1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:22,599 Speaker 1: at Bloomberg dot com slash podcast. All right, let's talk 7 00:00:22,640 --> 00:00:28,080 Speaker 1: to a professional investor now, Steve Wyatt, chief investment strategist 8 00:00:28,120 --> 00:00:32,279 Speaker 1: for b Okay Financial. Steve, You're in Oklahoma, isn't it right? 9 00:00:32,760 --> 00:00:36,040 Speaker 1: And Tulsa, Oklahoma. Tulsa, Oklahoma. So let me just I'm 10 00:00:36,040 --> 00:00:39,680 Speaker 1: gonna assume that you've got an opinion on oil at 11 00:00:39,800 --> 00:00:41,720 Speaker 1: w t I crude oil and a hundred two dollars 12 00:00:41,720 --> 00:00:45,200 Speaker 1: of barrel. What are the smart people in the oil 13 00:00:45,240 --> 00:00:47,120 Speaker 1: biz that you talked to? What are they saying about? 14 00:00:47,159 --> 00:00:49,639 Speaker 1: Where do they think oil is going? You know, it's 15 00:00:49,680 --> 00:00:52,760 Speaker 1: interesting here. Look be Okay Financials, an energy bank, were 16 00:00:52,760 --> 00:00:57,080 Speaker 1: one of the larger banks and the energy business. And frankly, uh, 17 00:00:57,200 --> 00:00:59,560 Speaker 1: not just in Oklahoma, but in Texas as well. We've 18 00:00:59,600 --> 00:01:02,279 Speaker 1: got kind of a love hate relationship with oil prices. 19 00:01:03,320 --> 00:01:06,440 Speaker 1: We don't like it. As consumers when gasoline prices are high, 20 00:01:06,560 --> 00:01:09,600 Speaker 1: just like everybody else. So much of our economy is 21 00:01:09,640 --> 00:01:13,120 Speaker 1: driven by the energy business, employment, personal incomes, a lot 22 00:01:13,200 --> 00:01:18,160 Speaker 1: of people with royalties that as oil prices go up, UH, 23 00:01:18,240 --> 00:01:21,080 Speaker 1: personal incomes are rising in this UH, in this part 24 00:01:21,080 --> 00:01:23,920 Speaker 1: of the in this part of the country, we're still 25 00:01:24,280 --> 00:01:27,000 Speaker 1: i would say constructive on the energy business. There's a 26 00:01:27,040 --> 00:01:30,119 Speaker 1: lot of moving parts there. There's a lot of things 27 00:01:30,120 --> 00:01:33,400 Speaker 1: outside of outside of our control. When you start thinking 28 00:01:33,440 --> 00:01:35,920 Speaker 1: about what's going on with Russia and Ukraine and how 29 00:01:35,959 --> 00:01:38,959 Speaker 1: OPEC is handling some of this UH, and then you've 30 00:01:38,959 --> 00:01:43,440 Speaker 1: got some regulatory issues I'm gonna say issues in Washington 31 00:01:43,560 --> 00:01:47,120 Speaker 1: that almost ironically, if you look at the performance of 32 00:01:47,160 --> 00:01:51,640 Speaker 1: the energy markets, the more restrictive policies have been, the 33 00:01:51,680 --> 00:01:55,320 Speaker 1: better the performance of the energy equities in the price 34 00:01:55,360 --> 00:01:59,520 Speaker 1: of oil. But to the degree that we see ongoing 35 00:01:59,680 --> 00:02:05,120 Speaker 1: demand and for energy both oil and natural gas were constructive, 36 00:02:05,160 --> 00:02:09,280 Speaker 1: we're still constructive. Does it make sense to you, Steve, 37 00:02:09,440 --> 00:02:12,640 Speaker 1: that the US would go all the way over to 38 00:02:12,760 --> 00:02:16,000 Speaker 1: Saudi Arabia and ask them to pump more oil rather 39 00:02:16,080 --> 00:02:19,000 Speaker 1: than just taking a little trip down to Oklahoma in 40 00:02:19,040 --> 00:02:21,440 Speaker 1: Texas and making it easier for our folks to pull 41 00:02:21,919 --> 00:02:26,079 Speaker 1: our own natural resources out of the ground. So one 42 00:02:26,080 --> 00:02:27,840 Speaker 1: of the hard parts of our job is we try 43 00:02:27,880 --> 00:02:30,680 Speaker 1: to be as a political as possible when we're when 44 00:02:30,720 --> 00:02:33,720 Speaker 1: we're answering questions like this. But I didn't say the President. 45 00:02:33,800 --> 00:02:38,240 Speaker 1: I said America just in general, as we think about 46 00:02:38,360 --> 00:02:42,640 Speaker 1: how we move forward from an energy policy standpoint, and 47 00:02:42,680 --> 00:02:45,200 Speaker 1: nobody's pushing back on the fact that the direction that 48 00:02:45,240 --> 00:02:48,080 Speaker 1: we're going is towards more green energy. But as we 49 00:02:48,120 --> 00:02:52,240 Speaker 1: sit here today, Uh, it is hard to understand why 50 00:02:52,440 --> 00:02:56,120 Speaker 1: the administration would find it better to go to OPEC 51 00:02:56,400 --> 00:03:02,320 Speaker 1: or Venezuela or countries to ask them to produce more 52 00:03:02,400 --> 00:03:05,919 Speaker 1: oil when that is a resource that we have domestically. 53 00:03:05,960 --> 00:03:08,800 Speaker 1: We're the largest producer of oil in the in the world. 54 00:03:09,240 --> 00:03:12,600 Speaker 1: We've got a h an industry that has that that 55 00:03:12,639 --> 00:03:15,440 Speaker 1: has you know, built out and put us in a 56 00:03:15,480 --> 00:03:19,000 Speaker 1: position where we could we could be energy and dependent 57 00:03:19,040 --> 00:03:21,440 Speaker 1: if that's what we wanted to do. I understand there's 58 00:03:21,560 --> 00:03:26,480 Speaker 1: uh competing thoughts around the direction that we should be 59 00:03:26,480 --> 00:03:29,160 Speaker 1: going to really more around the timing of how quickly 60 00:03:29,200 --> 00:03:32,280 Speaker 1: we should be moving forward. But yes, it's hard to 61 00:03:32,360 --> 00:03:36,560 Speaker 1: understand why we're not engaging our domestic energy business at 62 00:03:36,600 --> 00:03:39,120 Speaker 1: a different level than what it seems we are hasteve 63 00:03:39,200 --> 00:03:41,320 Speaker 1: you know what I've heard from folks that do follow 64 00:03:41,360 --> 00:03:44,640 Speaker 1: the energy markets globally, they say, you know, the U 65 00:03:44,720 --> 00:03:47,320 Speaker 1: S producers, the shell producers, who have been had such 66 00:03:47,360 --> 00:03:51,200 Speaker 1: tremendous growth over the last twenty years. Uh, They've been 67 00:03:51,200 --> 00:03:55,000 Speaker 1: told by their equity holders, by their bondholders, maybe even 68 00:03:55,040 --> 00:04:00,280 Speaker 1: by their commercial lenders, discipline, do not drill more turned 69 00:04:00,320 --> 00:04:04,800 Speaker 1: that cash to shareholders and creditors. Is that part of 70 00:04:04,800 --> 00:04:07,920 Speaker 1: the issue as well? It certainly is, And and you 71 00:04:08,000 --> 00:04:10,280 Speaker 1: have to look at how again, just go to how 72 00:04:10,320 --> 00:04:14,720 Speaker 1: the industry is actually performing. Uh. Since that shift when 73 00:04:14,720 --> 00:04:18,080 Speaker 1: it was you know, drill, baby, drill, Uh, it has 74 00:04:18,120 --> 00:04:22,799 Speaker 1: been better from an economic standpoint for the holders of 75 00:04:22,960 --> 00:04:27,240 Speaker 1: equity energy equities. Uh, it's been better for the debt 76 00:04:27,279 --> 00:04:30,679 Speaker 1: holders of those energy companies. Energy makes up a pretty 77 00:04:30,760 --> 00:04:33,560 Speaker 1: large portion of the high yield index. And then in 78 00:04:33,640 --> 00:04:38,040 Speaker 1: past periods, Uh, the energy sector has been responsible for 79 00:04:38,279 --> 00:04:40,520 Speaker 1: a lot of the problems in the high market. That's 80 00:04:40,560 --> 00:04:44,719 Speaker 1: just not the case. Again, working for a financial company 81 00:04:44,760 --> 00:04:47,279 Speaker 1: that is in that business, UH, it does not hurt 82 00:04:47,279 --> 00:04:51,479 Speaker 1: our credit profile when we see oil prices um and 83 00:04:51,600 --> 00:04:55,240 Speaker 1: natural gas prices as high as they are. All right, 84 00:04:55,279 --> 00:04:57,839 Speaker 1: talk to us about Oklahoma State football. What's the outlook 85 00:04:57,880 --> 00:05:01,520 Speaker 1: for this coming year? Steve, I have to look, I 86 00:05:01,560 --> 00:05:03,960 Speaker 1: went to Oklahoma State. I played on the tennis team there. 87 00:05:05,040 --> 00:05:07,520 Speaker 1: Interestingly that when I was at Oklahoma State though, to 88 00:05:07,520 --> 00:05:09,760 Speaker 1: tell you just how long ago that was, Jimmy Johnson 89 00:05:09,839 --> 00:05:14,719 Speaker 1: was our head football coach. Um, Look, we've done a 90 00:05:14,720 --> 00:05:17,960 Speaker 1: fabulous job of being relevant for the last fifteen years. 91 00:05:18,520 --> 00:05:22,719 Speaker 1: I think as a as a long time Oklahoma State fan. Uh, 92 00:05:22,720 --> 00:05:26,320 Speaker 1: it's a lesson and expectational management. You never let your 93 00:05:26,360 --> 00:05:29,279 Speaker 1: expectations get away from you on the high side. But 94 00:05:29,360 --> 00:05:31,640 Speaker 1: we've certainly done a good job in the last fifteen 95 00:05:31,720 --> 00:05:35,480 Speaker 1: years or so we being relevant in D one football. Absolutely, 96 00:05:35,600 --> 00:05:39,320 Speaker 1: Oklahoma State Cowboys had some good stuff there. Uh. Steve Wyatt, 97 00:05:39,360 --> 00:05:42,880 Speaker 1: chief investment strategist for be Okay Financial. We were gonna 98 00:05:42,880 --> 00:05:45,640 Speaker 1: talk like broad Marcus b Someone's are talking about energy 99 00:05:45,720 --> 00:05:48,760 Speaker 1: oil and with those folks down there, it's their business 100 00:05:48,760 --> 00:05:55,520 Speaker 1: in Oklahoma and Texas. Uh, they've been quite disciplined. All right, 101 00:05:55,560 --> 00:05:58,520 Speaker 1: let's go technology. I'm loving you know. The SMP went 102 00:05:58,560 --> 00:06:01,840 Speaker 1: down almost almost percent year today, but when you look 103 00:06:01,880 --> 00:06:05,640 Speaker 1: at the tech heavy nastack that's down almost thirty percent 104 00:06:05,839 --> 00:06:08,120 Speaker 1: year today, and you think about the nastack tech stocks, 105 00:06:08,160 --> 00:06:11,680 Speaker 1: they've really lead this market since a great financial crisis, 106 00:06:11,680 --> 00:06:14,960 Speaker 1: but certainly under performing year to date this year. Let's 107 00:06:15,000 --> 00:06:16,560 Speaker 1: get a little bit of a preview because we're gonna 108 00:06:16,600 --> 00:06:19,039 Speaker 1: have some tech earnings really in earnest start next week. 109 00:06:19,040 --> 00:06:22,120 Speaker 1: We've got uh Netflix after the close tonight, Ivana the 110 00:06:22,240 --> 00:06:26,800 Speaker 1: Lefska founder and chief investment officer of Spear invest joins us. 111 00:06:27,040 --> 00:06:31,600 Speaker 1: Ivana again the underperformance attech this year, Um, what's your 112 00:06:31,680 --> 00:06:34,760 Speaker 1: view of the tech space here? Is there still? Is 113 00:06:34,760 --> 00:06:40,480 Speaker 1: this still a core part of people's portfolio? Should it be? Well, 114 00:06:40,560 --> 00:06:43,479 Speaker 1: I believe it's should Then I believe this major pubek 115 00:06:43,640 --> 00:06:48,160 Speaker 1: presents a really good, attractive, really attractive entry point. If 116 00:06:48,160 --> 00:06:52,240 Speaker 1: you look at tech the under performance with them not 117 00:06:52,480 --> 00:06:55,320 Speaker 1: that being down. If you look at the big innovators 118 00:06:55,360 --> 00:06:58,360 Speaker 1: in the space, they're down significantly more than that. So 119 00:06:58,880 --> 00:07:03,679 Speaker 1: we didn't arcovery universe. Companies that have delivered on earnings 120 00:07:03,720 --> 00:07:07,839 Speaker 1: and had solid outlooks are still down. Some companies that 121 00:07:07,880 --> 00:07:10,880 Speaker 1: had some hiccups are down seventy and you have somewhere 122 00:07:10,880 --> 00:07:13,840 Speaker 1: like the business model is in question that are down, 123 00:07:14,920 --> 00:07:17,440 Speaker 1: So we think the sweet spot is to look into 124 00:07:18,120 --> 00:07:21,440 Speaker 1: this area of stocks that are actually performing pretty well. 125 00:07:21,520 --> 00:07:24,520 Speaker 1: The fundamentals are strong, but you can still get these 126 00:07:24,520 --> 00:07:28,160 Speaker 1: stops cheaper compared to what you could have gotten a 127 00:07:28,240 --> 00:07:33,120 Speaker 1: year ago. How else do you divide the technology sector 128 00:07:33,280 --> 00:07:38,680 Speaker 1: other than you know innovators UM or by sort of 129 00:07:38,760 --> 00:07:41,880 Speaker 1: executing on business strategy in terms of you know, the 130 00:07:41,920 --> 00:07:46,000 Speaker 1: products they make or the services they provide. So we 131 00:07:46,280 --> 00:07:49,920 Speaker 1: are we've focused on industrial technology. The way we look 132 00:07:49,920 --> 00:07:55,120 Speaker 1: at technology more broadly is either consumer driven names or 133 00:07:55,560 --> 00:08:01,240 Speaker 1: industrial or enterprise driven companies. So in the last text cycle, 134 00:08:01,360 --> 00:08:03,280 Speaker 1: we saw a lot of in the innovation in the 135 00:08:03,320 --> 00:08:08,480 Speaker 1: consumer space where you had between streaming social media. Those 136 00:08:08,480 --> 00:08:12,080 Speaker 1: were really the big companies that drove the the drove 137 00:08:12,160 --> 00:08:16,520 Speaker 1: the text cycle. Going forward, we think industrial and enterprise 138 00:08:16,560 --> 00:08:20,120 Speaker 1: technology will be the big driver of the of the 139 00:08:20,160 --> 00:08:23,320 Speaker 1: next cycle. We think a lot of the innovation in 140 00:08:23,400 --> 00:08:26,640 Speaker 1: tech has been around data, how to use data, how 141 00:08:26,680 --> 00:08:30,160 Speaker 1: to store it in the cloud, how to secure it well, 142 00:08:31,080 --> 00:08:33,280 Speaker 1: and then how to use it and use processes like 143 00:08:33,360 --> 00:08:37,480 Speaker 1: ai UM. So we think we're just at the cost 144 00:08:37,760 --> 00:08:40,959 Speaker 1: of UM where we can start using some of these 145 00:08:40,960 --> 00:08:46,839 Speaker 1: technologies into mainstream businesses or traditional businesses like autos aerospace, 146 00:08:47,320 --> 00:08:50,199 Speaker 1: and there is a real potential to transform this entire 147 00:08:50,280 --> 00:08:53,840 Speaker 1: end market. So on that end, Ivanna a lot of 148 00:08:53,840 --> 00:08:56,920 Speaker 1: folks when they're talking about the future, the next three 149 00:08:57,000 --> 00:08:59,959 Speaker 1: or five years of where investors should really think about 150 00:09:00,040 --> 00:09:03,000 Speaker 1: the text act, they say cyber security. How do you 151 00:09:03,040 --> 00:09:05,960 Speaker 1: think about cybersecurity? What what's your view on that space 152 00:09:06,000 --> 00:09:07,600 Speaker 1: and and how do you think is the best way 153 00:09:07,600 --> 00:09:12,920 Speaker 1: to play it. So we're really excited about cybersecurity. It's 154 00:09:13,080 --> 00:09:17,040 Speaker 1: the most it's the largest team within within our portfolio. 155 00:09:17,160 --> 00:09:21,360 Speaker 1: We have a publicly listed dts UH Spear Alpha with 156 00:09:21,440 --> 00:09:25,120 Speaker 1: the ticker SPRX, and cybersecurity is one of the largest 157 00:09:25,240 --> 00:09:30,960 Speaker 1: teams within that that that portfolio. We love the space 158 00:09:31,040 --> 00:09:35,440 Speaker 1: for several several reasons. One of them is as architectures 159 00:09:35,480 --> 00:09:40,160 Speaker 1: have changed and data is no longer centralized. People are 160 00:09:40,440 --> 00:09:44,720 Speaker 1: using either multiple devices or they're using data that store 161 00:09:44,720 --> 00:09:48,160 Speaker 1: at the cloud or at multiple clouds. So this change 162 00:09:48,200 --> 00:09:53,200 Speaker 1: in architecture requires completely different cybersecurity solutions then you would 163 00:09:53,240 --> 00:09:56,640 Speaker 1: have needed several years ago. So there are several of 164 00:09:56,720 --> 00:10:00,199 Speaker 1: the space is pretty fragmented. There's several different areas that 165 00:10:00,360 --> 00:10:04,960 Speaker 1: we like and we focus on that have over growth 166 00:10:05,280 --> 00:10:08,880 Speaker 1: of just the end market. Endpoint security is one of them. 167 00:10:09,320 --> 00:10:13,160 Speaker 1: Here we like companies like crowd strikes. Another area is 168 00:10:13,240 --> 00:10:16,920 Speaker 1: securing workloads to the cloud and within the clouds. Here 169 00:10:16,960 --> 00:10:20,000 Speaker 1: a name is z scaler. And then for people that 170 00:10:20,120 --> 00:10:23,120 Speaker 1: want to play a more platform approach, power out on 171 00:10:23,200 --> 00:10:26,360 Speaker 1: networks is a good way to play where they play 172 00:10:26,440 --> 00:10:31,840 Speaker 1: both on the endpoint UM and the traditional firewall firewall products. 173 00:10:32,840 --> 00:10:35,760 Speaker 1: What about AI UM it's something we hear so much 174 00:10:35,800 --> 00:10:40,280 Speaker 1: about and you know, investors put so much faith in it. Obviously, 175 00:10:40,400 --> 00:10:42,559 Speaker 1: eventually the machines are going to turn against us and 176 00:10:42,600 --> 00:10:44,480 Speaker 1: then you'll feel guilty about all the money you made. 177 00:10:44,520 --> 00:10:48,439 Speaker 1: But is it a good place to go into right now? Well, yes, 178 00:10:48,559 --> 00:10:51,120 Speaker 1: So it's very interesting because it's been a team for 179 00:10:51,280 --> 00:10:53,959 Speaker 1: us over the past few years, but we really didn't 180 00:10:54,000 --> 00:10:57,440 Speaker 1: have any significant investments and as there weren't any ways 181 00:10:57,480 --> 00:11:01,360 Speaker 1: to play that scale. And over the last year we've 182 00:11:01,400 --> 00:11:04,600 Speaker 1: seen a lot of developments where AI is becoming at 183 00:11:04,640 --> 00:11:09,439 Speaker 1: the core of many processes. So even if back to cybersecurity, 184 00:11:09,679 --> 00:11:11,520 Speaker 1: even if you look at cybersecurity, a lot of the 185 00:11:11,600 --> 00:11:15,400 Speaker 1: new products are AI based. So crowds rate products are 186 00:11:15,480 --> 00:11:18,920 Speaker 1: AI and machine learning based the scalers products same thing. 187 00:11:19,120 --> 00:11:23,920 Speaker 1: So it's really gaining mainstream adoption. And this is just 188 00:11:24,120 --> 00:11:27,719 Speaker 1: for running like, uh, processes that you wouldn't necessarily be 189 00:11:27,800 --> 00:11:32,000 Speaker 1: able to even do manually, right. Uh, This algorithms can 190 00:11:32,080 --> 00:11:34,600 Speaker 1: pick up on a NORMALI is by just by training 191 00:11:34,760 --> 00:11:37,000 Speaker 1: training the model. So we think the A is going 192 00:11:37,040 --> 00:11:42,080 Speaker 1: to gain adoption to even more mainstream like autonomous driving. 193 00:11:42,160 --> 00:11:45,839 Speaker 1: We still believe that's several years away because it is 194 00:11:45,920 --> 00:11:50,319 Speaker 1: a pretty complex problem, but we do see AI is 195 00:11:50,400 --> 00:11:55,280 Speaker 1: gaining pretty uh, pretty broad adoption. AVNA just real quick 196 00:11:55,320 --> 00:11:59,400 Speaker 1: thirty seconds. Bloomberg Broker story yesterday that Apple may slow 197 00:11:59,520 --> 00:12:02,600 Speaker 1: some higher ring in certain businesses and that we've seen 198 00:12:02,640 --> 00:12:05,080 Speaker 1: that from other companies. We've seen that from other companies. 199 00:12:05,640 --> 00:12:08,120 Speaker 1: Do you get a sense of Silicon Valley is kind 200 00:12:08,160 --> 00:12:11,880 Speaker 1: of gearing up for a recession? Yeah? Absolutely. I mean 201 00:12:12,000 --> 00:12:14,959 Speaker 1: at this point we are at a at a point 202 00:12:15,040 --> 00:12:18,880 Speaker 1: where recession is almost a foregone conclusion. Um, We're we 203 00:12:19,000 --> 00:12:21,720 Speaker 1: trucked a lot of industrial data points and things really 204 00:12:21,840 --> 00:12:26,640 Speaker 1: became really really turned even since since March, we started 205 00:12:26,679 --> 00:12:31,160 Speaker 1: seeing the trucking market soft and consumer discretionary softened and 206 00:12:31,320 --> 00:12:35,760 Speaker 1: that's really now just been affecting the broad at the 207 00:12:35,840 --> 00:12:38,960 Speaker 1: broader market. So things have just spread to like manufacturing, 208 00:12:39,440 --> 00:12:42,160 Speaker 1: things have spread to technology. So we're gonna see this 209 00:12:42,280 --> 00:12:46,079 Speaker 1: from everybody. Microsoft said that they're gonna slow hiring the 210 00:12:46,720 --> 00:12:49,640 Speaker 1: same things they're slow and hiring. All right, Evanna, thank 211 00:12:49,640 --> 00:12:51,920 Speaker 1: you so much for joining us. Ivana Delevska foundery, chief 212 00:12:51,960 --> 00:12:55,520 Speaker 1: investment officer of Spear invest getting a update on all 213 00:12:55,600 --> 00:13:01,360 Speaker 1: things technology. I want to check in with Liz McCormick. 214 00:13:01,559 --> 00:13:04,800 Speaker 1: She's Chief corresponding Global macro Markets for Bloomberg News and 215 00:13:04,880 --> 00:13:09,280 Speaker 1: a proud bachelor's and NBA graduate from the State University 216 00:13:09,320 --> 00:13:12,839 Speaker 1: of New Jersey. That would be Rutgers. Uh, Liz, some 217 00:13:13,000 --> 00:13:15,559 Speaker 1: smart people tell me I need to pay attention to 218 00:13:15,679 --> 00:13:18,800 Speaker 1: this yield curve, this two year ten year thing, which 219 00:13:18,840 --> 00:13:22,280 Speaker 1: I think is inverted. Is that something you worry about? 220 00:13:22,400 --> 00:13:25,079 Speaker 1: Is that something that you and the smart people in 221 00:13:25,080 --> 00:13:28,480 Speaker 1: the credit markets think about. Well, it seems like and 222 00:13:28,600 --> 00:13:32,199 Speaker 1: go are you um? It seems like definitely. You know, 223 00:13:32,320 --> 00:13:36,160 Speaker 1: the yield curve when it gets inverted always is kind 224 00:13:36,200 --> 00:13:39,760 Speaker 1: of in the focus, right because you know, historically and 225 00:13:40,080 --> 00:13:41,559 Speaker 1: you know a lot of the research was done on 226 00:13:41,600 --> 00:13:44,520 Speaker 1: the broad curve three month rades versus tenure, which isn't 227 00:13:44,559 --> 00:13:47,160 Speaker 1: inverted yet, but the two year tenure, like you said, 228 00:13:47,559 --> 00:13:50,719 Speaker 1: drives a lot of focus. It builds on these recession 229 00:13:50,800 --> 00:13:54,600 Speaker 1: fears because inverting curves have been linked to recession. So yeah, 230 00:13:54,600 --> 00:13:56,840 Speaker 1: I don't think you could ignore it, whether you might 231 00:13:56,920 --> 00:13:59,080 Speaker 1: want to or not. But yeah, it's kind of adding 232 00:13:59,200 --> 00:14:01,160 Speaker 1: to you know, a lot of the comments were seeing 233 00:14:01,200 --> 00:14:05,000 Speaker 1: that the Fed might tighten us into a recession, tighten 234 00:14:05,080 --> 00:14:07,199 Speaker 1: us into a recession. But we've got about I think 235 00:14:07,240 --> 00:14:09,280 Speaker 1: a week and a half till or no, wait now, 236 00:14:09,400 --> 00:14:13,080 Speaker 1: seven days I'm sorry, right, Tuesday, seven eight days until 237 00:14:13,600 --> 00:14:16,760 Speaker 1: the Federal Reserve next Federal Reserve meeting. Liz, there's this 238 00:14:16,880 --> 00:14:19,200 Speaker 1: big debate about seventy five or a hundred at the moment. 239 00:14:19,440 --> 00:14:21,680 Speaker 1: How much more of a difference does a hundred really 240 00:14:21,720 --> 00:14:24,720 Speaker 1: make relative to seventy five? As we know Governor Chris Waller, 241 00:14:25,000 --> 00:14:27,280 Speaker 1: I think it was last week that Mike McKee interviewed him, 242 00:14:27,600 --> 00:14:30,480 Speaker 1: said seventy five is still a lot. Do we really 243 00:14:30,520 --> 00:14:33,920 Speaker 1: need that extra five? Right? And I thought that was 244 00:14:33,960 --> 00:14:37,040 Speaker 1: an interesting point he made, like kind of in a way, 245 00:14:38,560 --> 00:14:40,080 Speaker 1: what does it matter? I mean, I think it's more 246 00:14:40,160 --> 00:14:43,640 Speaker 1: psychological because I think he's right. Obviously, seventy five and 247 00:14:43,720 --> 00:14:46,200 Speaker 1: two in a row. You know, they just did seventy 248 00:14:46,240 --> 00:14:48,360 Speaker 1: five in June, which was the huge move they haven't 249 00:14:48,400 --> 00:14:51,520 Speaker 1: didn't hadn't done since night before. So I think he's right. 250 00:14:51,840 --> 00:14:54,320 Speaker 1: I mean, I think it's it would just kind of 251 00:14:54,720 --> 00:14:57,480 Speaker 1: a hundred BIPs would just kind of slap the market, 252 00:14:57,560 --> 00:15:00,960 Speaker 1: like we are so all in on inflation. So the 253 00:15:01,040 --> 00:15:03,440 Speaker 1: FED is saying, not that people don't think they're doing 254 00:15:03,520 --> 00:15:06,920 Speaker 1: that now, but I think, you know, in the bag 255 00:15:07,000 --> 00:15:09,160 Speaker 1: of Paneta did a hundred, which some people were joking 256 00:15:09,200 --> 00:15:11,600 Speaker 1: kind of grease the reels for the Fed. But I 257 00:15:11,760 --> 00:15:14,120 Speaker 1: do think that, you know, the pricing is getting more 258 00:15:14,280 --> 00:15:16,720 Speaker 1: like seventy five is looking like the things, So now 259 00:15:16,800 --> 00:15:19,480 Speaker 1: a hundred would be a little surprong, So that doesn't 260 00:15:19,520 --> 00:15:22,160 Speaker 1: like to surprise people. So it seems like people are 261 00:15:22,240 --> 00:15:26,920 Speaker 1: leaning back to seventy five. What's the dollar telling us, Liz, 262 00:15:26,960 --> 00:15:28,760 Speaker 1: I'm looking at the d X Y index. It's as 263 00:15:28,840 --> 00:15:30,720 Speaker 1: high as it's been in you know, since like twenty 264 00:15:30,880 --> 00:15:34,080 Speaker 1: years ago. Um, I can't hear a bear case for 265 00:15:34,120 --> 00:15:37,400 Speaker 1: the dollar out there. How do you and some of 266 00:15:37,440 --> 00:15:39,360 Speaker 1: the smart folks out there that you talked to, How 267 00:15:39,400 --> 00:15:42,000 Speaker 1: are you thinking about that U s. Dollar? Well, you know, 268 00:15:42,160 --> 00:15:45,240 Speaker 1: the dollar has been a real headache for many nations, 269 00:15:45,360 --> 00:15:48,760 Speaker 1: you know, like especially emerging economies which anytime the feed 270 00:15:48,880 --> 00:15:51,680 Speaker 1: is aggressively tightening, even if they're trying to keep up, 271 00:15:52,280 --> 00:15:55,040 Speaker 1: you know, there's a negative knock on to them and 272 00:15:55,200 --> 00:15:57,840 Speaker 1: that they've seen their currencies really weak and even forget 273 00:15:58,240 --> 00:16:00,480 Speaker 1: velve economies. Look at the Euro which just you know 274 00:16:00,640 --> 00:16:04,240 Speaker 1: rising today but you know recently went through parody. Um 275 00:16:04,360 --> 00:16:06,560 Speaker 1: So a lot of these countries which are trying to 276 00:16:06,640 --> 00:16:10,280 Speaker 1: combat inflation, and weaker currencies creates important inflation. So it's 277 00:16:10,320 --> 00:16:13,520 Speaker 1: a headache for them. Um. The FED also, I mean, 278 00:16:13,840 --> 00:16:15,760 Speaker 1: you know, strong dollar. You might think that's great for 279 00:16:15,840 --> 00:16:19,040 Speaker 1: the US, but you know, the Fed to a point, 280 00:16:19,320 --> 00:16:22,200 Speaker 1: it helps tighten financial conditions. So the FED is trying 281 00:16:22,320 --> 00:16:25,200 Speaker 1: to kind of get their calculus right of how much 282 00:16:25,320 --> 00:16:28,440 Speaker 1: to live rates. They got the q T going, you know, 283 00:16:28,480 --> 00:16:31,680 Speaker 1: they want to tighten financial conditions and they have. But 284 00:16:31,840 --> 00:16:34,280 Speaker 1: the dollar, if it just keeps plowing on, that does 285 00:16:34,320 --> 00:16:37,680 Speaker 1: speed things. You know that that's into their models. But yeah, 286 00:16:37,720 --> 00:16:40,200 Speaker 1: I mean, I don't know, I think the people long dollars, 287 00:16:40,280 --> 00:16:43,880 Speaker 1: we're really happy, right, Um, those who bought bonds in 288 00:16:43,960 --> 00:16:47,160 Speaker 1: the US from foreign countries have done well because you know, 289 00:16:47,280 --> 00:16:49,360 Speaker 1: let's just assume that even they're flat on their bonds, 290 00:16:49,440 --> 00:16:52,200 Speaker 1: they convert those dollars back to their home currency. That's 291 00:16:52,200 --> 00:16:54,360 Speaker 1: an advantage. So there's people who have one from that. 292 00:16:54,480 --> 00:16:57,480 Speaker 1: But it is creating some kind of more fundamental headaches 293 00:16:57,520 --> 00:17:01,600 Speaker 1: for some nations. Fundamental head aches for some nations, including 294 00:17:01,840 --> 00:17:04,200 Speaker 1: the entire euro Area, which brings us to the e 295 00:17:04,320 --> 00:17:07,000 Speaker 1: c B. I believe they're meeting on Thursday. There are 296 00:17:07,080 --> 00:17:09,720 Speaker 1: calls out here for not a basis point hike, but 297 00:17:09,840 --> 00:17:13,639 Speaker 1: a fifty basis point hike. This week, Liz can explain 298 00:17:13,680 --> 00:17:18,880 Speaker 1: to our international audience the significance of that fifty Well, yeah, 299 00:17:19,000 --> 00:17:21,920 Speaker 1: you know, the ECB has been, you know, flower to 300 00:17:22,080 --> 00:17:25,280 Speaker 1: move than such like the FED. As far as rates, Um, 301 00:17:25,359 --> 00:17:27,359 Speaker 1: that's one thing that hurt the euro But you know, 302 00:17:27,840 --> 00:17:30,760 Speaker 1: Christine Lagarde had laid out in the last meeting that hey, 303 00:17:30,880 --> 00:17:33,240 Speaker 1: kind of preset we're gonna raise rates. We were looking 304 00:17:33,280 --> 00:17:35,680 Speaker 1: for about twenty five basis points, and of course we 305 00:17:35,760 --> 00:17:39,040 Speaker 1: gave some caveats of data changes, but for them to 306 00:17:39,280 --> 00:17:42,240 Speaker 1: kind of jump on these kind of more aggressive bandwagon 307 00:17:42,440 --> 00:17:44,159 Speaker 1: like seems to be leaked, but at least some of 308 00:17:44,240 --> 00:17:46,359 Speaker 1: the hawks at the ECB, you know, that would be 309 00:17:46,600 --> 00:17:49,160 Speaker 1: a big move. I mean, number one, it would show 310 00:17:49,359 --> 00:17:53,120 Speaker 1: that central bank is really, really, you know, focused on inflation, 311 00:17:53,600 --> 00:17:55,800 Speaker 1: you know, more than maybe some people thought, or you know, 312 00:17:55,840 --> 00:17:58,800 Speaker 1: it's willing to be more aggressive. Um. It also might 313 00:17:58,920 --> 00:18:00,880 Speaker 1: help some of these display alreadies. You know, we've seen 314 00:18:00,880 --> 00:18:04,679 Speaker 1: the euro rally today off those expectations, the markets pricing 315 00:18:04,680 --> 00:18:08,439 Speaker 1: about as does the ECB do twenty five or fifty 316 00:18:08,480 --> 00:18:11,720 Speaker 1: basis points um, but would kind of bring them more 317 00:18:11,800 --> 00:18:13,600 Speaker 1: in line. Of course, the b o J is a 318 00:18:13,640 --> 00:18:16,000 Speaker 1: whole separate story, but with a lot of central banks 319 00:18:16,040 --> 00:18:18,720 Speaker 1: that are tightening quite aggressively. You mentioned it be a 320 00:18:18,800 --> 00:18:20,360 Speaker 1: j and I just want to get your thoughts there. 321 00:18:20,400 --> 00:18:23,040 Speaker 1: I mean, we we don't talk about Japan that much 322 00:18:23,080 --> 00:18:26,720 Speaker 1: relative to Europe these days. But what can the bo 323 00:18:26,800 --> 00:18:28,880 Speaker 1: J do? What do you think? What are they signaling 324 00:18:29,000 --> 00:18:33,840 Speaker 1: right now? Well, it seems like they're single signaling that 325 00:18:33,960 --> 00:18:36,359 Speaker 1: they're going to keep their policies that they've been on 326 00:18:36,440 --> 00:18:39,160 Speaker 1: the dobsh side. There they have yeel curve control going 327 00:18:39,240 --> 00:18:41,680 Speaker 1: on which they're targeting the tenure yield to not go 328 00:18:41,840 --> 00:18:45,240 Speaker 1: above a quarter percentage point over there, and there was 329 00:18:45,320 --> 00:18:47,560 Speaker 1: a lot of speculation for a while. Of course, the 330 00:18:47,760 --> 00:18:50,119 Speaker 1: end has been very weak that the b o j 331 00:18:50,320 --> 00:18:52,359 Speaker 1: may have to give this up. It's costing them too 332 00:18:52,480 --> 00:18:55,040 Speaker 1: much to defend this as rates are rising all over, 333 00:18:55,119 --> 00:18:58,240 Speaker 1: they have a weaker currency. But it seems like people 334 00:18:58,320 --> 00:19:00,200 Speaker 1: are starting to say, well, it seems for an the 335 00:19:00,240 --> 00:19:02,040 Speaker 1: Bank of Japan was going to leave this. You know, 336 00:19:02,119 --> 00:19:05,800 Speaker 1: they wanted inflation for a long long time. Now there's 337 00:19:05,880 --> 00:19:08,600 Speaker 1: beings some so I think most economists think they'd be 338 00:19:08,680 --> 00:19:11,800 Speaker 1: hard pressed to reverse course now, even though the you know, 339 00:19:11,880 --> 00:19:15,200 Speaker 1: they're most of their peers are tightening um. But you know, 340 00:19:15,840 --> 00:19:18,639 Speaker 1: they've been wanting this two percent inflation level, so you know, 341 00:19:18,920 --> 00:19:20,840 Speaker 1: to have a little bit of hot inflation is not 342 00:19:21,000 --> 00:19:23,200 Speaker 1: so bad for them, and at least it seems to 343 00:19:23,240 --> 00:19:26,640 Speaker 1: be the consensus view. Alright, good stuff, Liz McCormick. Appreciate 344 00:19:26,880 --> 00:19:30,080 Speaker 1: getting your thoughts as always. Liz McCormick, Chief Correspondent, Global 345 00:19:30,280 --> 00:19:38,879 Speaker 1: Macro Markets for Bloomberg News. Okay, all right, let's talk technology. 346 00:19:38,920 --> 00:19:41,120 Speaker 1: I'm looking at the you know, the SMP. We're down 347 00:19:41,280 --> 00:19:44,320 Speaker 1: almost almost year to day. But when you look at 348 00:19:44,359 --> 00:19:48,440 Speaker 1: the tech heavy nastack that's down almost thirty percent year 349 00:19:48,520 --> 00:19:50,520 Speaker 1: to date. And you think about the nastack tech stocks, 350 00:19:50,520 --> 00:19:54,000 Speaker 1: they've really lead this market since a great financial crisis, 351 00:19:54,080 --> 00:19:57,360 Speaker 1: but certainly under performing year to date this year. Let's 352 00:19:57,400 --> 00:19:58,960 Speaker 1: get a little bit of a preview because we're gonna 353 00:19:58,960 --> 00:20:01,400 Speaker 1: have some tech earnings really in earnest start next week. 354 00:20:01,440 --> 00:20:04,800 Speaker 1: We've got uh Netflix after the close tonight, Ivana the left, 355 00:20:05,160 --> 00:20:09,159 Speaker 1: founder and chief investment officer of Spear invest joins us. 356 00:20:09,440 --> 00:20:14,000 Speaker 1: Ivana again the underperformance attack this year, Um, what's your 357 00:20:14,040 --> 00:20:17,119 Speaker 1: view of the tech space here? Is there still? Is 358 00:20:17,160 --> 00:20:22,840 Speaker 1: this still a core part of people's portfolio? Should it be? Well? 359 00:20:22,960 --> 00:20:25,880 Speaker 1: I believe it should. Then I believe this major pubic 360 00:20:26,000 --> 00:20:29,400 Speaker 1: presents a really good, attractive, it really attractive entry point. 361 00:20:30,359 --> 00:20:34,760 Speaker 1: If you look at tech the underperformance with them now 362 00:20:34,880 --> 00:20:37,679 Speaker 1: that being down, if you look at the big innovators 363 00:20:37,720 --> 00:20:40,639 Speaker 1: in the space, they're down significantly more than that. So 364 00:20:41,280 --> 00:20:45,720 Speaker 1: within our coverage universe, companies that have delivered on earnings 365 00:20:46,119 --> 00:20:50,200 Speaker 1: and had solid outlooks are still down. Some companies that 366 00:20:50,280 --> 00:20:53,240 Speaker 1: had some hiccups are down seventy and you have somewhere 367 00:20:53,280 --> 00:20:55,680 Speaker 1: like the business model is in questions that are down. 368 00:20:57,320 --> 00:21:00,439 Speaker 1: So we think the sweet spot is to look into uh, 369 00:21:00,520 --> 00:21:03,800 Speaker 1: this area of stocks that are actually performing pretty well. 370 00:21:03,880 --> 00:21:06,880 Speaker 1: The fundamentals are strong, but you can still get these 371 00:21:06,880 --> 00:21:10,520 Speaker 1: stops cheaper compared to what you could have gotten a 372 00:21:10,640 --> 00:21:15,479 Speaker 1: year ago. How else do you divide the technology sector 373 00:21:15,640 --> 00:21:21,040 Speaker 1: other than you know, innovators UM or by sort of 374 00:21:21,160 --> 00:21:24,240 Speaker 1: executing on business strategy in terms of you know, the 375 00:21:24,320 --> 00:21:28,200 Speaker 1: products they make or the services they provide. So we 376 00:21:28,640 --> 00:21:32,280 Speaker 1: are we've focused on industrial technology. The way we look 377 00:21:32,320 --> 00:21:37,480 Speaker 1: at technology more broadly is either consumer driven names or 378 00:21:37,960 --> 00:21:43,600 Speaker 1: industrial or enterprise driven companies. So in the last text cycle, 379 00:21:43,760 --> 00:21:45,600 Speaker 1: we saw a lot of in the innovation in the 380 00:21:45,720 --> 00:21:50,840 Speaker 1: consumer space where you had between streaming social media. Those 381 00:21:50,880 --> 00:21:54,600 Speaker 1: were really the big companies that drove that drove the 382 00:21:54,680 --> 00:21:59,520 Speaker 1: text cycle. Going forward, we think industrial and enterprise technology 383 00:21:59,640 --> 00:22:03,200 Speaker 1: will be the big driver of the of the next cycle. 384 00:22:04,119 --> 00:22:06,240 Speaker 1: We think a lot of the innovation in tech has 385 00:22:06,280 --> 00:22:09,480 Speaker 1: been around data, how to use data, how to store 386 00:22:09,480 --> 00:22:13,520 Speaker 1: it in the cloud, how to secure it well, and 387 00:22:13,600 --> 00:22:16,920 Speaker 1: then how to use it and use processes like ai UM. 388 00:22:17,400 --> 00:22:21,120 Speaker 1: So we think we're just at the cost of um 389 00:22:21,400 --> 00:22:24,480 Speaker 1: where we can start using some of these technologies into 390 00:22:24,960 --> 00:22:30,000 Speaker 1: mainstream businesses or traditional businesses like autos aerospace, and there 391 00:22:30,119 --> 00:22:33,159 Speaker 1: is a real potential to transform this entire end market. 392 00:22:34,080 --> 00:22:37,200 Speaker 1: So on that end, Ivanna a lot of folks when 393 00:22:37,240 --> 00:22:39,399 Speaker 1: they are talking about the future, the next three or 394 00:22:39,440 --> 00:22:42,440 Speaker 1: five years of where investors should really think about the 395 00:22:42,520 --> 00:22:45,560 Speaker 1: text act, they say cyber security. How do you think 396 00:22:45,600 --> 00:22:48,879 Speaker 1: about cybersecurity? What's your view on that space, and how 397 00:22:48,920 --> 00:22:50,359 Speaker 1: do you think is the best way to play it. 398 00:22:51,920 --> 00:22:56,800 Speaker 1: So we're really excited about cybersecurity. It's the most it's 399 00:22:56,840 --> 00:22:59,840 Speaker 1: the largest team within within our portfolio. We have a 400 00:23:00,000 --> 00:23:05,040 Speaker 1: publicly list todts uh Sphere Alpha with the ticker SPRX, 401 00:23:05,480 --> 00:23:08,359 Speaker 1: and cybersecurity is one of the largest teams within that 402 00:23:08,960 --> 00:23:15,200 Speaker 1: that that portfolio. We love the space for several several reasons. 403 00:23:15,800 --> 00:23:19,120 Speaker 1: One of them is as architectures have changed and data 404 00:23:19,280 --> 00:23:24,840 Speaker 1: is no longer centralized. People are using either multiple devices 405 00:23:25,359 --> 00:23:28,159 Speaker 1: or they're using data that store the cloud or at 406 00:23:28,240 --> 00:23:33,080 Speaker 1: multiple clouds. So this change in architecture requires completely different 407 00:23:33,160 --> 00:23:38,080 Speaker 1: cybersecurity solutions then you would have needed several years ago. 408 00:23:38,240 --> 00:23:40,600 Speaker 1: So there are several of the space is pretty fragmented. 409 00:23:40,960 --> 00:23:43,399 Speaker 1: There are several different areas that we like and we 410 00:23:43,520 --> 00:23:47,920 Speaker 1: focus on that have over twenty up growth of just 411 00:23:48,119 --> 00:23:51,920 Speaker 1: the end market. Endpoint security is one of them. Here 412 00:23:52,000 --> 00:23:56,120 Speaker 1: we like companies like crowd strikes. Another area is securing 413 00:23:56,240 --> 00:23:59,359 Speaker 1: workloads to the cloud and within the clouds. Here a 414 00:23:59,480 --> 00:24:02,680 Speaker 1: name is the scaler. And then for people that want 415 00:24:02,720 --> 00:24:05,480 Speaker 1: to play a more platform alo approach, power out on 416 00:24:05,600 --> 00:24:08,760 Speaker 1: networks is a good way to play where they play 417 00:24:08,800 --> 00:24:14,240 Speaker 1: both on the endpoint UM and the traditional firewall firewall products. 418 00:24:15,240 --> 00:24:18,160 Speaker 1: What about AI UM it's something we hear so much 419 00:24:18,200 --> 00:24:22,680 Speaker 1: about and you know, investors put so much faith in it. Obviously, 420 00:24:22,800 --> 00:24:24,920 Speaker 1: eventually the machines are going to turn against us and 421 00:24:25,000 --> 00:24:26,840 Speaker 1: then you'll feel guilty about all the money you made. 422 00:24:26,920 --> 00:24:30,880 Speaker 1: But is it a good place to go into right now? Well? Yeah, 423 00:24:30,920 --> 00:24:33,520 Speaker 1: So it's very interesting because it's been a team for 424 00:24:33,640 --> 00:24:36,359 Speaker 1: us over the past few years, but we really didn't 425 00:24:36,400 --> 00:24:39,800 Speaker 1: have any significant investments and as there weren't any ways 426 00:24:39,880 --> 00:24:43,720 Speaker 1: to play that scale. And over the past year we've 427 00:24:43,760 --> 00:24:47,000 Speaker 1: seen a lot of developments where AI is becoming at 428 00:24:47,040 --> 00:24:51,840 Speaker 1: the core of many processes. So even back to cybersecurity, 429 00:24:52,080 --> 00:24:53,920 Speaker 1: even if you look at cybersecurity, a lot of the 430 00:24:54,000 --> 00:24:58,080 Speaker 1: new products are AI based. So Crowdstrate products are AI 431 00:24:58,160 --> 00:25:01,520 Speaker 1: and machine learning based this kaler's products, same thing. So 432 00:25:02,280 --> 00:25:06,520 Speaker 1: it's really gaining mainstream adoption. And this is just for 433 00:25:06,760 --> 00:25:10,480 Speaker 1: running like processes that you wouldn't necessarily be able to 434 00:25:10,560 --> 00:25:14,840 Speaker 1: even do manually. Right. Uh, this algorithms can pick up 435 00:25:14,880 --> 00:25:17,960 Speaker 1: on a normally is by just by training training the model. 436 00:25:18,080 --> 00:25:21,680 Speaker 1: So we think is going to gain adoption to even 437 00:25:21,800 --> 00:25:26,879 Speaker 1: more mainstream like autonomous driving. We still believe that several 438 00:25:27,000 --> 00:25:30,200 Speaker 1: years away because it is a pretty complex problem, but 439 00:25:30,359 --> 00:25:36,160 Speaker 1: we do see AI is gaining pretty uh pretty broad adoption. 440 00:25:36,720 --> 00:25:40,040 Speaker 1: Avana just real quick thirty seconds. Bloomberg Broker story yesterday 441 00:25:40,080 --> 00:25:44,280 Speaker 1: that Apple may slow some hiring in certain businesses and 442 00:25:44,359 --> 00:25:46,600 Speaker 1: that we've seen that from other companies. We've seen that 443 00:25:46,640 --> 00:25:49,119 Speaker 1: from other companies. Do you get a sense of Silicon 444 00:25:49,240 --> 00:25:54,000 Speaker 1: Valley is kind of gearing up for a recession? Yeah? Absolutely. 445 00:25:54,040 --> 00:25:56,919 Speaker 1: I mean at this point we are at a at 446 00:25:56,960 --> 00:26:00,600 Speaker 1: a point where recession is almost a foregone conclusion. Um, 447 00:26:00,880 --> 00:26:03,280 Speaker 1: We're we trucked a lot of industrial data points and 448 00:26:03,560 --> 00:26:08,480 Speaker 1: things really became really really turned even since since March, 449 00:26:08,560 --> 00:26:13,240 Speaker 1: we started seeing the trucking market soft and consumer discretionary soften, 450 00:26:13,520 --> 00:26:18,159 Speaker 1: and that's really now just been affecting brother at the 451 00:26:18,240 --> 00:26:21,320 Speaker 1: broad market. So things have just spread to like manufacturing, 452 00:26:21,800 --> 00:26:24,560 Speaker 1: things have spread to technology. So we're gonna see this 453 00:26:24,680 --> 00:26:29,640 Speaker 1: from everybody. Microsoft said that they're gonna slow hiring thing. 454 00:26:30,119 --> 00:26:32,399 Speaker 1: They're slowing hiring all right, Evana, thank you so much 455 00:26:32,400 --> 00:26:34,679 Speaker 1: for joining us. Ivana de Levska, founder and chief investment 456 00:26:34,760 --> 00:26:38,919 Speaker 1: Officer of Spear invest getting a update on all things technology. 457 00:26:41,760 --> 00:26:44,399 Speaker 1: Nationale Basket joins is here in a Bloomberg Interactive broker 458 00:26:44,440 --> 00:26:47,360 Speaker 1: studio for our next question on what're bringing our next guest, 459 00:26:47,400 --> 00:26:49,840 Speaker 1: we'll talk a little fintech. Yeah, it's perfect timing to 460 00:26:50,000 --> 00:26:52,720 Speaker 1: have Matt's left chin with us. He's the CEO of 461 00:26:52,840 --> 00:26:55,879 Speaker 1: a firm. It's just the day after big bank earnings, guys, 462 00:26:56,000 --> 00:26:59,119 Speaker 1: when we have had some optimism on the consumer, but 463 00:26:59,240 --> 00:27:01,040 Speaker 1: it left a lot of investors with a lot of 464 00:27:01,119 --> 00:27:04,239 Speaker 1: worry that a lot of consumers around the country might 465 00:27:04,280 --> 00:27:08,479 Speaker 1: be buying basic goods on credit given the inflationary crunch. 466 00:27:08,600 --> 00:27:11,480 Speaker 1: And so Max, you're a great person to talk to 467 00:27:11,600 --> 00:27:14,680 Speaker 1: about the real state that the consumer is in. You know, 468 00:27:14,960 --> 00:27:18,280 Speaker 1: you're buy now, pay later. Craze has really become so 469 00:27:18,400 --> 00:27:20,840 Speaker 1: popular in the last couple of years. It's now taking 470 00:27:20,880 --> 00:27:23,399 Speaker 1: different shapes. How are you seeing the health of the 471 00:27:23,440 --> 00:27:30,320 Speaker 1: consumer when inflation is just troubling them everywhere? Thank you 472 00:27:30,400 --> 00:27:34,040 Speaker 1: for having me, I think I would so. Summer right 473 00:27:34,160 --> 00:27:38,960 Speaker 1: is as still healthy but concerned. We saw it just 474 00:27:39,240 --> 00:27:43,000 Speaker 1: the fourth or July weekend, really healthy spending. So we 475 00:27:43,440 --> 00:27:46,880 Speaker 1: you know, ten x in concert tickets. People are trying 476 00:27:46,880 --> 00:27:49,320 Speaker 1: to get out COVID is over. They can't take it anymore. 477 00:27:49,359 --> 00:27:52,240 Speaker 1: They gotta go see a concert. Airline purchases up three 478 00:27:52,359 --> 00:27:56,200 Speaker 1: x year on year. Bridle is really healthy. You know, 479 00:27:56,280 --> 00:27:58,600 Speaker 1: it's the year of weddings. People are finally getting married 480 00:27:58,640 --> 00:28:01,240 Speaker 1: after all the postponements, and so there's a lot of 481 00:28:01,880 --> 00:28:05,440 Speaker 1: good what I would consider to be healthy spending. That said, 482 00:28:05,760 --> 00:28:09,400 Speaker 1: just in our conversations with our consumers surveys, we see 483 00:28:09,640 --> 00:28:13,720 Speaker 1: that vast majority are concerned about inflation. They're spending power 484 00:28:14,040 --> 00:28:18,879 Speaker 1: is weakening fairly quickly. They're turning to Binopaulator and Affirm 485 00:28:18,920 --> 00:28:22,120 Speaker 1: in particular to stretch their dollar. And so you're right there, 486 00:28:22,200 --> 00:28:24,359 Speaker 1: there's some something to be worried about in the horizon, 487 00:28:24,440 --> 00:28:27,879 Speaker 1: but for the moment, they're still feeling pretty good. So 488 00:28:28,160 --> 00:28:30,360 Speaker 1: Max talked to us about I'm looking at your stock 489 00:28:30,440 --> 00:28:33,440 Speaker 1: down seventy year, Dad, I know a lot of the 490 00:28:33,480 --> 00:28:36,719 Speaker 1: tech stocks have taken it on the chin here uh 491 00:28:36,840 --> 00:28:41,520 Speaker 1: fintech in particular. Kind of what do you tell your investors, 492 00:28:41,680 --> 00:28:45,760 Speaker 1: your employees about kind of the future of the of 493 00:28:45,840 --> 00:28:48,560 Speaker 1: the company, how the prospects for the company as it 494 00:28:48,600 --> 00:28:54,040 Speaker 1: relates to its stock price. I think most, if not 495 00:28:54,440 --> 00:28:57,400 Speaker 1: I hope almost all of my employees and certainly many 496 00:28:57,480 --> 00:29:01,400 Speaker 1: of my investors joined the affirm mission because they believe 497 00:29:01,440 --> 00:29:04,320 Speaker 1: in it and are very much concerned with the long 498 00:29:04,440 --> 00:29:07,200 Speaker 1: term as opposed to the immediate. We're a pretty good 499 00:29:07,200 --> 00:29:09,960 Speaker 1: company as far as uh down stocks are concerned. But 500 00:29:10,880 --> 00:29:14,320 Speaker 1: we've been executing really, really well. If you look at 501 00:29:14,440 --> 00:29:17,680 Speaker 1: our core the earnings. We've only been public for just 502 00:29:18,120 --> 00:29:20,920 Speaker 1: over a year and a half. We continue to really 503 00:29:21,000 --> 00:29:23,280 Speaker 1: perform and deliver all the numbers that we said we would. 504 00:29:23,760 --> 00:29:26,720 Speaker 1: We continue to grow, we continue to maintain all the 505 00:29:26,800 --> 00:29:30,560 Speaker 1: credit metrics that we've committed to. So I'm just very 506 00:29:30,640 --> 00:29:33,240 Speaker 1: very focused on delivering this long term value to my shareholders, 507 00:29:33,240 --> 00:29:35,400 Speaker 1: and I think my employees are very supportive of that. 508 00:29:36,560 --> 00:29:39,600 Speaker 1: Are you concerned at all about accumulating debt when it 509 00:29:39,680 --> 00:29:42,240 Speaker 1: comes to using this model. I mean, we're already talking 510 00:29:42,280 --> 00:29:45,440 Speaker 1: about people switching more from using their debit cards to 511 00:29:45,520 --> 00:29:48,719 Speaker 1: using their credit cards. UM. It's something that also has 512 00:29:48,760 --> 00:29:50,400 Speaker 1: been a warning. UM. I want to say from some 513 00:29:50,520 --> 00:29:53,080 Speaker 1: of the major investors in the market at the moment, 514 00:29:53,480 --> 00:29:57,400 Speaker 1: is that something you're concerned about leverage? UM. I am 515 00:29:57,480 --> 00:30:01,760 Speaker 1: concernedout leverage, but I would argue that folks that are 516 00:30:01,960 --> 00:30:04,280 Speaker 1: turning their eye to and B n p L are 517 00:30:04,280 --> 00:30:07,240 Speaker 1: concerned about the exact wrong thing. It's credit cards that 518 00:30:07,280 --> 00:30:10,960 Speaker 1: should be worried about. There's the by now, pay later. 519 00:30:11,120 --> 00:30:13,640 Speaker 1: Credit cards are by now and pay forever. As soon 520 00:30:13,720 --> 00:30:15,680 Speaker 1: as you swipe that card, you're gonna start paying interest 521 00:30:15,720 --> 00:30:19,080 Speaker 1: and interest on interest. Vast majority of Americans are revolving 522 00:30:19,440 --> 00:30:22,200 Speaker 1: the very very small percentage of people who really understand 523 00:30:22,440 --> 00:30:24,640 Speaker 1: what their credit card terms and conditions say. If you 524 00:30:24,680 --> 00:30:27,720 Speaker 1: look at a firm, it's a much about alternative. We 525 00:30:27,800 --> 00:30:30,840 Speaker 1: don't charge lead fees, we don't do differred interest. We 526 00:30:31,240 --> 00:30:34,440 Speaker 1: make sure that you cannot pay more than we showed 527 00:30:34,480 --> 00:30:36,280 Speaker 1: you on the very first page when you're signing up 528 00:30:36,280 --> 00:30:40,080 Speaker 1: for the transaction, and we approve or decline every single 529 00:30:40,200 --> 00:30:43,240 Speaker 1: transaction a consumer asks for it, which allows us to 530 00:30:43,320 --> 00:30:47,000 Speaker 1: be much safer as a lender. But also allows consumers 531 00:30:47,120 --> 00:30:50,560 Speaker 1: to be very clear as to when they're over attending themselves. 532 00:30:50,640 --> 00:30:53,160 Speaker 1: So I'm a huge believer. Obviously I'm a little bit 533 00:30:53,200 --> 00:30:56,240 Speaker 1: biased by not appealing a model, but beyond that, I'm 534 00:30:56,480 --> 00:30:59,360 Speaker 1: I'm a believer in it as a replacement for credit cards. 535 00:30:59,520 --> 00:31:02,800 Speaker 1: I'm really curious, what should you not buy now pay 536 00:31:02,920 --> 00:31:05,080 Speaker 1: later with. You know, there's a lot of stories about 537 00:31:05,600 --> 00:31:08,000 Speaker 1: you know, a lot of consumers putting a lot of 538 00:31:08,080 --> 00:31:10,840 Speaker 1: money on credit on by now pay later, just kind 539 00:31:10,840 --> 00:31:13,560 Speaker 1: of spreading out their financial lives in a significant way, 540 00:31:14,000 --> 00:31:17,560 Speaker 1: and finances are starting to get stretched under this inflationary environment. 541 00:31:19,560 --> 00:31:23,000 Speaker 1: And I really believe that byompulator is a better alternative 542 00:31:23,040 --> 00:31:25,800 Speaker 1: to credit cards. I think, if you're revolving and revolving forever, 543 00:31:25,960 --> 00:31:27,760 Speaker 1: just because card cards have been around, can you buy 544 00:31:27,800 --> 00:31:32,719 Speaker 1: anything on it? You know, we are primarily offered at 545 00:31:32,760 --> 00:31:35,200 Speaker 1: the integrated point of sale, so there are many things 546 00:31:35,360 --> 00:31:38,360 Speaker 1: that are not yet integrated. Plenty of places for us 547 00:31:38,440 --> 00:31:41,400 Speaker 1: to go and partner with merchants. That said, we do 548 00:31:41,560 --> 00:31:44,600 Speaker 1: believe that byopay later is a better model and should 549 00:31:44,640 --> 00:31:47,520 Speaker 1: be used ultimately for everything. Everywhere you think you should 550 00:31:47,560 --> 00:31:49,680 Speaker 1: use your credit card, I think you should stop and 551 00:31:49,760 --> 00:31:53,400 Speaker 1: think and switch to a firm. Alright, Max, great stuff. 552 00:31:53,400 --> 00:31:55,760 Speaker 1: I really appreciate you taking some time out of the day, 553 00:31:55,800 --> 00:32:00,360 Speaker 1: Max Election, founder and CEO of the company called firm. 554 00:32:00,920 --> 00:32:04,200 Speaker 1: A f r M is the nastack symbol you can 555 00:32:04,240 --> 00:32:06,720 Speaker 1: type into your Bloomberg terminal to get a sense of 556 00:32:06,760 --> 00:32:08,560 Speaker 1: what's going on there in the buy now, pay later space, 557 00:32:08,600 --> 00:32:11,560 Speaker 1: which is a fascinating space, hnale Um and I think 558 00:32:11,600 --> 00:32:13,600 Speaker 1: investors are just trying to get a handle what the 559 00:32:13,720 --> 00:32:16,440 Speaker 1: risk profile is, especially as interest rates start to rise. 560 00:32:16,520 --> 00:32:19,040 Speaker 1: I think it's an interesting option for consumers, but there 561 00:32:19,040 --> 00:32:20,680 Speaker 1: are a lot of questions. You know, in the past, 562 00:32:20,720 --> 00:32:22,840 Speaker 1: there's been a lot of behaviors like you can and 563 00:32:22,960 --> 00:32:24,320 Speaker 1: you can't do this with a firm, by the way, 564 00:32:24,640 --> 00:32:28,080 Speaker 1: but by by now pay later on credit and so 565 00:32:28,280 --> 00:32:30,840 Speaker 1: you do see some double averaging out there. But again 566 00:32:30,960 --> 00:32:36,200 Speaker 1: we're gonna leave Max outill clear in this one sale. 567 00:32:36,200 --> 00:32:38,360 Speaker 1: Thanks so much for joining us. Shall Bass that covers 568 00:32:38,360 --> 00:32:40,680 Speaker 1: all things Wall Street for us, and we appreciate her 569 00:32:41,520 --> 00:32:46,120 Speaker 1: chiming in here with Max Election. Thanks for listening to 570 00:32:46,120 --> 00:32:49,640 Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to 571 00:32:49,720 --> 00:32:53,840 Speaker 1: interviews of Apple Podcasts or whatever podcast platform you prefer 572 00:32:54,280 --> 00:32:58,240 Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three, 573 00:32:58,600 --> 00:33:01,120 Speaker 1: put on Falsewheeney. I'm on twit her at pt Sweeney 574 00:33:01,200 --> 00:33:03,840 Speaker 1: Before the podcast. You can always catch us worldwide at 575 00:33:03,880 --> 00:33:04,640 Speaker 1: Bloomberg Radio