WEBVTT - Fed’s Preferred Inflation Metric Increases by Most in a Year 0:00:02.400 --> 0:00:10.680 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.920 Wait inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.200 America's most trusted business magazine, plus gloom wal Business finance 0:00:18.239 --> 0:00:22.280 and tech news. The Bloomberg Business Week Podcast with Carol 0:00:22.320 --> 0:00:25.800 Messer and Tim Stenebeck from Bloomberg Radio. 0:00:27.320 --> 0:00:30.040 Okay, so maybe not quite yet the time to crack 0:00:30.080 --> 0:00:32.560 open the perier, Joe, if I may. 0:00:32.520 --> 0:00:34.559 Say, really good pronunciation of that. 0:00:34.640 --> 0:00:35.919 I had to google it. 0:00:36.200 --> 0:00:40.120 Okay, why not. Mike mckey's here, We could do, we 0:00:40.120 --> 0:00:41.199 could do. It's a weep day. 0:00:41.400 --> 0:00:45.840 Let's talk about the report underline, Well, we'll talk about 0:00:45.840 --> 0:00:47.599 me with the price of Champa. Let's just bring Mike 0:00:47.640 --> 0:00:49.440 in because let's get to the report and what we got. 0:00:49.520 --> 0:00:52.320 It is the report Mike, we have been talking about 0:00:52.360 --> 0:00:54.600 for a while. Here, we know this is the one 0:00:54.600 --> 0:00:57.680 that the FED watches. Tell us what we got and 0:00:57.720 --> 0:00:59.600 why there was a bit of sigh of relief here. 0:01:00.440 --> 0:01:03.480 Well, the sigh of relief was it wasn't worse. The 0:01:04.080 --> 0:01:06.800 numbers came in on a month over month basis higher 0:01:06.800 --> 0:01:09.840 than they had in previous months. The core rate was 0:01:09.920 --> 0:01:12.040 up on a month over month basis, four tenths, which 0:01:12.120 --> 0:01:14.840 was the highest in a year, and it sounds terrible, 0:01:14.840 --> 0:01:17.520 but because of base effects and in the progress they've 0:01:17.520 --> 0:01:20.480 made on disinfilation on the year over year basis, we 0:01:20.600 --> 0:01:23.960 continued to see the PCE and the CORE go down, 0:01:24.280 --> 0:01:26.240 and that's what people want to see, because that's what 0:01:26.280 --> 0:01:29.600 the FED wants to see. We're still a ways from 0:01:29.720 --> 0:01:32.720 two percent if you're using CORE as sort of your 0:01:32.760 --> 0:01:36.640 measuring stick, at two point eight percent, but there was 0:01:36.720 --> 0:01:39.240 progress and the economy is not doing badly. People what 0:01:39.440 --> 0:01:43.840 personal income went up one percent and wages still went 0:01:43.959 --> 0:01:47.320 up four tenths of a percent, which is healthy. Spending 0:01:47.440 --> 0:01:49.360 was a little weak, but remember there was a lot 0:01:49.400 --> 0:01:51.800 of storms in January. People didn't go out. We know 0:01:51.960 --> 0:01:54.960 they didn't buy cars and things like that. So overall, 0:01:55.320 --> 0:01:59.280 this is the Goldilocks soft landing story continues. 0:01:59.400 --> 0:02:00.600 So break up Champagne. 0:02:00.600 --> 0:02:01.840 In other words, I. 0:02:01.800 --> 0:02:02.800 Knew you'd get around to that. 0:02:03.280 --> 0:02:04.640 It's only it's only two o'clock. 0:02:04.800 --> 0:02:07.440 Yes, yes, yes, go right ahead. 0:02:07.880 --> 0:02:11.079 So Mike remind us why this is the Fed's preferred 0:02:11.120 --> 0:02:14.240 measure of inflation. Why do we care so much about 0:02:14.240 --> 0:02:15.800 PCE and over CPI. 0:02:15.919 --> 0:02:19.600 For well, basically, the PCE is a bit broader, but 0:02:19.720 --> 0:02:23.399 it also is a little bit more reflective of what 0:02:23.480 --> 0:02:27.639 people are spending on. It includes a lot of imputed data, 0:02:27.720 --> 0:02:33.079 which is data that they try to figure out by 0:02:33.120 --> 0:02:36.400 measuring parts of the economy rather than just prices, because 0:02:36.680 --> 0:02:42.000 they don't have prices on things like financial portfolio management 0:02:42.120 --> 0:02:45.000 was one of the biggest movers, up five percent of 0:02:45.000 --> 0:02:47.040 the month because the markets are doing so well, right, 0:02:47.160 --> 0:02:48.840 so they're looking at the markets, and they're looking at 0:02:48.880 --> 0:02:50.600 the gain in the markets, and they're guessing sort of 0:02:50.760 --> 0:02:53.560 what the commissions would be et cetera, and the fees, 0:02:53.680 --> 0:02:57.040 and they impute a number from that, but that's not 0:02:57.120 --> 0:03:02.919 counted in the CPI. And for example, the CPI will 0:03:02.960 --> 0:03:08.800 measure what you pay for your monthly car insurance, whereas 0:03:08.840 --> 0:03:12.240 the PCU will measure what you pay and it also 0:03:12.400 --> 0:03:15.360 measures what value you get, in other words, how much 0:03:15.440 --> 0:03:20.600 will your policy pay if you're in an accident, And 0:03:20.639 --> 0:03:23.640 of course that has to keep likely going up because 0:03:23.680 --> 0:03:27.360 cars keep getting more expensive. So that's the kind of 0:03:27.400 --> 0:03:29.960 thing that's the difference between them, and so the FED 0:03:30.120 --> 0:03:33.240 just prefers it. They normally don't run very far apart, 0:03:33.320 --> 0:03:35.880 but they have been running far apart over the last year. 0:03:36.120 --> 0:03:38.920 Well, as an economist, I mean, what do you trust 0:03:38.960 --> 0:03:41.840 as really kind of telling the true picture of inflation? 0:03:41.920 --> 0:03:43.040 Because I do feel like there's a bit of a 0:03:43.040 --> 0:03:44.960 debate when it comes to some of the economic statistics 0:03:45.000 --> 0:03:47.280 that are out there about whether they not, you know, 0:03:47.440 --> 0:03:50.360 accurately reflect what's going on in the US economy. How 0:03:50.360 --> 0:03:51.640 do you see it? Because I feel like, Mike, you're 0:03:51.680 --> 0:03:54.240 so good at kind of pulling in yes, government statistics, 0:03:54.280 --> 0:03:57.400 real words, real world statistics. I don't know, how do 0:03:57.440 --> 0:03:57.760 you see it? 0:03:58.120 --> 0:04:02.400 They actually had this debate on the podcast with Tracy 0:04:02.560 --> 0:04:06.680 Alloway and Joe Eisenthal today, and the experts they were 0:04:06.680 --> 0:04:09.000 talking to basically came down I think about where I 0:04:09.000 --> 0:04:12.600 would come down, that there are so many different measures 0:04:13.000 --> 0:04:16.200 and even though there's a wedge between the PCE and CPI, 0:04:16.320 --> 0:04:20.200 it's about one hundred basis points now, it's normally somewhere 0:04:20.279 --> 0:04:23.560 between thirty five and fifty, so it's not very wide. 0:04:23.960 --> 0:04:28.120 And really we can't say, given all the different measures, 0:04:28.160 --> 0:04:33.039 exactly what inflation is. So the CPI has the most categories, 0:04:33.160 --> 0:04:38.480 it's the most up to date the PPI and the 0:04:38.520 --> 0:04:42.560 CPI feed into PCE, so PCE depends on CPI, So 0:04:42.640 --> 0:04:45.080 I guess I would go with the CPI. That doesn't 0:04:45.120 --> 0:04:48.600 mean I think that the three point nine percent is 0:04:49.640 --> 0:04:52.560 where we should be. There's a lot of talk of 0:04:52.600 --> 0:04:56.000 the FED maybe changing its inflation target to maybe three 0:04:56.040 --> 0:05:00.400 percent or something like that, but overall maybe this CPI, 0:05:01.120 --> 0:05:02.400 you know, that's just talk. 0:05:03.080 --> 0:05:04.720 The Fed has denied that they're going to do that 0:05:04.760 --> 0:05:06.120 many many times over the last year. 0:05:06.160 --> 0:05:08.120 Well, they're denying it now because if you do it 0:05:08.160 --> 0:05:10.440 now when you have you're moving the equation, you're moving 0:05:10.440 --> 0:05:11.039 the goalposts. 0:05:11.120 --> 0:05:11.240 Right. 0:05:11.680 --> 0:05:14.279 They do now have a procedure so that every five 0:05:14.360 --> 0:05:17.360 years they look at their monetary policy framework, and that's 0:05:17.400 --> 0:05:18.839 coming up in twenty twenty five. 0:05:18.960 --> 0:05:21.000 So do you think that given what we've had we've 0:05:21.040 --> 0:05:24.200 seen over the last eighteen months with the data MIC, 0:05:24.600 --> 0:05:27.800 that they would consider actually changing it when there is 0:05:27.839 --> 0:05:28.440 a time. 0:05:28.200 --> 0:05:28.640 To do that. 0:05:28.800 --> 0:05:32.799 I think they would. Two percent was never a number 0:05:32.800 --> 0:05:35.760 written in stone. It was what the New Zealand Central 0:05:35.760 --> 0:05:39.080 Bank adopted number of years ago and it sort of 0:05:39.120 --> 0:05:42.000 became a de facto standard. And the idea was basically, 0:05:42.040 --> 0:05:45.760 what's not too high and not too low because if 0:05:45.800 --> 0:05:49.159 you're too low number you have no way to lower 0:05:49.279 --> 0:05:54.039 rates if you're at zero, and if you're too high 0:05:54.080 --> 0:05:56.640 then people get mad because you have inflation. So they 0:05:56.680 --> 0:06:00.040 picked two percent. They could easily pick three percent, and 0:06:00.320 --> 0:06:02.360 people have been urging that on them for years, so 0:06:02.400 --> 0:06:04.520 it's something I'm sure they'll talk about, all right. 0:06:04.640 --> 0:06:07.200 So the data this week we all were kind of 0:06:07.320 --> 0:06:09.000 leading up, I feel like in a big way to 0:06:09.640 --> 0:06:13.719 this Thursday report of pc core and the read on 0:06:13.760 --> 0:06:16.880 inflation that the Fed follows the narrative if you put 0:06:16.920 --> 0:06:19.040 it all together, including some of the other data points 0:06:19.040 --> 0:06:22.680 that we got today, is there one clear narrative or 0:06:22.680 --> 0:06:23.839 a bit of a mixed narrative. 0:06:24.800 --> 0:06:27.360 It's a mostly clear narrative that the economy is doing well. 0:06:27.480 --> 0:06:30.080 Interesting number we haven't mentioned and didn't get a lot 0:06:30.080 --> 0:06:32.719 of attention today because of the PCEE was pending home 0:06:32.760 --> 0:06:36.200 sales really tanked in the last month, and that's maybe 0:06:36.240 --> 0:06:39.680 a sign that we're seeing the higher mortgage rates bite, 0:06:40.200 --> 0:06:44.560 which is despite Elizabeth Warren's desires, that's what the FED 0:06:44.640 --> 0:06:48.240 wants to see. So we seem to be doing and 0:06:48.279 --> 0:06:52.440 getting what the Fed is looking for. Next week, we'll 0:06:52.480 --> 0:06:56.760 see jobs, and if the job's numbers hold in, it'll 0:06:56.760 --> 0:06:58.800 tell you that the other side of their mandate is 0:06:59.160 --> 0:07:01.800 doing well, and that's the feeling that they will hold in. 0:07:02.240 --> 0:07:06.560 So at this point, you know, we get volatility. 0:07:06.640 --> 0:07:08.479 Powell was right saying, Hey, the economy's good. 0:07:09.040 --> 0:07:12.120 J Powell was reasonably right. I don't know if you 0:07:12.120 --> 0:07:14.840 saw the Wall Street Journal story today about whether Chris 0:07:14.880 --> 0:07:18.960 Waller or Larry Summers was right, and Nick Timmers from 0:07:19.000 --> 0:07:21.400 the Wall Street Journal comes down on Chris Waller's side 0:07:21.600 --> 0:07:24.400 that we didn't have to have six percent unemployment. 0:07:25.320 --> 0:07:27.560 So it's interesting to hear that we did speak to 0:07:27.560 --> 0:07:30.280 someone yesterday who said that we've already had a soft landing. 0:07:30.400 --> 0:07:33.160 Chris Allman over at CalPERS A cal stars. Excuse me? 0:07:34.360 --> 0:07:35.960 Are we going to start seeing more of that? 0:07:36.200 --> 0:07:36.400 Mike? 0:07:36.560 --> 0:07:39.240 Are people going to finally say, okay, we can declare 0:07:39.480 --> 0:07:41.560 that this landing has happened and has indeed been a 0:07:41.600 --> 0:07:42.080 soft one. 0:07:43.080 --> 0:07:45.760 Yeah, it's kind of a at what point do you 0:07:45.800 --> 0:07:48.920 consider the economy landed? There have been people who say 0:07:48.920 --> 0:07:52.000 we've been on the runway for a while, and others say, well, 0:07:52.040 --> 0:07:55.320 you know, it's never quite there. So it'll be a 0:07:55.320 --> 0:07:58.280 couple of months probably when the Fed starts cutting rates. 0:07:58.360 --> 0:08:01.200 If we get to that point. That would suggest that 0:08:01.200 --> 0:08:06.800 we're still making a lot of progress towards sustainable low inflation, 0:08:07.000 --> 0:08:09.679 and you could call that a soft landing. Other people 0:08:09.720 --> 0:08:11.920 will look back in history and say, well, this has 0:08:11.920 --> 0:08:14.320 been a soft landing. If it's done a pretty good 0:08:14.400 --> 0:08:16.320 heals like it. They'll never say it. 0:08:16.920 --> 0:08:18.000 Goldilock says, it's. 0:08:18.080 --> 0:08:23.200 Yeah, it's like jinxing yourself. But they'll they will feel it. 0:08:23.240 --> 0:08:23.520 All right. 0:08:23.560 --> 0:08:25.320 We're going to say thanks to Michael McKey Bloomberg News 0:08:25.320 --> 0:08:27.000 International Economics and Policy Cours. 0:08:27.040 --> 0:08:31.280 But you're listening to the Bloomberg Business Week podcast. Catch 0:08:31.320 --> 0:08:34.320 us live weekday afternoons from two to five pm Eastern. 0:08:34.480 --> 0:08:36.880 Listen on Apple car Play and then brout Auto with 0:08:36.920 --> 0:08:41.160 a Bloomberg Business app, or watch us live on YouTube. 0:08:42.880 --> 0:08:46.200 Got to talk a little b about WW International shares dropping, 0:08:46.280 --> 0:08:49.000 falling earnings last night and news at Oprah Winfrey said 0:08:49.000 --> 0:08:51.400 she's preparing to leave its board. We've been talking about 0:08:51.400 --> 0:08:54.160 it all day here at Bloomberg. Stock down nearly twenty 0:08:54.200 --> 0:08:56.480 seven percent of its low's today lowest points since they 0:08:56.480 --> 0:08:59.200 began trading back in one two thousand and one. And 0:08:59.240 --> 0:09:01.760 you might recall that back in twenty fifteen that's when 0:09:01.840 --> 0:09:04.960 Oprah signed on bought a ten percent stake in the company. 0:09:05.360 --> 0:09:07.720 That news and move revived the stock for a while, 0:09:07.760 --> 0:09:09.840 and the narrative tim around the company. 0:09:09.600 --> 0:09:12.720 Well, narrative changing again today and news of Oprah's departure 0:09:12.720 --> 0:09:15.520 delivering the latest blow to the obesity focused company that's 0:09:15.520 --> 0:09:18.880 struggling to stay relevant in the ozempic era. We got 0:09:18.920 --> 0:09:22.000 a great roundtable joining us to discuss the news in 0:09:22.040 --> 0:09:25.839 the environment that WW exists in Bloomberg News. Reporter Jerry 0:09:25.840 --> 0:09:28.000 Smith is with us right now in Bloomberger News health 0:09:28.000 --> 0:09:31.280 reporter Madison Mueller both here in the studio. Good to 0:09:31.280 --> 0:09:33.040 have you both with us. Hey, Jerry, I want to 0:09:33.080 --> 0:09:35.480 start with you because we did see the stock WW 0:09:35.559 --> 0:09:38.800 stock drop last night following quarterly results and the news 0:09:38.800 --> 0:09:42.480 that Oprah was leaving the board. What's bigger here is 0:09:43.160 --> 0:09:45.720 the results or is it Oprah no longer being on 0:09:45.760 --> 0:09:46.600 the board Here. 0:09:47.080 --> 0:09:49.840 I mean, I think Oprah deciding that she's not going 0:09:49.920 --> 0:09:52.040 to run for reelection on the board is a big deal. 0:09:52.200 --> 0:09:56.560 I can't think of many celebrity brand relationships that are 0:09:56.600 --> 0:10:01.160 more iconic than her relationship with WA Watchers. So for 0:10:01.200 --> 0:10:02.679 her to no longer be on the board. I think 0:10:02.720 --> 0:10:05.959 investors saw that as you know, potential concern. 0:10:06.160 --> 0:10:07.599 To be fair, and we're going to bring up the 0:10:07.679 --> 0:10:09.760 chart again for everybody. We just showed it. I mean 0:10:10.200 --> 0:10:12.400 the chart of WW shares what they have done since 0:10:12.440 --> 0:10:14.559 Oprah came on board, and you could see that uptick 0:10:14.600 --> 0:10:18.080 that was shortly after she came on board, hitting a high, 0:10:18.120 --> 0:10:21.160 and then it's just been kind of a tougher slog 0:10:21.240 --> 0:10:24.880 if you will, since then. Madison Kman in on here. 0:10:24.960 --> 0:10:27.280 You know, we've talked with you two about WW. I mean, 0:10:27.720 --> 0:10:31.200 you know, they've got a new strategy moving forward right right. 0:10:31.240 --> 0:10:33.640 And I think that this is sort of in a 0:10:33.720 --> 0:10:37.880 time when they are trying to make their brand appear 0:10:37.920 --> 0:10:41.600 to be relevant still and really get people, you know, 0:10:42.280 --> 0:10:45.000 signed onto the idea that Weight Watchers is still needed, 0:10:45.720 --> 0:10:48.800 that it's relevant. Like Oprah leaving at this time is 0:10:48.840 --> 0:10:51.160 just not a good It's not good for the image 0:10:51.160 --> 0:10:53.120 when they're already struggling with their image. It's sort of 0:10:53.120 --> 0:10:54.720 a dumb away, I mean, kind of crazy. 0:10:54.920 --> 0:10:58.120 She's doing exactly right, Jerry, with what the company's trying 0:10:58.160 --> 0:11:00.280 to do. They're saying, we're going to embrace these new 0:11:00.360 --> 0:11:02.840 weight loss drugs. That's what she has done too. 0:11:03.360 --> 0:11:06.120 Yeah, I mean, I think the company itself, it's been fascinating, 0:11:06.280 --> 0:11:10.080 how you know, It's a fundamental shift in how we 0:11:10.120 --> 0:11:12.280 think about weight loss. And this was a company that 0:11:12.679 --> 0:11:15.760 really emphasized for years you could lose weight if you 0:11:15.840 --> 0:11:18.760 just eat right and you have enough real power. Yeah, 0:11:19.000 --> 0:11:22.120 and now I mean their arrival of a zepic and 0:11:22.160 --> 0:11:25.000 all these weight loss drugs has really forced this company 0:11:25.040 --> 0:11:25.880 to recalculate. 0:11:26.120 --> 0:11:27.880 But it doesn't. It just makes me like, I'm trying 0:11:27.920 --> 0:11:29.679 to understand that this is what Oprah's doing. So you 0:11:29.720 --> 0:11:31.880 would think it would almost make more sense for her 0:11:31.920 --> 0:11:34.560 to stay because she's used these drugs, gets what the 0:11:34.559 --> 0:11:36.440 company is doing in kind of this latest brand ship. 0:11:36.559 --> 0:11:40.320 Perhaps that's why investors are concerned if she's not sticking 0:11:40.360 --> 0:11:42.920 with it. Maybe there's a difference in strategy or something 0:11:42.920 --> 0:11:44.680 that you know, remains to be seen at this point, 0:11:44.679 --> 0:11:46.760 not saying that's happening, but yeah, you know, and that 0:11:46.800 --> 0:11:48.480 could be one of the reasons why the stock is 0:11:48.480 --> 0:11:50.679 reacting that way. So Madison, talk a little bit about 0:11:50.760 --> 0:11:53.439 the shift that we're seeing at WW right now, because, 0:11:53.520 --> 0:11:57.320 as Carol mentioned, this is a company known for counting 0:11:58.320 --> 0:12:01.679 well counting points. I should say that the meetings, the 0:12:01.679 --> 0:12:05.200 in person stuff, the line of food. How have the 0:12:05.480 --> 0:12:07.360 GLP ones disrupted that? 0:12:07.760 --> 0:12:07.960 Yeah? 0:12:08.000 --> 0:12:11.200 So I mean weight Watchers acquired Sequence, which is a 0:12:11.240 --> 0:12:13.960 telehealth provider, last year, and so what they're trying to 0:12:13.960 --> 0:12:17.200 do is bring this old or you know, the historic 0:12:17.240 --> 0:12:20.560 weight Watchers brand to GLP one prescribing and sort of 0:12:20.559 --> 0:12:23.120 combine them and say, you know, you're still going to 0:12:23.160 --> 0:12:26.679 have this community. You're still going to get support, behavioral support, 0:12:26.960 --> 0:12:31.320 you know, medication management things like that, and have that 0:12:31.400 --> 0:12:33.960 sort of along with the drug and you know, have 0:12:34.000 --> 0:12:37.079 a provider who can help you manage the medications and everything. 0:12:37.360 --> 0:12:40.240 And so that's sort of been their rebrand, and I 0:12:40.240 --> 0:12:43.200 guess I mean it sort of shows like Oprah is 0:12:44.160 --> 0:12:46.480 she said that she's taking one of these drugs now 0:12:46.559 --> 0:12:49.880 and so she, I mean, her departure from weight Watchers 0:12:49.960 --> 0:12:52.839 sort of like proves again that she herself baby doesn't 0:12:52.880 --> 0:12:54.720 need those services. I don't know if she said, like 0:12:55.040 --> 0:12:57.800 whether or not she's actually using their product, but a 0:12:57.840 --> 0:13:01.280 lot of the page that I've spoken to that are 0:13:01.320 --> 0:13:05.000 taking GLP on drugs are like, we don't feel like 0:13:05.040 --> 0:13:08.079 we would need something like this. We have that community 0:13:08.160 --> 0:13:10.880 sort of on social media. We have doctors that can 0:13:10.920 --> 0:13:14.640 help us manage the side effects or help us manage, 0:13:14.640 --> 0:13:17.839 you know, the medications in general, so we don't really 0:13:17.880 --> 0:13:21.280 see the need for something like what Weight Watchers is offering, 0:13:21.320 --> 0:13:25.240 which is this sort of behavioral support program in tandem 0:13:25.280 --> 0:13:27.040 with prescribing GLP one drugs. 0:13:27.040 --> 0:13:28.880 I mean, it's a great question, Jerry. You do wonder like, 0:13:28.920 --> 0:13:32.120 what does ww become going forward when the community aspect 0:13:32.160 --> 0:13:35.240 of this and the platform to support you in your 0:13:35.679 --> 0:13:40.600 goal of losing weight, if that goes away? Are they 0:13:40.720 --> 0:13:43.840 just a distributor of drugs basically, right, of these weight 0:13:43.840 --> 0:13:45.760 loss drugs, Like what do they become? 0:13:46.280 --> 0:13:48.280 Yeah, I mean I think that's that's the big question 0:13:48.400 --> 0:13:51.360 is how does this company stay relevant right now? You know, 0:13:51.400 --> 0:13:55.520 I mean there's analysts who think this market for OBC 0:13:55.679 --> 0:13:59.000 drugs is going to be huge, and but you know not, 0:13:59.320 --> 0:14:02.120 They're not for every bud. And you know, there's people 0:14:02.200 --> 0:14:04.120 you take these drugs, but you have to keep taking 0:14:04.160 --> 0:14:07.160 them over and over, and maybe there's a role for 0:14:07.360 --> 0:14:10.200 Weight Watchers in the future and just supporting these people 0:14:10.200 --> 0:14:12.840 who you know, maybe they don't want to take it 0:14:12.880 --> 0:14:16.000 for their entire life. But yeah, I mean, that's something 0:14:16.000 --> 0:14:17.760 this company is really struggling to figure out. 0:14:18.320 --> 0:14:20.680 To Jerry's point, Madison, do you think that it's fair 0:14:20.720 --> 0:14:23.760 to say some critics could argue that investors are kind 0:14:23.760 --> 0:14:25.760 of putting the cart before the horse here because we 0:14:25.840 --> 0:14:28.000 don't know. Carroll, When I say we don't know, you 0:14:28.040 --> 0:14:30.000 always point out that these drugs have been around for 0:14:30.160 --> 0:14:31.800 other uses for quite a bit of time. 0:14:31.960 --> 0:14:33.840 Diabetics have been using right to be fair, but. 0:14:33.840 --> 0:14:36.800 We don't necessarily know when they're yearsed purely for weight loss, 0:14:37.520 --> 0:14:41.000 not long term effects, but sort of long term trends. 0:14:41.040 --> 0:14:44.640 What needs to be done other support systems that people need, right. 0:14:44.680 --> 0:14:46.520 I mean, that's very true. It's a good point that 0:14:46.600 --> 0:14:49.640 Jerry brought up, because there's a lot of issues with 0:14:50.240 --> 0:14:53.000 like long term durability with these drugs right now. One, 0:14:53.040 --> 0:14:56.840 because they're very expensive, not all insurance companies cover them, 0:14:56.880 --> 0:14:59.360 so some people can't afford them, and then they're forced 0:14:59.360 --> 0:15:02.239 to go off of the drugs. There's still really widespread 0:15:02.320 --> 0:15:05.120 supply shortages, which a lot of the doctors I've spoken 0:15:05.160 --> 0:15:07.960 to have said that that continues to be an issue. 0:15:08.000 --> 0:15:11.360 It's not something that has really gotten any better, and 0:15:11.440 --> 0:15:13.920 so they're having to take patients off of the drugs 0:15:13.920 --> 0:15:16.280 and then you know, these are drugs that are meant 0:15:16.280 --> 0:15:18.440 to be taken forever, so what happens after that? So 0:15:18.560 --> 0:15:22.040 like there could still be a place for weight watchers. 0:15:22.480 --> 0:15:25.320 Maybe there maybe that's their sweet spot. But there are 0:15:25.760 --> 0:15:28.920 so many telehealth companies that are cropping up now to 0:15:29.800 --> 0:15:33.840 one prescribe weight loss drugs to help with you know 0:15:34.000 --> 0:15:36.400 what happens after you go off of weight loss drugs, 0:15:36.920 --> 0:15:40.160 offering different types of nutrition therapy, things like that. Like, 0:15:40.200 --> 0:15:43.640 this industry has just gotten more competitive, so they're just 0:15:43.680 --> 0:15:46.200 going to have more people to face off with. 0:15:46.360 --> 0:15:48.080 Well and Jerry, maybe that played out in terms of 0:15:48.080 --> 0:15:51.360 the twenty twenty twenty twenty four revenue forecasts, right, because 0:15:51.360 --> 0:15:53.440 that was a disappointment from WW. 0:15:53.920 --> 0:15:57.400 Yeah, they are twenty twenty four forecast for sales came 0:15:57.440 --> 0:16:00.160 in lower than what Wall Street was expecting. So I 0:16:00.160 --> 0:16:02.800 think it was probably a combination of Oprah's decision to 0:16:02.880 --> 0:16:06.760 leave the board and the lighter revenue forecast that investors 0:16:07.160 --> 0:16:11.160 were concerned about. I just think big picture this is 0:16:11.560 --> 0:16:15.160 it's very hard to be in this business on Wall 0:16:15.200 --> 0:16:18.240 Street where we're seeing these companies. Just the other day 0:16:18.280 --> 0:16:21.240 at Biotech company said that you know, they had good 0:16:21.320 --> 0:16:23.480 data on an OBC drug in their stock at don't. 0:16:23.480 --> 0:16:24.400 That's Viking Therapeutic. 0:16:24.440 --> 0:16:24.640 Yeah. 0:16:24.680 --> 0:16:27.320 Right, So it's just like you, we're seeing these enormous 0:16:27.360 --> 0:16:30.560 swings in share prices based on you know, are you 0:16:31.000 --> 0:16:32.960 going to be relevant in the weight loss drug era? 0:16:33.040 --> 0:16:34.800 Are you not going to be relevant? So I think 0:16:34.840 --> 0:16:37.520 it's tough for weight watchers when you know, an announcement 0:16:37.520 --> 0:16:39.480 where Oprah puts out a press release saying she's not 0:16:39.520 --> 0:16:43.120 gonna join, you know, be on the board, and then 0:16:43.160 --> 0:16:44.920 the stock just gets you know, hammered. 0:16:45.120 --> 0:16:47.240 Madison go to Viking though, because and I'm glad you 0:16:47.240 --> 0:16:49.440 brought that up, because it does feel like every week 0:16:49.520 --> 0:16:51.760 or something, we're looking at a different company. What do 0:16:51.800 --> 0:16:54.080 we know about that company and kind of their potential 0:16:54.200 --> 0:16:55.000 role in all of this? 0:16:55.320 --> 0:16:56.920 Yeah, I mean we were looking at that company the 0:16:56.960 --> 0:16:59.400 other day. I think there's something like thirty seven employees. 0:16:59.440 --> 0:17:02.960 It's really small, and this is phase two data that 0:17:03.000 --> 0:17:04.680 we're talking about, so it still is a long way 0:17:04.720 --> 0:17:07.040 before it actually gets to there are a b CD drug. 0:17:07.240 --> 0:17:10.320 Yes, yes, But Madison, does it raise the question that 0:17:10.359 --> 0:17:13.119 the moat that a company like Eli Lilly and that 0:17:13.280 --> 0:17:16.320 Novo nord Disc would have is not as deep of 0:17:16.359 --> 0:17:19.240 a moat, given that there is progress being made by 0:17:19.240 --> 0:17:20.040 these other companies. 0:17:20.200 --> 0:17:22.840 Yeah, I mean there's progress being made by these other companies, 0:17:22.840 --> 0:17:26.440 and those are sort of making them a possible acquisition 0:17:26.520 --> 0:17:30.080 target for drug makers that don't have a presence in 0:17:30.160 --> 0:17:33.120 weight loss yet Eli, Lilly and Novo Nordisk. I mean, 0:17:33.280 --> 0:17:36.760 from the conversations I've had with them, like their pipelines 0:17:36.880 --> 0:17:40.120 run very deep, and they are looking at every single thing, 0:17:40.200 --> 0:17:43.320 like they have really early stage you know, discovery programs, 0:17:43.320 --> 0:17:46.320 and they're looking at every single thing that these other companies, 0:17:46.359 --> 0:17:48.680 or they say they are that these other smaller biotech 0:17:48.720 --> 0:17:53.040 companies are looking at. But companies like Merk, like Bristol 0:17:53.080 --> 0:17:56.800 Myers Pfizer, who sort of need to get into this 0:17:57.480 --> 0:18:01.679 giant market still they could, you know, buy one of 0:18:01.680 --> 0:18:02.480 these smaller companies. 0:18:02.600 --> 0:18:04.440 Biking, by the way, now an eight point six billion 0:18:04.480 --> 0:18:06.520 dollar market company, but on Tuesday was up like one 0:18:06.560 --> 0:18:09.280 hundred and twenty one percent on this news. Well, last thought, 0:18:09.359 --> 0:18:12.040 Jerry uh Oprah still is going to kind of be 0:18:12.080 --> 0:18:13.760 involved though with the company. She's gonna help them, I 0:18:13.760 --> 0:18:15.639 guess with the conference and stuff. So she's kind of 0:18:15.680 --> 0:18:16.320 still around. 0:18:16.880 --> 0:18:19.440 Yeah, she said that she's still gonna, you know, continue 0:18:19.480 --> 0:18:24.000 to collaborate with weight watchers, you know, and address issues 0:18:24.040 --> 0:18:28.040 like the stigma of obesity. I mean, as we were talking, 0:18:28.080 --> 0:18:30.159 I was just thinking like how interesting it would be 0:18:30.240 --> 0:18:33.560 if Oprah you know, got involved with like Eli Lilly 0:18:33.640 --> 0:18:36.680 or Novo. I would think those two companies are probably 0:18:36.800 --> 0:18:39.359 reaching out to her people. I mean it's you know, 0:18:39.480 --> 0:18:41.040 that would be a very interesting development. 0:18:41.080 --> 0:18:43.080 And you know what, they have lots of money. 0:18:44.200 --> 0:18:44.760 That's true. 0:18:44.960 --> 0:18:45.600 It's a good point. 0:18:45.920 --> 0:18:49.000 That's actually a really interesting point. Great stuff, and this 0:18:49.080 --> 0:18:51.200 is certainly something that's very topical again for a second 0:18:51.280 --> 0:18:54.200 year in terms of uh, these weight loss drugs. Guys, 0:18:54.200 --> 0:18:56.120 Thank you so much, really appreciated. Jerry Smith for porter 0:18:56.160 --> 0:18:58.840 of Bloomberg News here in studio with us along with 0:18:58.840 --> 0:19:01.280 Madison Muller, whose health report at Bloomberg News but shairs 0:19:01.320 --> 0:19:04.080 of WW really taking tim in today's session. 0:19:06.040 --> 0:19:09.920 You're listening to the Bloomberg Business Week podcast. Listen live 0:19:10.000 --> 0:19:12.920 each weekday starting at two pm Eastern on Apple car 0:19:12.920 --> 0:19:15.879 Play and Android Auto with the Bloomberg Business ad. You 0:19:15.920 --> 0:19:19.200 can also listen live on Amazon Alexa from our flagship 0:19:19.240 --> 0:19:23.080 New York station. Just say Alexa playing Bloomberg eleven thirty. 0:19:24.520 --> 0:19:27.200 Okay, Carol, we've talked about this before. Just how much 0:19:27.280 --> 0:19:29.520 value did Taylor Swift bring to the NFL and to 0:19:29.560 --> 0:19:32.560