:13:31.360 With a bank of New York, We're never going to 0:13:31.440 --> 0:13:34.000 bet against New York City. And you know, I sit 0:13:34.040 --> 0:13:36.600 here in our office today in downtown New York and 0:13:36.600 --> 0:13:39.520 of course we're having to all deal with the challenges 0:13:39.640 --> 0:13:43.119 that Macron has presented to us all. But I'm excited 0:13:43.320 --> 0:13:45.280 for the fact that we're going to be welcoming our 0:13:45.320 --> 0:13:47.559 people back to the office in due course. And I'm 0:13:47.559 --> 0:13:49.679 a believer in the fact that the world has changed 0:13:50.120 --> 0:13:53.240 and it won't be five days a week, every day, 0:13:53.280 --> 0:13:55.800 everyone in the office all the time. We're going to 0:13:55.920 --> 0:13:58.240 take advantage of all these learnings that we've had over 0:13:58.240 --> 0:13:59.800 the course of the past couple of years. We're going 0:13:59.880 --> 0:14:02.360 to be a more hybrid organization that's going to go 0:14:02.400 --> 0:14:04.640 back to your prior point about retention. It's going to 0:14:04.720 --> 0:14:07.520 be important for that. But at the same time, being 0:14:07.559 --> 0:14:10.840 in the office some of the time at least together 0:14:11.320 --> 0:14:13.960 and contributing to the vibrancy of the city, but also 0:14:14.040 --> 0:14:17.720 contributing to that sense of culture and community, developing people, 0:14:17.760 --> 0:14:20.680 making them excited to be here. That's ultimately what our 0:14:20.720 --> 0:14:23.000 future looks like. All right, Robin, thank you so much 0:14:23.080 --> 0:14:25.360 for taking the time to join us. To really appreciate 0:14:25.360 --> 0:14:29.400 getting your perspective. Uh boy, long time at Goldman Saxon. 0:14:29.400 --> 0:14:32.120 Now at the Bank of New York, Melon, Robin Vince, 0:14:32.200 --> 0:14:35.280 Vice Chair and CEO of Global Market Infrastructure at b 0:14:35.480 --> 0:14:38.960 n Y Melon, and you know, a good broad perspective 0:14:38.960 --> 0:14:42.840 of financial services, um, and the pivot towards the I guess, 0:14:42.880 --> 0:14:46.960 the embracing of financial technology and in the office. Yeah, 0:14:47.040 --> 0:14:49.080 and in the office, I mean I think you know, 0:14:49.120 --> 0:14:51.640 the city is going to be coming back pretty aggressively 0:14:51.680 --> 0:14:57.280 over the next several weeks and months. We are going 0:14:57.320 --> 0:15:00.120 to talk a little bit about robots, and I will 0:15:00.240 --> 0:15:03.360 uh well, bringing Laura right right now. Um. She is 0:15:03.720 --> 0:15:08.240 a reporter slash producer, UM woman about town out of 0:15:08.280 --> 0:15:12.480 London and uh a friend of mine, I will say. Also, 0:15:12.680 --> 0:15:15.000 one of my good friends from San Francisco is going 0:15:15.040 --> 0:15:18.200 to join us, Ed Ludlow. He covers all things tech 0:15:18.560 --> 0:15:22.480 plus Tesla and Rivian for us. So the e V sector, 0:15:22.520 --> 0:15:26.280 I guess that includes Lucid and Nicola And looking at 0:15:26.280 --> 0:15:28.560 the stocks are they've been under pressure here, boy, they 0:15:28.600 --> 0:15:31.520 have been. And um, why don't we kick it off 0:15:31.600 --> 0:15:34.000 first with Laura because Tesla came out with earnings and 0:15:34.040 --> 0:15:38.560 they were a bit disappointing. Um in that UM, I 0:15:38.600 --> 0:15:43.360 guess the numbers themselves weren't so bad. Um, but the 0:15:43.440 --> 0:15:47.520 production plan doesn't seem to be anywhere near where we 0:15:47.560 --> 0:15:50.400 thought it should be, right Laura, Yeah, that's right, Matt. Well, 0:15:50.440 --> 0:15:55.080 the operational factories in Fremont, California and Shanghai, we learned 0:15:55.080 --> 0:15:59.040 that they've been under producing. The nightmare supply chain crunch 0:15:59.120 --> 0:16:02.320 that Elon Musk tweeted about at the end of last 0:16:02.400 --> 0:16:06.160 year has seemed to become a reality. So we knew 0:16:06.240 --> 0:16:10.520 going into these results right that Tesla had achieved record deliveries. 0:16:10.600 --> 0:16:14.200 It was a record profit in spite of the supply 0:16:14.320 --> 0:16:19.280 chain difficulties that will be ahead. Tesla did, however, maintain 0:16:19.400 --> 0:16:24.440 that delivery target of fi annual growth. And one interesting 0:16:24.480 --> 0:16:29.040 note from Morgan Stanley. They believe the bull case narrative 0:16:29.400 --> 0:16:34.560 hasn't really changed, but it wasn't a spectacular results, as 0:16:34.920 --> 0:16:37.800 we might have hoped, would change the balls minds on Tesla. 0:16:38.120 --> 0:16:42.400 I mean Tesla balls minds cannot be changed, so whatever. Um. 0:16:42.600 --> 0:16:46.480 The interesting juxtaposition to this ed, I think in a 0:16:46.560 --> 0:16:49.360 way is the story that you broke on Rivian now 0:16:49.440 --> 0:16:52.440 compares Rivillian Rivan's current production to that of Tesla when 0:16:52.480 --> 0:16:55.560 they first started. But the idea is these guys have 0:16:55.640 --> 0:16:59.880 it together in a slightly more I guess organized way. Yeah, 0:16:59.880 --> 0:17:02.640 I mean the stocks under pressure. It just hit fifty bucks. 0:17:02.640 --> 0:17:05.080 The more Stark has been crushed, but it's still fifty 0:17:05.119 --> 0:17:07.560 billion dollar company, which in me is shark right, and 0:17:07.600 --> 0:17:10.399 it's largely pre revenue, right. They just started booking revenue 0:17:10.520 --> 0:17:12.439 revenue of these things. But what sources tell me is 0:17:12.480 --> 0:17:16.119 that the end of fourth quarter was tough. You know, 0:17:16.119 --> 0:17:18.280 there were COVID outbreaks at the plant. They had an 0:17:18.280 --> 0:17:20.960 all hands on deck kind of scenario to get these 0:17:20.960 --> 0:17:23.040 pickup trucks, which I'm starting this scene now by the 0:17:23.080 --> 0:17:26.520 way in San Francisco on the streets. Um. And then 0:17:26.560 --> 0:17:29.040 they try to introduce a new product onto the assembly line, 0:17:29.040 --> 0:17:32.480 which they share an assembly line, and you know, production 0:17:32.600 --> 0:17:35.160 really slowed down. So what they did new year's day, 0:17:35.200 --> 0:17:38.359 Boom shut down the assembly line altogether fixed the problems 0:17:38.720 --> 0:17:41.439 restarted on January the nine, and since then they're ramping 0:17:41.520 --> 0:17:44.399 up like massively. You know, it's almost two trucks a 0:17:44.400 --> 0:17:47.080 week um, which is what are they making. They're making 0:17:47.080 --> 0:17:50.680 the R one T and the R N S is 0:17:50.720 --> 0:17:53.399 the S, but the R N S very modest volumes. 0:17:53.400 --> 0:17:55.840 In fact that the company's only publicly discussed that the 0:17:55.840 --> 0:17:59.040 CEO R J. Scarynge and the CFO claim mcdonna have one. 0:17:59.280 --> 0:18:02.440 No one else's publicly, you know, taking delivery of one yet. 0:18:02.440 --> 0:18:05.920 But I'm told they are building sailable vehicles. Sources say 0:18:05.960 --> 0:18:09.200 it's like, you know, a negligible number. So, Laura, what's 0:18:09.240 --> 0:18:13.040 the feeling in the EV marketplace as to boy the 0:18:13.080 --> 0:18:16.280 compety the competitive landscape is really beginning to change chairs. 0:18:16.320 --> 0:18:18.879 We have some of the you know, the big O E. M. 0:18:18.920 --> 0:18:21.040 S is, whether it's Volkswagener or Forward or General Motors 0:18:21.200 --> 0:18:24.520 really ramp up their EV game. What's the feeling about 0:18:24.560 --> 0:18:27.200 how the market share might shake out over the next 0:18:27.240 --> 0:18:31.240 several years. There is a feeling that competition is ramping up, 0:18:31.280 --> 0:18:35.160 and that poses questions long term for Tesla's volume and 0:18:35.400 --> 0:18:39.199 it's and its share price right. Focusing on Europe a 0:18:39.240 --> 0:18:42.399 little bit, Voxwagen. When we think of their total car sales, 0:18:42.560 --> 0:18:46.359 only five of fully electric. There's been a lot of 0:18:46.440 --> 0:18:51.440 hype about Ford recently they're pushing into electrification market shares 0:18:51.480 --> 0:18:55.840 surpassing one billion dollars for the first time. But Tesla 0:18:55.960 --> 0:18:59.320 is still by far the market leader for evs and 0:18:59.400 --> 0:19:02.080 for back trees. So the cyber truck, which I know 0:19:02.160 --> 0:19:04.840 Matt Miller will want to come onto that. What's concerned 0:19:04.880 --> 0:19:08.200 Initially that the new batteries which are more efficient used 0:19:08.200 --> 0:19:11.200 in the cyber truck that was the reason behind the delay. 0:19:11.400 --> 0:19:13.600 Turns out the batteries are fine and tells us planning 0:19:13.600 --> 0:19:16.960 to use those more efficient batteries across all their models. 0:19:16.960 --> 0:19:20.040 So it still has that competitive advantage with technology. I mean, 0:19:20.160 --> 0:19:24.280 the thing is five isn't very little, right. Volkswagen makes 0:19:24.640 --> 0:19:28.680 ten million cars a year, so that's different than Tesla, 0:19:28.800 --> 0:19:31.280 although they really ramped up their production right there. What 0:19:31.320 --> 0:19:34.040 was it add like nine hundred thirty six thousand um 0:19:34.080 --> 0:19:37.359 for the for the full year. That's doing what they're 0:19:37.359 --> 0:19:40.760 doing well and in that sense, but Laura mentions the truck, 0:19:41.080 --> 0:19:43.520 what a huge disappointment on so many levels. I mean, 0:19:43.560 --> 0:19:47.280 first he breaks the window with the bowling ball or whatever. Remember, 0:19:49.320 --> 0:19:51.800 so embarrassing, and but I thought they were going to 0:19:51.880 --> 0:19:54.080 come out with it eventually. Now Ford is going to 0:19:54.160 --> 0:19:57.080 beat them, Rivan is beat them. Looks like Chevy's gonna 0:19:57.080 --> 0:19:59.560 beat that. Everyone's beating the market with the truck. Well, look, 0:19:59.560 --> 0:20:02.560 they just find it that supply chain issues are disrupting 0:20:02.600 --> 0:20:05.160 current production of Model Y Model three. Right, the cash 0:20:05.200 --> 0:20:08.439 cows the profitable vehicles, so they can't justify a product 0:20:08.480 --> 0:20:10.760 launch if they're not able to service and get the 0:20:10.800 --> 0:20:15.080 parts that they need to build volume on existing vehicles. Um, 0:20:15.119 --> 0:20:17.280 but this is a comms issue. Guys like think about 0:20:17.440 --> 0:20:21.240 earning season broadly across the SMP. Beating on the top 0:20:21.280 --> 0:20:23.560 and bottom line hasn't really counted for much the streets 0:20:23.560 --> 0:20:26.040 looking for how strong is the current core to how 0:20:26.080 --> 0:20:28.480 strong is the year? Elon must tweets going into this 0:20:28.560 --> 0:20:31.399 earnings having sort of spectacular announced he doesn't want to 0:20:31.400 --> 0:20:33.600 do Earny schools anymore because he's too busy that he'll 0:20:33.640 --> 0:20:36.479 outline a product roadmap. He goes on the cool and 0:20:36.520 --> 0:20:38.760 does not outline a product roadmap. In fact, he does 0:20:38.800 --> 0:20:40.920 the opposite. Sorry, guys, these products are all on the 0:20:40.920 --> 0:20:44.159 back burner because of supply chain issues. Um, it's a 0:20:44.160 --> 0:20:47.159 comms issue, all right. Ed Ludlow, thanks so much for 0:20:47.240 --> 0:20:49.960 joining us. Ed Lulow, West Coast correspondent for Bloomberg News 0:20:49.960 --> 0:20:53.639 and Bloomberg TV. Produce a law right joining us from London, 0:20:53.640 --> 0:20:57.760 getting the latest on e VS the secrets under some 0:20:57.880 --> 0:21:04.439 pressure here, lots of pieces supply chain issues, competition, but 0:21:04.480 --> 0:21:10.680 you know that Matt Miller's all over it. And I'm 0:21:10.760 --> 0:21:14.479 Nathan Hagar in the Bloomberg room in Washington. We do 0:21:14.520 --> 0:21:17.200 all scream for ice cream and we're very excited to 0:21:17.880 --> 0:21:22.120 bring in the CEO of Dryer's Grand ice Cream, Kim 0:21:22.280 --> 0:21:26.960 Pedal regum with us this morning. Kim, thanks for being here. 0:21:27.280 --> 0:21:31.480 I got the long straw because I'm probably the biggest 0:21:31.560 --> 0:21:35.280 fan of ice cream there is. You don't think so. 0:21:35.560 --> 0:21:38.679 I don't believe that anyone eats more ice cream than me. 0:21:38.760 --> 0:21:42.000 If I eat, are gonna throw down over this a 0:21:42.080 --> 0:21:46.400 pint a night. My wife thinks I'm a diet Yeah, 0:21:46.520 --> 0:21:48.920 I admit I split the pints with my wife. Kim, 0:21:48.960 --> 0:21:51.080