Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is Bloomberg business Week inside from the reporters and
Speaker 2: editors who bring you America's most trusted business magazine, plus
Speaker 2: global business, finance and tech news. The Bloomberg Business Week
Speaker 2: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 3: Last week, you know, the House of Representatives here in
Speaker 3: the United States passing a bipartisan bill that would effectively
Speaker 3: ban TikTok from the US unless it's Chinese parent company, ByteDance,
Speaker 3: divests the app. The measure now moves to the Senate.
Speaker 3: President Biden, who has previously blocked TikTok excuse me from
Speaker 3: government devices and titaned restrictions on data sharing, says he
Speaker 3: will sign it if it ultimately passes.
Speaker 4: Okay, yet, Carol, A TikTok you know ban may not
Speaker 4: be enough, so notes a story featured in the new
Speaker 4: issue of BusinessWeek magazine, which is available on newstands, on
Speaker 4: the Bloomberg Terminal and at Bloomberg Slash BusinessWeek. This story
Speaker 4: by Anna Edgerton, Bloomberg News Seattle Bureau chief and Alex Brinka,
Speaker 4: Bloomberg News Technology reporter. Ana joining us from Seattle, Alex
Speaker 4: from our Los Angeles Bureau, and I do want to
Speaker 4: start with you and just take a step back here
Speaker 4: before we get going on the intricacies of privacy and
Speaker 4: what these privacy advogets are saying. Just give us the
Speaker 4: latest on a potential TikTok ban or divestment. What is
Speaker 4: the most recent news.
Speaker 5: Yeah, So what we did with the story was we
Speaker 5: wanted to look at where the opposition is unified. The
Speaker 5: opposition to this bill is unified. So this bill passed
Speaker 5: overwhelmingly in the House. There's a lot of bipartisan support
Speaker 5: for it, but about I think it was sixty two
Speaker 5: members from both Republicans and Democrats voted against it, and
Speaker 5: almost all.
Speaker 6: Of them said.
Speaker 5: The way to safeguard US user data is not by
Speaker 5: banning one company or even forcing its parent company to sell.
Speaker 5: The way to protect US user data is to pass
Speaker 5: a federal data privacy standard that applies to all companies.
Speaker 5: So China can still have access to that's my dog
Speaker 5: can still have access to UH to US user data,
Speaker 5: buying it from data brokers.
Speaker 6: You know that's got it, that got it from from Facebook.
Speaker 5: So there are other ways for Chinese authorities to get
Speaker 5: this information that's not TikTok, and so just banning this
Speaker 5: one company is not going to solve the problem. And
Speaker 5: that's where we see, you know, a lot of the
Speaker 5: opposition in the House and also some of that's starting
Speaker 5: to bubble up in the Senate. And that's where this
Speaker 5: is really going to be important, is to see how
Speaker 5: senators line up either in support of this measure or
Speaker 5: wanting to take a different approach.
Speaker 3: And don't tell me, Anna, but your dog is a
Speaker 3: TikTok store star, but we'll we'll maybe talk about that later.
Speaker 7: Has the potential, that's the potential, don't we all.
Speaker 3: Alex come on in on this. You understand the tech community.
Speaker 3: You're out there on the West coast, but you've been
Speaker 3: reporting on the sector for a long time. Is there
Speaker 3: rumblings that they're nervous and concerned that there could be
Speaker 3: more regulatory oversight or they're like, yeah, we've heard this before.
Speaker 3: Because it is kind of staggering right that there is
Speaker 3: a lot of freedom still in the social media space
Speaker 3: when it comes to oversight.
Speaker 7: We have certainly heard concerns about that privacy before. We
Speaker 7: have certainly seen transgressions by the likes of Meta when
Speaker 7: it was called Facebook by other companies. The CEOs have
Speaker 7: been trotted down to DC to have these conversations. What
Speaker 7: we haven't seen is any kind of legislation that over
Speaker 7: arches the entire industry in the same way that this
Speaker 7: TikTok bill does for the byte danced own social media app. Now. Look,
Speaker 7: a lot of the executives from TikTok's rivals have largely
Speaker 7: said we would love to see federal privacy regulation because
Speaker 7: currently there's a patchwork of laws in different states, So
Speaker 7: give us the rules and we'll follow them. That being said, Carol,
Speaker 7: we've also seen them fight every bill and legislation and
Speaker 7: different legal venues. That wouldn't necessarily be an easy path.
Speaker 7: So while we did have reporting of Meta in the
Speaker 7: past kind of lobbying against TikTok in past years, we
Speaker 7: haven't heard a lot of that just yet. That doesn't
Speaker 7: mean it's not happening, but certainly the companies like Meta
Speaker 7: or Alphabet's YouTube would stand to benefit if TikTok, word
Speaker 7: it Snap disappear because of this legislation.
Speaker 5: Alex is absolutely right, But I think there is also
Speaker 5: concern from these companies that what the US does in
Speaker 5: forcing by Dance to sell TikTok could set a really
Speaker 5: bad precedent for you know, the operations of Meta abroad.
Speaker 5: So I think while they would not mind TikTok or disappearing,
Speaker 5: there is a lot of concern about the government forcing
Speaker 5: that to happen.
Speaker 4: Well, I want to I want to Anna for you
Speaker 4: to for a moment talk a little bit about what
Speaker 4: these privacy advocates would actually like to see here, because yes,
Speaker 4: these companies say they you know, quote unquote want regulation,
Speaker 4: but we've seen, as Alex mentioned, what they've done in
Speaker 4: the past. When the bills are up, what do these
Speaker 4: companies or what do these critics say the regulation should
Speaker 4: exist for these companies, like, what would that look like?
Speaker 5: So the best example to look at is a bill
Speaker 5: that was passed by the House Energy and Commerce Committee
Speaker 5: last years. I think the ADPPA, the American Data Privacy
Speaker 5: Protection Addicts and that has kind of the like agreed
Speaker 5: upon tenants of data privacy. Now, a lot of these
Speaker 5: are similar to the GDPR in Europe. They're similar to
Speaker 5: the standards that some of the states have set. But
Speaker 5: the most important thing for tech companies is that it
Speaker 5: preempts all of the all of the state standards, so
Speaker 5: that way they would have one standard that they would
Speaker 5: have to comply with in the US. There's also a
Speaker 5: question about how it would be enforced, whether it be
Speaker 5: up to the Attorney General, or whether there would be
Speaker 5: a private right of action where individuals could sue these
Speaker 5: tech companies. But the most important elements are being able
Speaker 5: having the option to delete your data, having the option
Speaker 5: to withdraw consent for being collected, knowing to whom it's
Speaker 5: being sold. So a lot of this is about giving
Speaker 5: users in the US more control over what happens their
Speaker 5: data in just the normal kind of interactions of existing
Speaker 5: online as so much of ours.
Speaker 3: This is where we've got to jump in. And I'm
Speaker 3: curious because we are certainly hearing the drum beat for
Speaker 3: that for individuals like you me Tim, for us to
Speaker 3: have more control on our data. Having said that, I'm
Speaker 3: looking at this nineteen sixty five US Supreme Court case
Speaker 3: that unanimously struck down rules for the US Post Office
Speaker 3: to restrict the spread of communist propaganda from the Chinese
Speaker 3: Communist Party. So, I mean, I know there's national security
Speaker 3: concerns about TikTok, but there's also concerns about all of
Speaker 3: our data and how it's being used Alex. If that
Speaker 3: didn't happen, what hope is there for lawmakers to come
Speaker 3: together and say it's time to really rain in these
Speaker 3: social media companies. We've already seen the implications politically and
Speaker 3: on individuals, the negative implications. That's not critics saying it,
Speaker 3: it's just a reality. So how likely is it that
Speaker 3: something really comes down hard regulatory on the social media universe.
Speaker 7: What I'm hearing from experts, particularly in the privacy space,
Speaker 7: is they are looking at this moment and saying, look,
Speaker 7: there's a lot of energy. People are really energized behind
Speaker 7: the idea of raining and TikTok. Maybe we can expand
Speaker 7: the scope as to whether or not that would happen. Look,
Speaker 7: this is this TikTok bill has kind of gone the
Speaker 7: furthest that any of these bills have ever gone in
Speaker 7: getting and passing a vote in one of the chambers.
Speaker 7: So in terms of actual federal privacy regulation, this moment
Speaker 7: seems to be one. That is why we see the
Speaker 7: opposition to this bill potentially circling around this idea because
Speaker 7: there's a lot of energy here. But we've had I
Speaker 7: was in the room for hearings about child safety and
Speaker 7: child data privacy. I was in the room for hearings
Speaker 7: with TikTok CEO where they were talking about kind of
Speaker 7: broader data privacy issues. And we've also had some legislation
Speaker 7: that's been introduced around data brokers, those third parties who
Speaker 7: vacuum up information on the Internet and sell it for
Speaker 7: a price to kind of whoever would want it for
Speaker 7: an adversary or otherwise. So we've heard about this. The
Speaker 7: social media era is almost what a decade old, and
Speaker 7: this is kind of the furthest legislation we've seen, So
Speaker 7: I'd be hard pressed to put a percentage on it yet, Carol, Yeah,
Speaker 7: but will certainly be keeping an air to the Senate
Speaker 7: to see what happens.
Speaker 3: Well, you both have great perspectives on this. You both
Speaker 3: are now on the West coast. But and I used
Speaker 3: to be certainly covering DC and understood politics in a big,
Speaker 3: big way. I mean, I do wonder, as we all
Speaker 3: watched TikTok last week, how much of it was politics
Speaker 3: versus real kind of needs and want to change policy.
Speaker 3: So politics versus policy, how do you kind of game
Speaker 3: it out?
Speaker 8: Anna?
Speaker 6: Yeah, there's a lot of that going on.
Speaker 5: I mean when this first kind of appeared to come
Speaker 5: out of nowhere, you know, Alex and I were following
Speaker 5: us really closely last year, and then it kind of
Speaker 5: got overtaken by AI, and I could it was really
Speaker 5: hard to find someone on the Hill who wanted to
Speaker 5: talk about TikTok, you know, summer.
Speaker 6: Of last year.
Speaker 5: When came back up, my first thought was, well, House
Speaker 5: Republicans want to make this awkward for Biden because he
Speaker 5: just started a TikTok.
Speaker 6: Account for his campaign.
Speaker 5: And I think that is part of it in you know,
Speaker 5: trying to create this hippocrisy for Biden and saying it's
Speaker 5: a national security threat, but.
Speaker 6: I'm going to use it to reach young voters. However,
Speaker 6: I think there.
Speaker 5: Are a lot of people in Capitol Hill who are
Speaker 5: genuinely concerned about Chinese ownership of this really powerful app.
Speaker 5: You know, this is not you know, while Facebook is
Speaker 5: perhaps the still still the biggest, you know, has the
Speaker 5: most users. You know, other apps have their kind of
Speaker 5: niche uses. There are one hundred and fifty one hundred
Speaker 5: and seventy million Americans that spend hours on TikTok every
Speaker 5: day and have a very kind of emotional connection to
Speaker 5: the app, and you know, Alex can talk more about that.
Speaker 5: But the concern you know here over and over again
Speaker 5: about national security is that the Chinese Communist Party can
Speaker 5: get access to US users data and also like kind
Speaker 5: of aggregate level of like patterns of USB behavior, and
Speaker 5: also that they could put a.
Speaker 6: Thumb on the algorithm to show not necessarily a.
Speaker 5: Communist propaganda, but harmful content to US users.
Speaker 3: Hey guys, we're gonna have to run. We know this
Speaker 3: conversation that will continue again in the future. Anna Edgerton
Speaker 3: and Alex Barinka, both of Bloomberg News, joining us with
Speaker 3: what's next maybe for social media.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: Live weekday afternoons from two to five pm Eastern Listen
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Speaker 3: We did also get some economic news this morning, new
Speaker 3: US home construction bouncing back sharply last month from weather
Speaker 3: related weakness at the start of the year. This is
Speaker 3: builders benefit from slightly more favorable mortgage rates and a
Speaker 3: dearth of existing houses for sale.
Speaker 4: Team Yeah, building permits a proxy for future construction made
Speaker 4: it rise to a rate that's the fastest since August.
Speaker 4: Both permits and starts figures for January were also revised higher.
Speaker 4: And yet for investors, the focus is all about tomorrow's
Speaker 4: FOMC meeting, which of course kicked off this morning.
Speaker 3: All right, everybody with a preview what to watch out for?
Speaker 3: Back with us as doctor Steve Skanky, chief economic advisor
Speaker 3: of a keel Point. He's a former US Treasury in
Speaker 3: White House National Security Council staff member. And then right
Speaker 3: here in studio we've got Bloomberg Economics US economist Stuart Paul.
Speaker 3: Steve is in Palm Beach, Florida. Stuart, as I said,
Speaker 3: right here in studio, Stuart, I want to start with
Speaker 3: you first up, remind us of what the data backdrop
Speaker 3: is that FED chair and the FOMC members will be
Speaker 3: reviewing today and tomorrow ahead of that decision.
Speaker 9: The thing that's going to be most pressing and that's
Speaker 9: going to be most front of mind for them, is
Speaker 9: just a hot inflation prints that we've seen so far
Speaker 9: this year. That's of course Number one. Other side of
Speaker 9: their mandate is focusing unemployment, and again we've seen hot
Speaker 9: We've seen hot non farm payroll print so far to
Speaker 9: start the year, the household survey has been a little
Speaker 9: bit weaker. We've seen it not taken the unemployment rate.
Speaker 9: But if we're seeing the pace of hiring that we've
Speaker 9: seen over two one hundred thousand jobs a month to
Speaker 9: start the year, plus hot and hot inflation, they're going
Speaker 9: to feel comfortable keeping their foot on the breaks, messaging
Speaker 9: relatively hawkishly perhaps in the state.
Speaker 4: That's right, okay, Stuart, So what does it all mean
Speaker 4: for the summary of economic projections the dot plot? What
Speaker 4: are you and the folks over at Bloomberg Economics thinking
Speaker 4: in terms of a median part the median rate that
Speaker 4: the Fed participants are expecting.
Speaker 9: We're still expecting to see them showing seventy five bases
Speaker 9: points of cuts this year, and that's really weighing the
Speaker 9: two things we've had. Hot inflation. So in their summary
Speaker 9: of the economic projections, we're going to expect to see
Speaker 9: an upward revision of their core inflation forecast for twenty
Speaker 9: twenty four up to maybe two and a half percent
Speaker 9: from two point four percent. Not huge, but taking into
Speaker 9: account the printed inflation that we've seen. And then we
Speaker 9: could also see a upward division of their unemployment forecast again,
Speaker 9: because we've seen the uptick already.
Speaker 3: And they're going to see two Percent's never going to happen. No,
Speaker 3: I'm just kidding. I'm just kidding. All right, Steve, come
Speaker 3: on in on this conversation. What are you expecting from
Speaker 3: the Fed and why?
Speaker 10: Well?
Speaker 8: I think, as Stuart says, they're they're not going to
Speaker 8: give any guidance one worthy the other about what they're
Speaker 8: going to do with interest rates. Jerome Powell was probably
Speaker 8: most forthcoming when he did is semi annual congressional testimony
Speaker 8: a couple of weeks ago, in which he said that
Speaker 8: you know, when they get the confidence, and he added,
Speaker 8: and we are not far from it, it'll be appropriate
Speaker 8: to dial back the level of restrictions so that we
Speaker 8: don't drive the economy into recession. So I think the
Speaker 8: real pivot point is at what point do they have
Speaker 8: what's the balance between believing that the economy is not
Speaker 8: close to tipping into recession and also that inflation is
Speaker 8: not taking back up. You know, when we when we
Speaker 8: look at the numbers, when when we were on at
Speaker 8: the end of January, the core personal consumption expenditures inflation
Speaker 8: metric was annualizing at one point nine percent, below their
Speaker 8: two percent target, and now after January it was up
Speaker 8: to two point four percent. And just based on a
Speaker 8: construction of what it would be like based on what
Speaker 8: we've seen with the CPI and PPI data, it'll probably
Speaker 8: be two point nine percent annualized over the last six months.
Speaker 8: And that doesn't give the Fed a justification to start
Speaker 8: cutting rates.
Speaker 4: See if you think that. Do you agree with Stewart
Speaker 4: and the team of Bloomberg Economics that the median FMC
Speaker 4: participant will still see seventy five bases points and cuts
Speaker 4: this year?
Speaker 8: I do. I do that that sort of has been
Speaker 8: where they've been, and when you hear what some of
Speaker 8: the Fed Fed Bank presidents have said, there is growing
Speaker 8: concern about the specter of recession and not sticking the
Speaker 8: soft landing. I grew Stewart that they are going to
Speaker 8: come in with MEETI and inflation at two point four
Speaker 8: or two point five percent. That's not a big difference.
Speaker 8: But I don't think that they're going to change the
Speaker 8: medium projection calling you know, four for three cuts sometime
Speaker 8: in twenty twenty four.
Speaker 3: So nothing's changed from the end of the last stop
Speaker 3: line is that what's happened Stewart. I mean, it's right,
Speaker 3: because that's what it was.
Speaker 8: Three.
Speaker 4: I think a lot of the data has changed.
Speaker 3: Well, has it, though?
Speaker 6: That's right?
Speaker 9: So it's interesting how it nets out, right, Because with
Speaker 9: inflation running as hot as it has so far to
Speaker 9: start the year, you would think so much has happened
Speaker 9: during the intermeting period. But if we look at some
Speaker 9: of our growth surprise indices, and we keep track of
Speaker 9: something like sixty eight sixty nine seventy different growth indices
Speaker 9: and economic activity indicies, about forty of them forty out
Speaker 9: of the sixty eight or so surprise to the downside. Right,
Speaker 9: So the FED is keeping track of everything on its
Speaker 9: own dashboard as well, right, And so yes, we've seen
Speaker 9: hot inflation, but we've also seen growth balancing the other side.
Speaker 4: I mean, how important. Not every one of the those
Speaker 4: economic indicators has created equal though. I mean sure inflation
Speaker 4: and the jobs numbers are those are pretty important ones start.
Speaker 9: That's right. Yeah, So absolutely within the Fed's balance of risk,
Speaker 9: the two things that are on either side of the
Speaker 9: seesaw are inflation and full employment. Now, yes, we've seen
Speaker 9: hot NFP on the other side of the seesaw, but
Speaker 9: we've also seen a weak household survey for the past
Speaker 9: two months.
Speaker 3: Steven Stewart, I want to get your both thoughts on this.
Speaker 3: The economic data points that's we're talking about that, I mean,
Speaker 3: are they showing that it's getting easier for the FED
Speaker 3: to navigate manage policy without tipping the US economy into
Speaker 3: recession or is it getting tricker trickier? And Stuart, let
Speaker 3: me start with you first, Like the data points giving
Speaker 3: the FED more runway to kind of manage things, making
Speaker 3: it easier for them in terms of not tipping the
Speaker 3: and then so not tipping the economy into recession.
Speaker 4: Or is it getting harder.
Speaker 9: I think that overall, I think is a data point
Speaker 9: to the FED having more of a runway, allowing the
Speaker 9: data all allow the FED to keep its front of
Speaker 9: the break for a little bit longer. Yeah, growth has
Speaker 9: been relatively resilient, despite the fact that a lot of
Speaker 9: the indicators underneath the surface have been surprising to the downside.
Speaker 9: Of course, the FED is trying to scape to where
Speaker 9: the puck is going. So we're going to expect the FED,
Speaker 9: and we all should be expecting the FED start cutting
Speaker 9: before it hits the two percent inflation targeting, before we
Speaker 9: were to drive off that cliff, so to speak.
Speaker 4: Hey, do you want to bring a headline to everyone's
Speaker 4: attention this crossing the Bloomberg terminal? Just moments ago? Supreme
Speaker 4: Court allows Texas deportation law in lass for President Biden.
Speaker 3: All right, well, keep an eye on that. Give you
Speaker 3: some more context on that in just a moment. Having
Speaker 3: said that, actually we're getting a little bit more context.
Speaker 2: So let's go through at the.
Speaker 3: US Supreme Court letting Texas to start arresting and deporting
Speaker 3: people who enter the country illegally. Refusing to block a
Speaker 3: new law that the Biden administration says will be an
Speaker 3: unprecedented intrusion on federal power to set immigration policy.
Speaker 4: Yeah, over three percents of the justices rejected the administration's
Speaker 4: request to keep the Texas law on hold while a
Speaker 4: illegal fight goes forward at a lower court, as is
Speaker 4: customary with emergency orders. The court as a whole gave
Speaker 4: no explanation, and I.
Speaker 3: Should put out the rebuff. Definitely a blow to President
Speaker 3: Biden's administration on an issue that is defined really up
Speaker 3: to this point. The twenty twenty four presidential election campaign.
Speaker 3: Let's go to Steve. Steve, let me put that question
Speaker 3: to you that Stewart has talked about. Do you think
Speaker 3: the economic points show that it's getting easier for the
Speaker 3: FED to navigate and manage policy without tipping the US
Speaker 3: economy ultimately into recession or is it getting trickier.
Speaker 8: I believe it's getting trickier, and I believe that the
Speaker 8: FED is becoming increasingly nervous about how sensitive things can be.
Speaker 8: You know, the thing about unemployment is well, none of
Speaker 8: these data are linear. When the unemployment rate starts going up,
Speaker 8: it tends to continue to move in that direction for
Speaker 8: a period of time. And the FED certainly doesn't want
Speaker 8: to see unemployment above four percent. And we're basically there
Speaker 8: now with the with the last data, as Stewart does
Speaker 8: point out, there there is increasing weakness in the economy,
Speaker 8: although some in the metrics still look pretty good. The
Speaker 8: other thing is the inflation data have just been peculiar.
Speaker 8: But you know, when we look at the January PC
Speaker 8: inflation core where we're owner equivalent rent, what was up
Speaker 8: way I aligned with what new leases have been. Portfolio
Speaker 8: management fees also contributed that, and then you look at February,
Speaker 8: and we see a huge vehicle. Right, we use vesical
Speaker 8: prices up, which is inconsistent with the associated data, and
Speaker 8: I think the FED is trying to figure that out,
Speaker 8: but I just think they're having a harder time, okay,
Speaker 8: to know which way to go.
Speaker 3: All Right, we got to leave it on that note,
Speaker 3: Doctor Steve Skanky, chief economic advisor of at keel Point
Speaker 3: Bloomberg Economics, US economist Stuart Paul. Right here in our studio, you're.
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Speaker 4: Well, the Biden administration is preparing to roll out the
Speaker 4: toughest ever limits on pollution from the nation's cars and
Speaker 4: light trucks, after making changes likely to mollify some automakers.
Speaker 3: All right, So, tim emission limits set to be finalized
Speaker 3: by the Environmental Protection Agency within days, would propel electric
Speaker 3: vehicle sales well beyond current levels. The EPA has projected
Speaker 3: that to meet proposed mandates, electric models would need to
Speaker 3: make up roughly two thirds of car and light truck
Speaker 3: sales and twenty thirteen folks. That's up from less than
Speaker 3: a tenth last year.
Speaker 4: All right, So that's the consumer side, Carol. On the
Speaker 4: consumer side, ev Reality is a MV infrastructure development platform company.
Speaker 4: Simply put evre real time. He puts built EV charging
Speaker 4: hubs for delivery, logistics and services fleet customers.
Speaker 5: Right.
Speaker 3: So the commercial side, right, commercial and consumer. Ev Realty
Speaker 3: CEO Patrick Sellivar joining us from joining us for Bloomberg
Speaker 3: Plugged in our weekly look at the World of Electric Vehicles,
Speaker 3: joining us from San Francisco. We'll get there. We'll get there.
Speaker 3: It's one of those days. It's a Tuesday, Patrick, good
Speaker 3: to have you here with us. Tell us, first of all,
Speaker 3: give us a little perspective about your company and what
Speaker 3: you guys are doing, the specific projects that you've already completed,
Speaker 3: size scale, who they are, and who is making use
Speaker 3: of them.
Speaker 1: Sure, Carol, Tim, it's nice to be here. So you
Speaker 1: captured it well. Ev Reality develops, deployes, and owns high
Speaker 1: powered EV charging hubs and these are specifically for commercial fleets.
Speaker 1: So think of anything from your local delivery van to
Speaker 1: a truck that takes containers from the board. And our
Speaker 1: approach in thinking about this, which really I think dunk
Speaker 1: Hill's well with the Biden administrationsnnouncement around the clean freight corridors,
Speaker 1: is we start with the grid. When you think about
Speaker 1: our power system, it was never designed to fuel trucks
Speaker 1: or for that matter, of cars. And while it's the
Speaker 1: only twenty four to seven sort of instantaneous matching marketplace
Speaker 1: in the world, matching supply and demand instantaneously, it was
Speaker 1: never designed to fuel all of these vehicles. So that's
Speaker 1: really where we start when you think about thirty million,
Speaker 1: forty million vehicles on the road over the next fifteen
Speaker 1: twenty years, finding those locations today that have a lot
Speaker 1: of power where you can bring the infrastructure forward sooner
Speaker 1: and allow that infrastructure to serve commercial fleets, especially some
Speaker 1: of the large fleets that produce so much of the
Speaker 1: emissions from the transportation sector. That's really what we're all about. Patrick.
Speaker 4: Is there a way to your question, I just want
Speaker 4: to jump in real quick. Is there is there a
Speaker 4: way that you're potentially closing off some business by focusing
Speaker 4: exclusively on commercial and fleet.
Speaker 10: I don't.
Speaker 1: I don't think so. In fact, I think we're really
Speaker 1: purposeful about thinking about the fleet sector for a few reasons,
Speaker 1: and and and in particular fleets that returned to a
Speaker 1: home base, whether it's to a warehouse, the parking lot
Speaker 1: where the vehicles are stored overnight. When you think about
Speaker 1: planning for large amounts of electrical infrastructure, knowing how the vehicles,
Speaker 1: how your customers use the trucks or the cars for
Speaker 1: whatever they're doing delivering a good, delivering a service, there's
Speaker 1: more certainty around routes, around planning, around schedules. Think of
Speaker 1: that as compared to building out a national like passenger
Speaker 1: vehicle infrastructure, where you're in some degrees guessing or anticipating
Speaker 1: uncertain demand. So that's that's one reason. And then the
Speaker 1: second I touched on is when you think about the
Speaker 1: emissions from the transportation sector nationally, it's now larger, obviously
Speaker 1: than emissions from the power sector, and that's been due
Speaker 1: to a lot of really good work over the last
Speaker 1: fifteen years. But within that, roughly twenty nine percent of
Speaker 1: emissions coming from transportation, about twenty five percent of it
Speaker 1: comes from medium and heavy duty trucks, and so you
Speaker 1: really and by the way, those are only about five
Speaker 1: percent of the vehicles on the road, So you can
Speaker 1: really target a significant emissions reduction with a relatively small
Speaker 1: number of vehicles. And again, those vehicles generally follow predictable routes.
Speaker 3: Patrick, how much more of those needs to be built out?
Speaker 3: And help me understand because on the consumer side, we've
Speaker 3: talked a lot about while there's still growth in the
Speaker 3: uptick if you will, of evs, we've seen a lot
Speaker 3: of slow down, right, and that consumers aren't jumping in
Speaker 3: so much. What about on the commercial side, how is
Speaker 3: the growth? Is it the uptick continuing? How does it
Speaker 3: compare to the last six to twelve months, give us
Speaker 3: a little perspective and just got about a minute and
Speaker 3: a half left here.
Speaker 1: Sure, carolcl the reality is right now today there's I
Speaker 1: don't know, ten or fifteen thousand electric, medium and heavy
Speaker 1: duty trucks on the road in the United States. That said,
Speaker 1: when you think about the plans that the administration has
Speaker 1: that states like California, and I think at this point
Speaker 1: eleven other states have adopted California's plans. Just in California,
Speaker 1: eleven you're looking at over five hundred thousand medium and
Speaker 1: heavy duty trucks on the road by twenty thirty five.
Speaker 1: When you think about the amount of charging and then
Speaker 1: the amount of power that needs to be pulled from
Speaker 1: the grid, you're talking about two hundred and sixty thousand
Speaker 1: chargers that need to be installed. You're talking about twenty
Speaker 1: five gigawatts of new power for a system that was
Speaker 1: never designed for that.
Speaker 3: Well, and forgive me, we've only got about twenty five
Speaker 3: seconds left here. I get it that there's a lot
Speaker 3: to be built out. Is its slowing down the demand
Speaker 3: for it? I'm just trying to get a feel on
Speaker 3: the commercial demand just quickly.
Speaker 1: No, And in fact, I think the National Freight Corridor
Speaker 1: strategy is actually really catalytic to focusing that demand, to
Speaker 1: finding those locations, these these hubs in major cities near
Speaker 1: ports where you have such a significant volume. If anything,
Speaker 1: I think you're starting to really see that use case,
Speaker 1: which the technology and the market and the policies are
Speaker 1: now well aligned, is really gaining traction amongst commercials.
Speaker 3: The operators, all right, Patrick, really love spending some time
Speaker 3: with you. Do come back soon, because we'd love to
Speaker 3: kind of dig a little bit deeper if we may
Speaker 3: in the future. Patrick Sullivan, Chief Executive officered ev Real
Speaker 3: to joining us from San Francisco.
Speaker 4: Timm the Journal.
Speaker 3: How about you let me drive?
Speaker 2: Oh no, no, no, no, who's going to drive?
Speaker 8: All right?
Speaker 5: Please?
Speaker 2: I'll do the riding gravels.
Speaker 8: I want to drive.
Speaker 10: It's a good question, good time.
Speaker 2: This is good drive to the globe down Trimmer effect Well,
Speaker 2: bri around on Bloomberg Radio.
Speaker 4: What is the drive to the closes? Less than twenty
Speaker 4: minutes to go until the close of trading and after
Speaker 4: that we do, of course get to fed Wednesday. As
Speaker 4: Charlie said, no question, Carol that the megacaps have gotten
Speaker 4: a lot of focus lately. After all, in video was
Speaker 4: up nearly two hundred and forty percent just last year.
Speaker 4: It's up around eighty percent so far this year. Our
Speaker 4: next guest, though, argues, it's time to think beyond those megacaps.
Speaker 3: All right, so let's get to it. Time for our
Speaker 3: drive to the close. Guest with us is Jatania Kanhari,
Speaker 3: Deputy CIO of the Solutions and Multi Asseid Group over
Speaker 3: at Morgan Stanley Investment Management, joining us right here in
Speaker 3: New York City. Jatania, nice to have you here with
Speaker 3: Tim and myself. Talk to us a little bit about
Speaker 3: your thinking of where the gains are going forward. Do
Speaker 3: you like the tech megacap names or the big megacaps,
Speaker 3: but do you also like other areas of the market.
Speaker 10: Yeah, I think you know it's time to be a
Speaker 10: little discerning and markets are also doing the same for you.
Speaker 10: If you look at the year to date moves, it's
Speaker 10: a couple of the megan seven outperforming, not all our
Speaker 10: outperforming now And just like any past tech innovation and
Speaker 10: revolution that's happened in the past, I think the gains
Speaker 10: will start disseminating to other sectors. So from the enablers
Speaker 10: which are the cloud and the semis companies, to adopters
Speaker 10: that are companies that will deploy AI and enhance their
Speaker 10: offerings and services and enhance their earnings and productivity. And
Speaker 10: we see opportunities in the cybersecurity space. You know, AI
Speaker 10: means a lot of data. Data proliferation means security of
Speaker 10: that data. So that's like the second derivative way of
Speaker 10: playing it, along with sectors like healthcare and even industrial itself.
Speaker 3: I wanted to jump in because you also like the
Speaker 3: energy space. We just came off a great interview with
Speaker 3: our own Alex Steele, who was talking with Jeff Curry
Speaker 3: over Carlisle Group. He's their chief strategy officer when it
Speaker 3: comes to energy pathways. So looking at the energy space
Speaker 3: holistically and kind of where there are opportunities, where do
Speaker 3: you see are the best opportunities when it comes to
Speaker 3: the energy space specifically.
Speaker 10: Yeah, so I do think oil is underinvested, underappreciated, and undervalued.
Speaker 10: Right when you look at oil, even despite evs becoming
Speaker 10: twelve to thirteen percent of the global fleet from less
Speaker 10: than a percent a decade ago, oil consumption is at
Speaker 10: an all time high. So demand has been keeping up
Speaker 10: so much.
Speaker 3: For the energy transition. Is that just because there's more
Speaker 3: of us out there using it or is it just
Speaker 3: like what like what are you know, how do you
Speaker 3: think about them the energy transition?
Speaker 10: I think energy transitions are marathons, not sprint sprints. They
Speaker 10: take a long time. So even historically when you you know,
Speaker 10: when we from steam to electricity and gas to electricity,
Speaker 10: those transitions took anywhere between sixty and ninety years, So
Speaker 10: this time is going to be not different. You know,
Speaker 10: solar wind are still sub ten percent of the energy mix,
Speaker 10: they will continue to dominate, you know, increase presence, but
Speaker 10: by the time that diffusion to dominance takes place, it
Speaker 10: can be decades. So in the interim, I do think
Speaker 10: that given the underinvestment in oil, if you see oil
Speaker 10: capics has been cut by half since twenty fifteen. So
Speaker 10: you have a demand side that is keeping up, you
Speaker 10: have a supply that is constrained, and you have an
Speaker 10: energy transition, and I think the market's beginning to will
Speaker 10: begin to realize that that is going to take a
Speaker 10: long time, which makes these assets very compelling from an
Speaker 10: investment standpoint.
Speaker 1: Yeah.
Speaker 4: I mean, look no further than the sort of the
Speaker 4: one that Hurts has done Carol, no great point with
Speaker 4: the with its transition Avis exactly, and look at the
Speaker 4: Detroit automakers too. I'm really interested in you know, you
Speaker 4: talked about, uh, some of the tech companies that are
Speaker 4: using AI, you talked about energy. Uh what about industrials.
Speaker 4: Where do you see opportunities in industrials.
Speaker 10: I do find industrials a very interesting group. It's a
Speaker 10: very diversified group within the you know, sector classifications, the
Speaker 10: typical classifications. But I think there are several tailwinds. You know,
Speaker 10: we we have the green capics, we have defense gapics,
Speaker 10: we have substitution capics. Because of supply chain diversion uh
Speaker 10: AI and data centers use a lot of energy, a
Speaker 10: lot of industrial capacity. Uh So, I think there are
Speaker 10: a lot of drivers for industry, Like it's related to AI,
Speaker 10: the electrification, et cetera. All of these are you know,
Speaker 10: sub segments within the industrial space. It has been ignored,
Speaker 10: you know, because Teck has been the name of the
Speaker 10: game last many years. Of course, there's beginning, you know,
Speaker 10: to be signs of you know, some value accretion that's
Speaker 10: happening in that sector. But I think that continued.
Speaker 3: Well to tell you one thing, and I just got it.
Speaker 3: We've just got about forty five seconds to go.
Speaker 7: All right.
Speaker 3: So I don't know, you're at a kid's birthday party
Speaker 3: or a family cocktail party or something over the weekend,
Speaker 3: someone says, so, how do you think about Nvidia? Like,
Speaker 3: how do you I don't know, what's the constructive conversation
Speaker 3: you have with individuals investors around a name like Nvidia.
Speaker 10: You know, I think in Vidia clearly could be one
Speaker 10: of the companies that dominates in the top ten market
Speaker 10: cap companies by the end of this decade, just like
Speaker 10: every decade has different leaders. And you know, given the
Speaker 10: scale size and you know the footprint of this company,
Speaker 10: it could very well be there. Nothing goes up in
Speaker 10: a straight line. You could have you know, draw downs.
Speaker 10: But I do think that you know, outside of the
Speaker 10: Mega seven, you know, the top ten will look very
Speaker 10: dramatically from today. Some of them made them.
Speaker 3: Yeah, that's that's great perspective. And those kids' birthday parties,
Speaker 3: I don't mean the kids are asking, it's like the
Speaker 3: parents who are all there.
Speaker 4: Depends on it depends on, you know, where the birthday
Speaker 4: party is. Some of these Silicon Valley birthday parties, they're
Speaker 4: talking about Copper and Blackwell.
Speaker 1: Kids are savvy.
Speaker 5: What do you in video?
Speaker 8: Chip?
Speaker 3: Oh my god, Christy crazy, great conversation, Jaitanya, thank you.
Speaker 3: Jatana Condri joining us, Deputy CIO of the Solutions and
Speaker 3: Multi Assy group of at Morgan Stanley Hundre ex let
Speaker 3: me excuse me, joining us right here on Bloomberg Business Week.
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