WEBVTT - Surveillance: Ford's Electric Future 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jailey. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.440 Bloomberg dot Com, and of course on the Bloomberger. Let's 0:00:27.440 --> 0:00:29.680 bring in our market guest to kick off this hour, 0:00:29.680 --> 0:00:33.120 Scott ran is with US Wells Fargo Managements UH senior 0:00:33.280 --> 0:00:37.919 global equity strategists, and he joins us here from Missouri. 0:00:38.080 --> 0:00:40.800 As he likes to remind me that I like to say, Um, Scott, 0:00:40.840 --> 0:00:43.800 good to have you here. Uh, remarkable that we're kind 0:00:43.800 --> 0:00:45.720 of at the end of this year, after what a 0:00:45.800 --> 0:00:47.960 year it's been. What do you make though of Once 0:00:48.000 --> 0:00:51.680 again we continue to see like global equity records taken 0:00:51.800 --> 0:00:55.080 out one after another. Well, Carol, it has been a 0:00:55.080 --> 0:00:58.240 crazy year and these record highs. You know, the markets 0:00:58.280 --> 0:01:01.000 are definitely higher than were where we thought it was 0:01:01.040 --> 0:01:03.000 going to be at the end of this year. But 0:01:03.200 --> 0:01:07.240 you know, Matt mentioned bets on economic recovery and whether 0:01:07.280 --> 0:01:12.960 you're looking at commodities, aluminum, um, you know what what 0:01:13.040 --> 0:01:18.080 the tenure yield is doing, what sectors are performing, industrials, 0:01:18.160 --> 0:01:21.080 you know, have been a good performer. So these economically 0:01:21.200 --> 0:01:25.240 sensitive sectors, these asset classes that are sensitive to a 0:01:25.319 --> 0:01:29.080 continuation of the economy have done well. And clearly the 0:01:29.120 --> 0:01:33.920 market has has counted on additional stimulus from Congress. Who knows, 0:01:34.000 --> 0:01:36.559 you know, whether we get two thousand dollars or stick 0:01:36.600 --> 0:01:39.200 with the six I think it's safe to say probably 0:01:39.200 --> 0:01:42.759 you're going to see even more stimulus from Congress. Um, 0:01:43.440 --> 0:01:46.440 good virus news. You know, we keep getting good virus news. 0:01:46.480 --> 0:01:49.080 The markets anticipated that for a long time, so I 0:01:49.080 --> 0:01:51.160 think it should be no surprise that we have multiple 0:01:53.040 --> 0:01:55.080 good Wait, good virus news you mean in terms of 0:01:55.120 --> 0:01:58.880 the vaccines and make good vaccine exactly. I'm sorry, Carol, Yeah, 0:01:59.000 --> 0:02:02.400 good vaccine news is. Certainly the virus news has has 0:02:02.480 --> 0:02:04.920 has not been good. But I think the market has 0:02:04.960 --> 0:02:07.640 a lot of confidence that there's a very very bright 0:02:07.760 --> 0:02:10.280 light at the end of the tunnel. Um. Certainly we 0:02:10.360 --> 0:02:12.160 feel there's a bright light at the end of the tunnel, 0:02:12.160 --> 0:02:15.079 and we're looking for let's say, eight percent return in 0:02:15.120 --> 0:02:20.240 the sp the course, absolutely, there are a lot of 0:02:20.240 --> 0:02:23.320 good virus stories. Well here at least there are stories 0:02:23.560 --> 0:02:26.640 of countries looking at different viruses so they can add 0:02:26.639 --> 0:02:30.040 more to their arsenal countries speeding up the virus rollout 0:02:30.080 --> 0:02:33.200 so they can get herd immunity done faster. Of course, 0:02:33.240 --> 0:02:36.200 we had the nova vex story yesterday, so it looks 0:02:36.240 --> 0:02:40.519 like um more companies going to be offering are joining 0:02:40.520 --> 0:02:44.640 the fight offering a virus vaccine. Here, Scott, let me 0:02:44.639 --> 0:02:47.400 ask you what you think about consumers, because Larry Summers 0:02:47.440 --> 0:02:50.200 wrote an interesting op ed for US yesterday. He's taking 0:02:50.200 --> 0:02:52.800 a lot of heat for saying he doesn't think consumers 0:02:52.800 --> 0:02:55.560 should get two thousand dollar checks. But I think, um, 0:02:56.280 --> 0:02:58.400 there are a lot of populist politicians out there that 0:02:58.400 --> 0:03:00.720 would disagree with him, and it's fairly likely. Do you 0:03:00.760 --> 0:03:03.600 think consumers are really gonna sit on that money, um 0:03:03.639 --> 0:03:05.799 and not go out and spend it? Or are they 0:03:05.880 --> 0:03:10.520 just waiting for a chance for restaurants to open, for 0:03:10.639 --> 0:03:14.240 airlines to be safe again, for the sun to come 0:03:14.240 --> 0:03:17.680 out and make motorcycling more fun. I mean, I feel 0:03:17.680 --> 0:03:19.760 like if you gave me two thousand dollars, I would 0:03:19.760 --> 0:03:23.040 have an earmark for spending pretty quick. Man. I think 0:03:23.080 --> 0:03:25.080 if I had two thousand in my pocket, I probably 0:03:25.080 --> 0:03:26.960 would spend it. I can guarantee you that my twenty 0:03:27.040 --> 0:03:30.120 nine year old daughter would, So you know, whether you know, 0:03:30.160 --> 0:03:33.560 six doesn't seem like a lot to me. Now, clearly 0:03:33.600 --> 0:03:36.160 we're borrowing a lot of money, uh, and that is 0:03:36.200 --> 0:03:39.440 an issue. But it all comes down really to consumer spending. 0:03:39.480 --> 0:03:41.800 And I think really this last round of stimulus that 0:03:41.880 --> 0:03:44.720 was out there, the direct payments to consumers, a lot 0:03:44.720 --> 0:03:47.600 of that money was saved. And so you know, what 0:03:47.680 --> 0:03:51.440 we want is people out there spending money. They need 0:03:51.440 --> 0:03:54.560 to be confident, they need to have jobs. But now 0:03:54.640 --> 0:03:56.360 you know, you see a picture of Times Square and 0:03:56.400 --> 0:03:58.760 there's not much going on there. But in most parts 0:03:58.800 --> 0:04:01.360 of the country, I mean, if you're driving around, I 0:04:01.400 --> 0:04:05.040 don't care if it's a Tuesday afternoon or Saturday afternoon. Uh, 0:04:05.080 --> 0:04:07.480 there's a ton of traffic. It seems like it's back 0:04:07.520 --> 0:04:10.680 to about a dent. And you know, the only reason 0:04:10.760 --> 0:04:13.200 you would even know that there's anything going on in 0:04:13.320 --> 0:04:15.720 terms of a pandemic as you look over and somebody's 0:04:15.800 --> 0:04:17.720 riding in their car with a mask on. So I 0:04:17.720 --> 0:04:20.320 think people want to get out, they want to spend money, 0:04:20.360 --> 0:04:23.240 they want to go to restaurants and bars. Um, they're 0:04:23.279 --> 0:04:26.960 going to certainly spend whether it's six or two thousand dollars. 0:04:27.360 --> 0:04:30.360 They're going to spend some of that money. But you know, 0:04:30.560 --> 0:04:35.880 we certainly need consumer spending to be strong to keep going, 0:04:36.440 --> 0:04:39.600 to keep this recovery moving ahead. So, okay, I'm listening 0:04:39.640 --> 0:04:41.599 to what you're saying, Scott, But there are millions of 0:04:41.640 --> 0:04:44.240 Americans who if they get two thousand dollars or if 0:04:44.240 --> 0:04:46.560 they get a few hundred dollars a week more, it's 0:04:46.560 --> 0:04:49.040 really about keeping a roof over their heads and food 0:04:49.040 --> 0:04:52.080 on the table. And I do wonder when does the 0:04:52.160 --> 0:04:55.159 equity markets, the financial markets kind of catch up with 0:04:55.200 --> 0:04:57.640 what's going on, certainly in the United States, you know, 0:04:57.720 --> 0:05:01.080 in a big swath of our country. Well, Carol, you're 0:05:01.080 --> 0:05:04.520 you're exactly right, because you know, while many people would 0:05:04.600 --> 0:05:07.120 use that six d or two thousand dollars for for 0:05:07.279 --> 0:05:09.800 discretionary things, not you know, just things they want, not 0:05:09.920 --> 0:05:12.160 things they need, there's a large number of people, as 0:05:12.200 --> 0:05:14.560 you pointed out, I mean, they're paying rent, they're making 0:05:14.600 --> 0:05:19.320 a car payment, you know, the essential uh types of things. 0:05:19.400 --> 0:05:25.560 So I think that the market is looking well down 0:05:25.640 --> 0:05:28.440 the road, not just as to what's going on here 0:05:28.960 --> 0:05:32.000 in the US, but globally as well. Now, have stocks 0:05:32.040 --> 0:05:35.680 come far uh and fast. They certainly have. We all 0:05:35.720 --> 0:05:38.080 know that. But I think that you know, if we 0:05:38.240 --> 0:05:42.280 get some improving news, we're gonna keep going a little 0:05:42.279 --> 0:05:44.839 bit higher. Here. We've got a one seventy five number 0:05:44.880 --> 0:05:47.480 for the S and P five hundred at the end 0:05:47.600 --> 0:05:50.440 of next year. And if you look at the valuation, 0:05:50.480 --> 0:05:52.479 if you look at where interest rates are, if you 0:05:52.560 --> 0:05:55.760 look up the pent up type of demand that's out there, 0:05:55.960 --> 0:05:59.520 those valuations don't look overly stretched. Certainly, They're nothing like 0:05:59.640 --> 0:06:02.400 March of two thousand. So I think I think the 0:06:02.440 --> 0:06:07.800 market is not meaningfully overvalued, but certainly anticipating quite a 0:06:07.800 --> 0:06:10.360 bit of good news. Uh, certainly on the consumer front 0:06:10.400 --> 0:06:12.760 and the vaccine front. All right, all right, Scott, thanks 0:06:12.760 --> 0:06:15.360 so much for joining us. Thanks guys, Thank Carol and 0:06:15.440 --> 0:06:17.400 I both thank you. Scott's been a long time. Glad 0:06:17.400 --> 0:06:20.599 we could talk to you today, Scott, Wealth Bargo Investment, 0:06:20.960 --> 0:06:23.000 Happy New Year's Well, it's good to see you again. 0:06:23.040 --> 0:06:33.960 Thanks so much for joining us. Let's bring in Matt 0:06:34.000 --> 0:06:37.560 Born back. He's Morgan Stanley, head of Global macro Strategy, 0:06:37.640 --> 0:06:41.800 joining us on this Tuesday. So Matt um, first of all, 0:06:42.320 --> 0:06:44.320 the Brexit news, we are seeing a play out there's 0:06:44.440 --> 0:06:48.920 enthusiasm around the globe, whether it's the Brexit news finally 0:06:49.000 --> 0:06:52.479 you know, getting resolved, whether it's another round of pandemic 0:06:52.480 --> 0:06:54.919 relief here in the United States, there's so much, it 0:06:54.960 --> 0:06:58.120 seems financial market enthusiasm. Does it make sense to you 0:06:58.160 --> 0:07:00.880 and does it carry over into twenty one in your view? 0:07:01.200 --> 0:07:04.360 Thanks Carol. Yeah, I think it does, um, you know, 0:07:04.400 --> 0:07:07.400 at least for the first several months of the year. 0:07:07.760 --> 0:07:11.240 You know, I think, um, the amount of liquidity that 0:07:11.360 --> 0:07:15.480 central banks are providing to markets, not not just in 0:07:15.520 --> 0:07:18.440 the US, of course, but but outside of the US 0:07:18.520 --> 0:07:22.960 as well, UH is going to be pretty formidable, and 0:07:23.080 --> 0:07:24.960 I think markets are going to have a hard time 0:07:25.760 --> 0:07:31.680 UH not incorporating this liquidity UH into their prices. So 0:07:31.920 --> 0:07:35.440 we we do think that risk on is the trade 0:07:36.160 --> 0:07:37.960 for them for the first couple of months of the 0:07:38.040 --> 0:07:41.720 year certainly, And then I think once the vaccine becomes 0:07:41.720 --> 0:07:45.560 more broadly distributed around the US, around the rest of 0:07:45.600 --> 0:07:49.160 the developed world kind of made year, um, then I 0:07:49.200 --> 0:07:52.119 think it becomes more difficult for markets in the second half. 0:07:52.560 --> 0:07:54.680 How difficult in the second half. So what do you 0:07:54.880 --> 0:07:57.720 are you expecting kind of official corrections at that point? 0:07:57.720 --> 0:08:00.240 Because I do wonder about like, as you say, you know, 0:08:00.240 --> 0:08:01.960 there's a point where people say, wait, wait, wait, it's 0:08:01.960 --> 0:08:03.920 time for us to look at fundamentals again. Maybe this 0:08:04.040 --> 0:08:06.920 run up isn't justified. So what does the second half 0:08:06.960 --> 0:08:09.840 look like? Is it just a coming in the financial markets? 0:08:09.880 --> 0:08:14.360 There is an actually kind of okay, let's let's reprice everything. Well, 0:08:14.400 --> 0:08:18.720 I mean I would I would say consolidation, uh is 0:08:18.720 --> 0:08:20.640 is what it would be, you know, kind of front 0:08:20.640 --> 0:08:23.520 and center for for me. I think, um, you know, 0:08:23.560 --> 0:08:26.320 correct corrections. You know, we have had a couple of 0:08:26.400 --> 0:08:30.400 ten percent corrections in in the SMP five hundred, uh, 0:08:30.520 --> 0:08:33.280 you know, over the past several months. But you know, 0:08:33.360 --> 0:08:36.320 they they just they didn't last. Um and and so 0:08:36.400 --> 0:08:39.200 it's really tough, I think to call corrections during a 0:08:39.240 --> 0:08:44.520 period of time when liquidity uh is so overwhelming. I mean, 0:08:44.520 --> 0:08:46.959 and you know, again I think bitcoin. You can kind 0:08:46.960 --> 0:08:49.959 of see it in the price of bitcoin as well. Um, 0:08:50.080 --> 0:08:53.600 there's so much money being dumped into markets by central banks. 0:08:54.080 --> 0:08:56.440 UM investors have to find a place to put it 0:08:56.920 --> 0:08:59.720 um in either you know, you find a place that 0:08:59.760 --> 0:09:02.520 has some yield, and that's hard to do these days, 0:09:03.120 --> 0:09:05.760 or you're trying to find a place where prices just 0:09:05.840 --> 0:09:08.160 keep going up and up, and you can see that's 0:09:08.240 --> 0:09:14.120 that's happening in bitcoint these days. At what point is 0:09:14.800 --> 0:09:18.480 all of this optimism for a vaccine and a V 0:09:18.600 --> 0:09:24.400 shaped recovery post COVID priced in, Matthew? And how do 0:09:24.480 --> 0:09:29.120 you you know when we see something like um, Airbnb 0:09:29.840 --> 0:09:33.960 going for a hundred billion dollars um during COVID, it 0:09:34.000 --> 0:09:37.520 was only worth thirty billion dollars before COVID, Isn't that 0:09:37.559 --> 0:09:42.120 the froth that tells you something? Uh, you know, assets 0:09:42.120 --> 0:09:46.520 are overpriced here? Well, I mean, you know, equity is 0:09:46.640 --> 0:09:49.120 really not my my value wick um. But what I 0:09:49.120 --> 0:09:52.760 would say is two things. Number one, you know, markets 0:09:53.000 --> 0:09:58.559 typically priced things in uh you know, or almost entirely 0:09:58.600 --> 0:10:01.240 priced things in before they and so you know, if 0:10:01.240 --> 0:10:04.640 the market has its eye on the demand surge that 0:10:04.679 --> 0:10:10.959 should occur in services uh post vaccine distribution, i'd expect 0:10:11.000 --> 0:10:13.640 markets to to to to you know, to price that 0:10:13.760 --> 0:10:17.400 in by and large before the vaccine is completely distributed. 0:10:17.520 --> 0:10:19.199 So that would be the first way I to think 0:10:19.240 --> 0:10:21.640 about it. The second thing I would point to as 0:10:21.679 --> 0:10:25.080 the bond market. Um, you know, one of the reasons 0:10:25.120 --> 0:10:28.640 I think that yields in the US have not risen 0:10:28.720 --> 0:10:31.360 more than they have over the past couple of months, 0:10:31.840 --> 0:10:35.720 is because of the liquidity that's being distributed around markets. Now, 0:10:36.200 --> 0:10:39.000 if all of a sudden you see yields starts to 0:10:39.160 --> 0:10:43.839 rise more quickly, that would that would suggest that liquidity 0:10:44.760 --> 0:10:48.240 is not as ample as it was earlier. Um, and 0:10:48.320 --> 0:10:51.120 that might put uh, you know, kind of risky assets 0:10:51.120 --> 0:10:53.520 in more danger. But at this point, you know, you're 0:10:53.559 --> 0:10:55.880 not really seeing that the tenure treasury yield that's still 0:10:55.880 --> 0:10:58.760 below one per cent. So UM, I don't think we're 0:10:58.800 --> 0:11:01.120 there just yet. But those you the two things, the 0:11:01.160 --> 0:11:03.440 two ways I would think about it. So I gotta say, Matt, 0:11:03.480 --> 0:11:05.800 I love lists. I'm a list maker, and you've got 0:11:05.800 --> 0:11:09.120 a list of the top ten surprises. One that I 0:11:09.120 --> 0:11:10.960 thought that really stood out for me is you said 0:11:11.000 --> 0:11:14.880 immigration causes the northern lights to shine the brightest. You're 0:11:14.880 --> 0:11:20.360 looking at Canada. Yeah, absolutely, Well, we we've been bullish 0:11:20.480 --> 0:11:24.719 on the Canadian dollar for a healthy portion of two 0:11:24.800 --> 0:11:29.239 thousand twenty one UM and in our discussions with investors, 0:11:29.280 --> 0:11:32.120 you know what we had found certainly in the middle 0:11:32.160 --> 0:11:35.360 of the year, you know, but it continued throughout the 0:11:35.400 --> 0:11:40.200 course of two Uh. Is that people just are thinking 0:11:40.200 --> 0:11:43.079 that there are some structural issues with the Canadian economy, 0:11:43.559 --> 0:11:45.720 and so you know, we saw, gosh, wouldn't it be 0:11:46.640 --> 0:11:49.920 wouldn't it be a surprise if if these structural issues 0:11:50.160 --> 0:11:53.480 never really reared their heads UM, but some other issues 0:11:53.520 --> 0:11:58.079 like immigration actually carried the Canadian dollar even further higher UM. 0:11:58.080 --> 0:12:00.800 And so we decided to throw that into the mix 0:12:01.320 --> 0:12:04.640 for two one as as one of our top ten surprises. 0:12:06.360 --> 0:12:08.800 You know, I look through m A go, the m 0:12:08.800 --> 0:12:11.679 A go function on the Bloomberg, I see that there's 0:12:11.720 --> 0:12:16.559 a bigger premium Matthew being paid for Developed Asia assets 0:12:16.640 --> 0:12:19.320 right now. And I see one of your surprises is 0:12:19.360 --> 0:12:23.559 that developed market liquidity avoids emerging markets and drives a 0:12:23.679 --> 0:12:27.840 d M asset bubble. Why do you think we're ignoring 0:12:28.080 --> 0:12:30.800 emerging markets? I mean, they clearly come through this less 0:12:30.840 --> 0:12:35.199 scathed than everyone else. Yeah. Absolutely, Well, I mean the 0:12:35.440 --> 0:12:38.920 first thing to recognize is that, you know, the liquidity 0:12:38.960 --> 0:12:43.000 that's being provided by central banks UM is mostly occurring 0:12:43.040 --> 0:12:45.679 in developed markets. So it's the developed market central banks 0:12:45.679 --> 0:12:48.480 like the FED and the ECB and the Bank of 0:12:48.559 --> 0:12:52.040 Japan that are providing most of the liquidity that we've 0:12:52.040 --> 0:12:55.319 been talking about in our research, and so you have 0:12:55.400 --> 0:12:59.679 to recognize that the liquidity that's being provided, honestly, it 0:12:59.720 --> 0:13:03.080 doesn't have to go into risk assets. They could stay 0:13:03.120 --> 0:13:06.199 in bank deposit accounts, or it could stay in money 0:13:06.240 --> 0:13:09.800 market funds earning nothing if it wanted to. But you know, 0:13:10.040 --> 0:13:12.160 we don't think it wants to do that. We think 0:13:12.200 --> 0:13:14.600 it wants to go out in search of yield. And so, 0:13:15.200 --> 0:13:18.400 you know, this particular surprise that we wrote about just 0:13:18.559 --> 0:13:21.480 recognizes the fact that, look that the liquidity that's being 0:13:21.480 --> 0:13:26.920 produced in developed markets could in fact stay in developed markets. Um. 0:13:27.000 --> 0:13:29.040 And so we we started to think about, well, what 0:13:29.200 --> 0:13:32.920 would be a reason why the liquidity would not overflow 0:13:33.000 --> 0:13:36.880 the borders of developed markets into emerging markets, and ultimately, 0:13:37.280 --> 0:13:40.400 you know, it came down to the virus and um, 0:13:40.480 --> 0:13:44.160 the fact that you know, winter time for us in 0:13:44.200 --> 0:13:46.880 the northern hemisphere is not is not the same as 0:13:46.880 --> 0:13:48.960 winter time in the southern hemisphere. And so we just 0:13:49.320 --> 0:13:52.480 put two and two together and thought, well, maybe if 0:13:52.520 --> 0:13:55.760 if the virus has a resurgence in the southern hemisphere, 0:13:55.840 --> 0:14:00.160 that might uh, that might redirect that liquidity or eat 0:14:00.200 --> 0:14:03.440 that liquidity in developed markets, and and ultimately caused an 0:14:03.480 --> 0:14:05.920 acid bubble. Matthew, thanks so much for joining us. Matthew 0:14:05.960 --> 0:14:20.440 hornback there, Morgan Stanley, Global head of macro Strategy. Let's 0:14:20.480 --> 0:14:22.920 talk a bit about markets, if we may. Let's get 0:14:22.920 --> 0:14:25.080 to our guest, James Bevan is with us. You see 0:14:25.120 --> 0:14:28.480 c l A chief investment strategists joining us. Um James, 0:14:28.480 --> 0:14:30.600 how do you see it? How do you explain some 0:14:30.720 --> 0:14:32.160 of the trade? I do feel like we are in 0:14:32.200 --> 0:14:34.880 a market that reacts to headlines pretty quickly, whether they're 0:14:34.920 --> 0:14:37.360 negative or positive. You kind of get it out there 0:14:37.400 --> 0:14:41.120 pretty quickly. Indeed, right now, I would say that there 0:14:41.200 --> 0:14:44.400 is more appetite to perceive good news and statements made 0:14:44.760 --> 0:14:47.280 rather than worrying about bad news. And of course most 0:14:47.320 --> 0:14:49.760 news stories come with a bit of faith. So if 0:14:49.760 --> 0:14:51.880 you take the breaks as and nights than, for example, 0:14:52.200 --> 0:14:55.800 is unambiguously good news that there is no no deal, 0:14:56.200 --> 0:14:58.800 but it's certainly not good news to the services company 0:14:58.840 --> 0:15:01.760 news that's still facing our ambiguous future, and in particular 0:15:01.800 --> 0:15:05.320 financial services. Right now, in markets focusing on the good news, 0:15:08.280 --> 0:15:12.040 why do you think the pound isn't rallying more? James? 0:15:12.040 --> 0:15:14.040 I mean, I would have thought we heard so many 0:15:14.080 --> 0:15:18.960 forecasts that were bullush up to one, and especially on 0:15:19.000 --> 0:15:22.440 a day when the dollar is weaker once again, I 0:15:22.480 --> 0:15:26.640 would expect to see more than one thirty five in Sterling. Well, 0:15:26.680 --> 0:15:29.360 I certainly anticipate that we can see one forty five 0:15:29.480 --> 0:15:31.920 by the end of next year. But the plan still 0:15:32.040 --> 0:15:37.320 has really quite serious challenges ahead. So the Brexit deal 0:15:37.880 --> 0:15:40.000 is a step in the right direction, but it most 0:15:40.000 --> 0:15:43.360 certainly does not provide for the full resolution of the 0:15:43.400 --> 0:15:46.440 problems that the UK faces. So we will like to 0:15:46.520 --> 0:15:50.240 receive real growth in the UK economy of perhaps up 0:15:50.240 --> 0:15:53.240 to seven percentage points this year, but the UK is 0:15:53.240 --> 0:15:56.640 still poorly placed in terms of global free trade agreements. 0:15:56.680 --> 0:15:59.640 It's simply not made the progress that it wished. People 0:15:59.680 --> 0:16:01.880 say it's game to be easy. Actually, if you look 0:16:01.920 --> 0:16:05.000 at the regulatory luggage that the UK has to take 0:16:05.160 --> 0:16:09.400 the past of the Brexit deal, this issue in terms 0:16:09.440 --> 0:16:11.040 of getting free trade of the US is going to 0:16:11.120 --> 0:16:14.600 be really tricky. The Coordinator Chicken story isn't going away. 0:16:14.640 --> 0:16:17.200 And I think that these people concerned about the outlook 0:16:17.400 --> 0:16:22.280 the UK economy. What about the city James. You know, 0:16:22.280 --> 0:16:24.280 we've been talking a lot today about what happens to 0:16:24.480 --> 0:16:29.480 financial services there, and um there still hasn't been any 0:16:29.560 --> 0:16:33.320 kind of equivalency agreement. I don't know if that's gonna 0:16:33.360 --> 0:16:37.640 come even in Q one one. Do you see a 0:16:37.680 --> 0:16:40.520 lot of your h Do you see a lot of 0:16:40.520 --> 0:16:44.480 your colleagues moving back to Paris, moving back to Frankfurt, 0:16:44.520 --> 0:16:48.320 fleeing the city for the continent. Well, I would say 0:16:48.360 --> 0:16:51.000 that we have seen a general drift of both people 0:16:51.240 --> 0:16:56.400 and business activities to the Eurozone over the last four years, 0:16:56.400 --> 0:16:59.840 since the twenties sixteen Brexit vote. That was the main 0:17:00.320 --> 0:17:03.880 when the chief executives and boards of the major financial 0:17:03.960 --> 0:17:06.840 company said, Okay, guys, we've got to get ready. We 0:17:06.920 --> 0:17:08.760 know it's doing that happen. We don't know quite when, 0:17:08.880 --> 0:17:12.600 but let's position know what inevitably will happen. So I 0:17:12.600 --> 0:17:14.400 don't think it's going to come as a major shot 0:17:14.480 --> 0:17:20.160 to anybody, but many businesses already relocated ivor to Paris 0:17:20.320 --> 0:17:24.040 or to frank First. Yeah, definitely that migration, that trend 0:17:24.600 --> 0:17:27.040 is definitely something we've seen and continues. Hey, James, we're 0:17:27.040 --> 0:17:29.080 gonna leave it there. Thank you so much. James Bevan 0:17:29.520 --> 0:17:31.879 u c c L A chief investment strategist, have a 0:17:32.000 --> 0:17:43.640 good new year. We do want to talk about something 0:17:43.640 --> 0:17:45.840 that has definitely been kind of I've been obsessed with 0:17:45.880 --> 0:17:49.320 it a little bit since those Apple headlines about really 0:17:49.359 --> 0:17:52.600 aggressively again moving into the e V market. But we 0:17:52.600 --> 0:17:54.639 want to get some perspective because there's a lot going on. 0:17:54.720 --> 0:17:56.879 There has been a lot this past year, and a 0:17:56.920 --> 0:17:59.800 lot maybe in terms of expectations for the EV market. 0:18:00.840 --> 0:18:05.439 Mark Kaufman is with us Ford Motor Global Electrification Director 0:18:05.480 --> 0:18:08.280 and he joins us Uh, but a zoom on this 0:18:08.359 --> 0:18:10.360 Tuesday market. It is so good to have you here 0:18:10.359 --> 0:18:13.280 with Matt and myself. Matt's a car guy, loves talking 0:18:13.280 --> 0:18:15.399 about all things car, but I am really interested too 0:18:16.160 --> 0:18:18.920 as well. So tell me about the Apple news. Let's 0:18:18.920 --> 0:18:20.960 start there. How significant is that in your view? And 0:18:21.000 --> 0:18:23.560 it's not something going to happen tomorrow but in a 0:18:23.600 --> 0:18:29.320 few years, well, Carol, anyone who works in a traditional manufacturer, 0:18:29.560 --> 0:18:34.639 we're essentially going to expect disruption now from anyone that 0:18:34.720 --> 0:18:36.520 might be out there. Back I know a couple of 0:18:36.560 --> 0:18:39.720 years ago when Dyson was considering getting into the e 0:18:39.800 --> 0:18:42.439 V business. At that point you realize any consumer product 0:18:42.440 --> 0:18:44.960 company could come into the space besides a an you 0:18:45.040 --> 0:18:51.440 start up. So uh, it's it's very difficult. It's very 0:18:51.480 --> 0:18:56.840 expensive to the point where you know global um globally 0:18:56.880 --> 0:19:02.200 dominant companies like Ford and Folkswagen are getting together pooling resources. 0:19:02.640 --> 0:19:04.840 Can you tell us a little bit about your work 0:19:04.920 --> 0:19:09.640 with the German carmakers over here in Wolfsburg. Sure, Matt 0:19:10.200 --> 0:19:13.320 skill is so important, especially in the auto business. UM. 0:19:13.440 --> 0:19:16.240 So in a case when we have a platform, you know, 0:19:16.280 --> 0:19:18.959 most platforms have a range of products that it can 0:19:19.000 --> 0:19:21.320 be suited off of. Uh in Then in the case 0:19:21.359 --> 0:19:24.520 of our our partnership with VW, we had the the 0:19:24.560 --> 0:19:27.760 European market skews a little bit smaller than the US market, 0:19:28.320 --> 0:19:30.760 so we found there was an equal opportunity for both 0:19:30.800 --> 0:19:32.920 of us VW to get a bit more scale off 0:19:33.000 --> 0:19:35.719 off their platform, and for Ford it gave us an 0:19:35.720 --> 0:19:38.840 opportunity to have a product that's going to be slightly 0:19:39.200 --> 0:19:41.919 smaller than the product off of our dedicated platform that 0:19:41.960 --> 0:19:45.520 we have within our company. I know, one of the 0:19:45.520 --> 0:19:50.480 big problems here Mark is there just aren't enough charging stations. 0:19:50.760 --> 0:19:55.080 And although we hear from you know, partnerships like IONI 0:19:55.200 --> 0:19:57.280 that they're building them as quick as they can, they're 0:19:57.480 --> 0:20:00.280 they're certainly not building them quick enough to be ready 0:20:00.320 --> 0:20:03.359 for the demand that's coming in the next few years. 0:20:03.720 --> 0:20:08.080 How do you think that issue gets solved. Man, that's 0:20:08.200 --> 0:20:10.720 a great question. And we know a combination of both 0:20:10.800 --> 0:20:14.080 range anxiety and the ability to charge your electric vehicle 0:20:14.119 --> 0:20:17.119 when you're traveling our top of mind for consumers. We 0:20:17.160 --> 0:20:20.000 believe range anxiety as a as an example, are Mustang 0:20:20.040 --> 0:20:23.439 Maki as a range just over three hundred miles is 0:20:23.480 --> 0:20:26.359 helping on range anxiety. At the same time that that 0:20:26.480 --> 0:20:30.240 charging infrastructure continues to get built out every year, especially 0:20:30.240 --> 0:20:33.560 for the high power DC fast chargers um and it 0:20:33.560 --> 0:20:35.520 depends where you're at in the world, though a lot 0:20:35.560 --> 0:20:39.240 of consumers we're finding are still charging at their residence 0:20:39.280 --> 0:20:41.880 that they have that opportunity to because that certainly adds 0:20:41.920 --> 0:20:44.800 to the convenience of owning an EV. You know what's 0:20:44.800 --> 0:20:47.040 interesting too, though, is and I do wonder, you know, 0:20:47.560 --> 0:20:50.240 Mark safe to say, I think it's it's it's fair 0:20:50.320 --> 0:20:54.280 to kind of respect what test Lady lawn Musk did 0:20:54.359 --> 0:20:56.760 that kind of woke up the auto industry and so 0:20:57.040 --> 0:21:00.000 that you can, you know, maybe move faster than everybody 0:21:00.040 --> 0:21:02.480 anticipated when it came to the e V market. And 0:21:02.560 --> 0:21:05.119 I do wonder in terms of strategy and when you 0:21:05.160 --> 0:21:08.359 look at maybe what happens next year. You know, how 0:21:08.440 --> 0:21:11.200 has kind of the timetable changed dramatically and could have 0:21:11.320 --> 0:21:16.040 changed even more so, meaning sooner rather than later. Yeah, 0:21:16.040 --> 0:21:17.720 I would say as I as I look back at 0:21:18.560 --> 0:21:21.040 I know for me the biggest surprise on the year 0:21:21.080 --> 0:21:23.920 is just how quickly the European market has moved to 0:21:24.000 --> 0:21:25.639 NEVY adoption. I would say that was a little bit 0:21:25.680 --> 0:21:28.919 higher than what we had forecasted at this time last year. Uh. 0:21:28.960 --> 0:21:31.600 And part of that is you're seeing more products come 0:21:31.640 --> 0:21:34.520 out so as that EB offering is expanding from other 0:21:34.560 --> 0:21:38.560 manufacturers both RENA and VW having products in the market 0:21:39.400 --> 0:21:43.680 and the European markets. That has accelerated the growth. Uh. 0:21:43.720 --> 0:21:46.240 And at this point, um, you know, we're seeing in 0:21:46.560 --> 0:21:49.119 both Europe and China there there's a clear race for 0:21:49.240 --> 0:21:52.080 leadership there in the e V space. Mark Kaufman is 0:21:52.119 --> 0:21:56.160 still with us for Motor Global Electrification Director, and Mark, 0:21:56.200 --> 0:21:58.200 I want to hear about some of the products. As 0:21:58.200 --> 0:22:01.080 you can tell, I'm very close to the Ford family. 0:22:01.359 --> 0:22:06.639 I've spent a lot of time um uh with your boss. Um. 0:22:07.040 --> 0:22:11.520 I've Alan Mollally is a very close personal friend of mine. UH. 0:22:11.560 --> 0:22:15.200 And I wonder what's next you know, you've got them, 0:22:15.560 --> 0:22:19.359 You've got the Mocke, and you've got this partnership with Volkswagen. 0:22:19.480 --> 0:22:21.920 What else can you come out with that's gonna blow 0:22:21.960 --> 0:22:26.880 our minds? Well, first, coming late summer in twenty one, 0:22:26.960 --> 0:22:29.639 we've got the Mustang Maki GT so that is the 0:22:29.720 --> 0:22:34.680 performance version of that product. Um so we're super enthusiastic 0:22:34.720 --> 0:22:39.040 about that. You've just got fantastic fo horsepower, six hundred 0:22:39.040 --> 0:22:41.560 and thirty four foot pounds of instant torque in that 0:22:41.640 --> 0:22:45.520 EV so that's gonna delight customers in that space. But 0:22:45.560 --> 0:22:49.480