1 00:00:00,240 --> 00:00:03,280 Speaker 1: This is Bloomberg Business Week. I'm Carol Masser. Every day 2 00:00:03,279 --> 00:00:05,200 Speaker 1: we're bringing you the latest news from the world's of 3 00:00:05,200 --> 00:00:08,920 Speaker 1: business and finance, plus technology, politics. So much going on 4 00:00:08,960 --> 00:00:12,160 Speaker 1: in the world of politics, economics, and it's all harnessing 5 00:00:12,160 --> 00:00:14,960 Speaker 1: the power of Business Week reporters and editors. You can 6 00:00:15,000 --> 00:00:18,720 Speaker 1: download Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 7 00:00:19,040 --> 00:00:21,200 Speaker 1: You can also listen to a radio show at two 8 00:00:21,200 --> 00:00:24,000 Speaker 1: pm Eastern on Bloomberg Radio, and be sure to watch 9 00:00:24,040 --> 00:00:27,520 Speaker 1: us too on YouTube by searching Bloomberg Global News. You 10 00:00:27,560 --> 00:00:31,200 Speaker 1: know it's interesting here, uh, Sarah. I think the market 11 00:00:31,280 --> 00:00:35,400 Speaker 1: is just really focusing on those the fiscal stimulus discussions, 12 00:00:35,400 --> 00:00:38,640 Speaker 1: and again there is a deadline tomorrow. But I don't 13 00:00:38,640 --> 00:00:41,520 Speaker 1: know what it's just the field doesn't look that great 14 00:00:41,640 --> 00:00:44,519 Speaker 1: right here, even though the President is in fact pushing 15 00:00:44,520 --> 00:00:46,880 Speaker 1: forward right you described as that it as on again, 16 00:00:46,960 --> 00:00:49,400 Speaker 1: off again. We could probably add four more on agains 17 00:00:49,440 --> 00:00:52,839 Speaker 1: and off against to that, but it looks like and 18 00:00:52,840 --> 00:00:55,040 Speaker 1: I've gone on some emails from investors to set today 19 00:00:55,280 --> 00:00:58,040 Speaker 1: saying that the packages that have presented still look to 20 00:00:58,080 --> 00:01:00,320 Speaker 1: be a non starter between the Democat, demo Crats and 21 00:01:00,360 --> 00:01:03,040 Speaker 1: Republicans and it's just looking a bit unlikely ahead of 22 00:01:03,040 --> 00:01:05,920 Speaker 1: the election. All right, let's set the business week agenda here, 23 00:01:06,000 --> 00:01:07,520 Speaker 1: let's kick it off. We can do that with Gina 24 00:01:07,560 --> 00:01:10,920 Speaker 1: Martin Adams, chief equity strategist for Bloomberg Intelligence. He joined 25 00:01:11,000 --> 00:01:14,000 Speaker 1: us on the phone from New Jersey, and Dave Wilson, 26 00:01:14,000 --> 00:01:17,880 Speaker 1: of course, Bloomberg Stocks Editor UH, also on remote access 27 00:01:18,040 --> 00:01:20,360 Speaker 1: from the great state of New Jersey. Gina, let's start 28 00:01:20,400 --> 00:01:23,120 Speaker 1: with you here. You have a fascinating UH piece of 29 00:01:23,160 --> 00:01:27,160 Speaker 1: research out talking about some of the underperformers and how 30 00:01:27,280 --> 00:01:31,640 Speaker 1: this third quarter earning season maybe a catalyst. Yeah, I 31 00:01:31,640 --> 00:01:34,800 Speaker 1: think it can be. U. First, good afternoon, everybody. Welcome 32 00:01:34,840 --> 00:01:37,160 Speaker 1: to Monday, and a little bit of a slow Monday 33 00:01:37,200 --> 00:01:41,360 Speaker 1: so far, but not happy Monday, Happy Monday. You know 34 00:01:41,680 --> 00:01:44,400 Speaker 1: what we talked about today in our note is a 35 00:01:44,600 --> 00:01:47,680 Speaker 1: basket of oversold stocks that we follow on a weekly basis. 36 00:01:47,720 --> 00:01:51,320 Speaker 1: We rebalanced the most oversold stocks in the spire and 37 00:01:51,440 --> 00:01:55,320 Speaker 1: any given week tend to dramatically outperform over a week's 38 00:01:55,400 --> 00:01:57,880 Speaker 1: time as they bounce off at very very low levels. 39 00:01:57,920 --> 00:02:00,280 Speaker 1: And what we've done in that note is highlighted that 40 00:02:00,320 --> 00:02:02,440 Speaker 1: there are a few of those key oversold stocks that 41 00:02:02,480 --> 00:02:04,640 Speaker 1: are due to report earnings this week, and they may 42 00:02:04,680 --> 00:02:07,000 Speaker 1: have the opportunity to really change what has been a 43 00:02:07,080 --> 00:02:11,040 Speaker 1: very sour tone um at least from the market response 44 00:02:11,080 --> 00:02:13,959 Speaker 1: to earnings. So far, We've had tremendous reports out of 45 00:02:13,960 --> 00:02:18,360 Speaker 1: the financial sector, really really strong beats, more than companies 46 00:02:18,360 --> 00:02:21,560 Speaker 1: that have reported of beat expectations, and yet the price 47 00:02:21,600 --> 00:02:24,320 Speaker 1: action in response to those expectations as the negative. So 48 00:02:24,360 --> 00:02:28,079 Speaker 1: we're looking for these reporters to potentially change that tone. 49 00:02:28,639 --> 00:02:31,280 Speaker 1: On our shortlist of Verizon A ten team Las Vegas 50 00:02:31,280 --> 00:02:34,760 Speaker 1: fans to watch this week, Dave, let's bring you in 51 00:02:34,800 --> 00:02:36,920 Speaker 1: here because in addition to the names that Gina just 52 00:02:37,040 --> 00:02:40,280 Speaker 1: named for us, will also hear from Tesla this week. Netflix. Sure, 53 00:02:40,320 --> 00:02:42,280 Speaker 1: it's been a sour tone, but we are entering the 54 00:02:42,360 --> 00:02:45,520 Speaker 1: second largest week of earning season of the season. What 55 00:02:45,600 --> 00:02:47,920 Speaker 1: are you keeping an eye on this week? Well, I mean, 56 00:02:48,080 --> 00:02:51,079 Speaker 1: it's just a matter of how forthcoming our company is 57 00:02:51,120 --> 00:02:53,880 Speaker 1: going to be when it comes to talking about their 58 00:02:53,919 --> 00:02:56,800 Speaker 1: prospects for this quarter or next year. I mean, certainly 59 00:02:56,800 --> 00:02:59,799 Speaker 1: one of the stories of is that the coronavirus let 60 00:02:59,800 --> 00:03:02,320 Speaker 1: a lot of companies to which rather forecast. We've seen 61 00:03:02,400 --> 00:03:06,440 Speaker 1: some of them come back. Others have been more reluctant 62 00:03:06,480 --> 00:03:11,560 Speaker 1: to forecast even if, say their third quarter results are 63 00:03:11,840 --> 00:03:15,120 Speaker 1: relatively positive. So you know that that's definitely going to 64 00:03:15,160 --> 00:03:18,640 Speaker 1: be worth watching as we proceed through all these earnings 65 00:03:18,639 --> 00:03:22,000 Speaker 1: reports do in the next couple of weeks. So, Gina, 66 00:03:22,280 --> 00:03:25,160 Speaker 1: you mentioned the banks here. What was your takeaway from 67 00:03:25,160 --> 00:03:27,920 Speaker 1: the banks here? It seems like the numbers were pretty good, 68 00:03:28,440 --> 00:03:31,880 Speaker 1: but the outlook was perhaps a little bit more conservative. 69 00:03:32,000 --> 00:03:34,120 Speaker 1: Are you do you expect to hear some of that 70 00:03:34,280 --> 00:03:37,280 Speaker 1: going forward with some of these non bank companies. Yeah, 71 00:03:37,280 --> 00:03:39,600 Speaker 1: I'm hopeful not, because I do think that that's what 72 00:03:39,720 --> 00:03:42,160 Speaker 1: gotten the way of the banks is. You know, they 73 00:03:42,160 --> 00:03:45,000 Speaker 1: did come out and dramatically beat expectations. At a matter 74 00:03:45,040 --> 00:03:48,280 Speaker 1: of fact, at the start of earning season, financial sector 75 00:03:48,400 --> 00:03:51,560 Speaker 1: was expected to produce earning and earnings drop of nearly 76 00:03:51,600 --> 00:03:54,040 Speaker 1: five percent, and just because of the banks that reported 77 00:03:54,120 --> 00:03:56,720 Speaker 1: last week, that earnings decline is now expected to be 78 00:03:56,800 --> 00:03:59,200 Speaker 1: less than three percent, So they didn't make a very 79 00:03:59,280 --> 00:04:03,800 Speaker 1: big ustment to expectations. All of the SMP five is 80 00:04:03,880 --> 00:04:06,720 Speaker 1: virtually adjusting expectations higher for a third quarter. But that's 81 00:04:06,720 --> 00:04:08,920 Speaker 1: where the buck stops, and that's the problem I think 82 00:04:08,920 --> 00:04:11,920 Speaker 1: that the market is running into is analysts are not 83 00:04:12,000 --> 00:04:15,080 Speaker 1: taking the cues from an incredible beating the second quarter 84 00:04:15,120 --> 00:04:17,320 Speaker 1: and now it's looking like a very very strong beating 85 00:04:17,360 --> 00:04:20,480 Speaker 1: the third quarter to raise expectations into the future. As 86 00:04:20,480 --> 00:04:22,080 Speaker 1: a matter of fact, this is what we're writing about 87 00:04:22,120 --> 00:04:26,040 Speaker 1: for tomorrow is expectations into future quarters have basically just 88 00:04:26,120 --> 00:04:30,080 Speaker 1: been stagnant and have been for some time because analysts 89 00:04:30,120 --> 00:04:33,039 Speaker 1: are not taking any sort of confidence boost out of 90 00:04:33,040 --> 00:04:37,640 Speaker 1: these earnings results. Dave mentioned the guidance has been relatively limited. 91 00:04:38,240 --> 00:04:40,520 Speaker 1: The guidance that we have gotten has been very strong, 92 00:04:40,680 --> 00:04:42,600 Speaker 1: but it's just a handful of companies it's willing to 93 00:04:42,640 --> 00:04:44,200 Speaker 1: tell us that it's very strong, and those are the 94 00:04:44,240 --> 00:04:46,840 Speaker 1: companies that have been strong throughout for the most parts. 95 00:04:46,920 --> 00:04:50,120 Speaker 1: So we need something to change. Um, we need a 96 00:04:50,120 --> 00:04:54,320 Speaker 1: little bit more visibility to evolve. I think, Uh, if not, 97 00:04:54,480 --> 00:04:57,120 Speaker 1: we're going to be sort of churning for a while 98 00:04:57,560 --> 00:05:01,839 Speaker 1: waiting for that visibility to proven to one. I fear, 99 00:05:02,160 --> 00:05:03,960 Speaker 1: do you know what are the underlying signals of the 100 00:05:04,000 --> 00:05:05,960 Speaker 1: market really telling us? Though? At the moment, I look 101 00:05:05,960 --> 00:05:08,080 Speaker 1: at the NASAC one hundred right now, down about one 102 00:05:08,120 --> 00:05:10,479 Speaker 1: percent down for a fifth day that's the longest losing 103 00:05:10,480 --> 00:05:13,080 Speaker 1: streaks since August. But at the same time we have 104 00:05:13,160 --> 00:05:15,840 Speaker 1: to remember small caps the Russell two thousands up more 105 00:05:15,839 --> 00:05:18,039 Speaker 1: than eight percent this month. We've also seen some other 106 00:05:18,080 --> 00:05:20,800 Speaker 1: cyclical areas of the market performing well. Can you take 107 00:05:20,839 --> 00:05:23,560 Speaker 1: that and run with it as a bullish signal. Yeah. 108 00:05:23,600 --> 00:05:25,640 Speaker 1: We actually wrote about this in our chart book last 109 00:05:25,640 --> 00:05:28,520 Speaker 1: Thursday that even though the market is churning, there are 110 00:05:28,600 --> 00:05:31,920 Speaker 1: some really strong signals of rotation emerging in that churn. 111 00:05:31,960 --> 00:05:34,200 Speaker 1: One of them is as you correctly identify the small 112 00:05:34,240 --> 00:05:38,600 Speaker 1: cap index. We've also seen really key constituents of industrials 113 00:05:38,680 --> 00:05:44,600 Speaker 1: and technology breakout are automated technical pattern recognition software recognized 114 00:05:44,640 --> 00:05:48,159 Speaker 1: a breakout in Caterpillar as well as Micron last week, 115 00:05:48,720 --> 00:05:52,400 Speaker 1: So those are pretty strong indications of a rotation. And 116 00:05:52,440 --> 00:05:54,680 Speaker 1: then this has been our scene since late August is 117 00:05:55,200 --> 00:05:58,000 Speaker 1: we think the market is going through a rotation, rotating 118 00:05:58,040 --> 00:06:02,400 Speaker 1: to potentially stronger earnings growers in the year ahead as 119 00:06:02,400 --> 00:06:05,520 Speaker 1: opposed to the defensive stories which has really dominated the 120 00:06:05,560 --> 00:06:09,920 Speaker 1: markets games from the March lows. And that rotation can 121 00:06:10,000 --> 00:06:13,080 Speaker 1: mean the market concern sideways for a while. But if 122 00:06:13,080 --> 00:06:17,000 Speaker 1: we're rotating into supercyclicals, we're rotating into leading indicators or 123 00:06:17,080 --> 00:06:20,040 Speaker 1: leading stocks, then it probably is a pretty good sign 124 00:06:20,120 --> 00:06:22,920 Speaker 1: of things to come once we've reached the end of 125 00:06:22,920 --> 00:06:26,080 Speaker 1: that charning process. Dave, real quick, what are you looking 126 00:06:26,120 --> 00:06:29,840 Speaker 1: for earnings wise? What's the big one next up? IBM 127 00:06:29,960 --> 00:06:31,880 Speaker 1: after the Clothes. That's gonna be the one to watch 128 00:06:32,480 --> 00:06:35,279 Speaker 1: IBM after the closes. We're gonna ana Rona from Bloomberg Intelligence. 129 00:06:35,279 --> 00:06:37,040 Speaker 1: He's gonna join us right after the Clothes to kind 130 00:06:37,040 --> 00:06:40,120 Speaker 1: of give us his quick take of those numbers. Gina 131 00:06:40,160 --> 00:06:42,120 Speaker 1: Martin Adams, thank you so much for joining us, Chief 132 00:06:42,160 --> 00:06:45,800 Speaker 1: equity strategist Bloomberg Intelligence, joining us on the phone from 133 00:06:45,839 --> 00:06:49,760 Speaker 1: New Jersey, and the Dave Wilson, Bloomberg Stocks Editor, also 134 00:06:49,880 --> 00:06:52,480 Speaker 1: on remote from New Jersey. We've got New Jersey covered. Sarah. 135 00:06:52,520 --> 00:06:54,599 Speaker 1: I'm in Jersey as well, but you are in the studio. 136 00:06:54,920 --> 00:06:57,320 Speaker 1: I am in the studio. I must say that it's 137 00:06:57,320 --> 00:06:59,560 Speaker 1: a little bit more lively in the office today, but 138 00:06:59,640 --> 00:07:02,240 Speaker 1: still nothing like it used to be. Obviously, we miss 139 00:07:02,279 --> 00:07:04,479 Speaker 1: you in here. That's right, we'll be Hopefully we'll get 140 00:07:04,520 --> 00:07:07,880 Speaker 1: back there soon. This is Bloomberg Business Week with Carol 141 00:07:07,920 --> 00:07:11,000 Speaker 1: Messer from Bloomberg Radio. We're really in the in that 142 00:07:11,160 --> 00:07:13,640 Speaker 1: prime testing stage right now where there's a lot of 143 00:07:13,640 --> 00:07:17,080 Speaker 1: tests going on around the world. Bloomberg News Adventure Capital 144 00:07:17,200 --> 00:07:21,160 Speaker 1: reporter Ceremony Bride is actually taking part in one of 145 00:07:21,200 --> 00:07:23,720 Speaker 1: those tests. Let's get a real sense of what we're 146 00:07:23,760 --> 00:07:27,240 Speaker 1: looking at their Sarah, thanks so much for joining us. UM. 147 00:07:27,480 --> 00:07:30,600 Speaker 1: Tell us about what you're doing and why you're doing 148 00:07:30,600 --> 00:07:34,880 Speaker 1: it well. Um, at the beginning of the pandemic, I 149 00:07:34,960 --> 00:07:38,600 Speaker 1: just felt awful about everything that was happening, and the 150 00:07:38,600 --> 00:07:42,160 Speaker 1: worst thing for me was how scared everybody was because 151 00:07:42,160 --> 00:07:46,480 Speaker 1: nobody really knew what COVID was, how they could catch it, 152 00:07:46,760 --> 00:07:51,120 Speaker 1: where when. So I just wanted to do something to 153 00:07:51,240 --> 00:07:54,480 Speaker 1: try to help the situation. So I thought I would 154 00:07:54,480 --> 00:07:57,080 Speaker 1: look into vaccine childs and I did a lot of 155 00:07:57,120 --> 00:08:01,160 Speaker 1: research online, figured out which child would be taking place 156 00:08:01,280 --> 00:08:04,880 Speaker 1: in the San Francisco area where I live, and UM 157 00:08:05,000 --> 00:08:08,000 Speaker 1: figured out how to sign up for one of those. 158 00:08:08,040 --> 00:08:10,360 Speaker 1: And it was tough because even if you know the 159 00:08:10,440 --> 00:08:14,560 Speaker 1: jug companies that are going to be testing vaccines, I 160 00:08:14,640 --> 00:08:17,600 Speaker 1: learned a lot. I learned they outsourced those tests two 161 00:08:17,680 --> 00:08:20,600 Speaker 1: different clinics, so then you have to figure out which 162 00:08:20,640 --> 00:08:22,920 Speaker 1: the clinics are doing it and then you have to 163 00:08:22,960 --> 00:08:29,000 Speaker 1: call them and get in their databases. That eventually I 164 00:08:29,160 --> 00:08:32,240 Speaker 1: managed to sign up for the Fiser trial. So Sarah, 165 00:08:32,280 --> 00:08:34,360 Speaker 1: give us some color on what it actually looks like 166 00:08:34,480 --> 00:08:36,640 Speaker 1: or feels like to be in one of these trials. 167 00:08:36,640 --> 00:08:38,960 Speaker 1: I mean, how long have you been in it? How 168 00:08:38,960 --> 00:08:41,360 Speaker 1: often do you have to be checking in? Do you 169 00:08:41,440 --> 00:08:44,040 Speaker 1: have to go in for in person visits? What does 170 00:08:44,120 --> 00:08:47,360 Speaker 1: this all look like? Sure? So um. I went to 171 00:08:47,440 --> 00:08:51,440 Speaker 1: this clinic in Walnut Creek, California, called the Diabolo Clinic. 172 00:08:51,480 --> 00:08:57,000 Speaker 1: It was very well run um lots of distancing, uh, 173 00:08:57,480 --> 00:09:00,440 Speaker 1: very kind of efficient feeling. I didn't you like I 174 00:09:00,480 --> 00:09:04,520 Speaker 1: was wasting any time, but it was a substantial commitment 175 00:09:04,520 --> 00:09:07,760 Speaker 1: of time. The first time that I went was probably 176 00:09:07,800 --> 00:09:12,760 Speaker 1: about two hours, tons of paperwork. I met with a doctor, 177 00:09:12,800 --> 00:09:17,800 Speaker 1: I met with a bottomist. They did a COVID test um, 178 00:09:17,880 --> 00:09:21,120 Speaker 1: but they don't really tell you any of the results 179 00:09:21,200 --> 00:09:23,959 Speaker 1: because they don't want you to know if you're getting 180 00:09:24,000 --> 00:09:27,360 Speaker 1: the placebo or the real thing. And also they don't 181 00:09:27,360 --> 00:09:31,439 Speaker 1: know I have a patient number. All my records are 182 00:09:31,600 --> 00:09:35,720 Speaker 1: somehow separated from my name, so you know. I asked 183 00:09:35,760 --> 00:09:38,160 Speaker 1: them do you know what I got? And they said no, 184 00:09:38,520 --> 00:09:41,800 Speaker 1: we have it all rigged up so we can't tell. 185 00:09:42,640 --> 00:09:49,520 Speaker 1: And um the actual shot for what was either the 186 00:09:49,600 --> 00:09:52,600 Speaker 1: vaccine or the placebo came at the end of that 187 00:09:53,559 --> 00:09:57,120 Speaker 1: first visit. It was very funny because there was this, 188 00:09:57,280 --> 00:09:59,320 Speaker 1: you know, all I was being led from room to 189 00:09:59,440 --> 00:10:03,080 Speaker 1: room for different tests and talks with different people, and 190 00:10:03,120 --> 00:10:05,880 Speaker 1: then there was a big empty room, empty except for 191 00:10:06,320 --> 00:10:10,520 Speaker 1: a huge blue chair. It almost looked regal like, look 192 00:10:10,640 --> 00:10:13,080 Speaker 1: so medical at the same time, and I sat down 193 00:10:13,080 --> 00:10:15,640 Speaker 1: and they gave me my shots. I felt fine that 194 00:10:15,760 --> 00:10:20,840 Speaker 1: first time. UM I went back for a booster shot again, 195 00:10:20,880 --> 00:10:24,439 Speaker 1: either the real thing or the placebo three weeks later. 196 00:10:25,480 --> 00:10:29,240 Speaker 1: That hit me pretty hard. You know. I can't say 197 00:10:29,360 --> 00:10:31,880 Speaker 1: for sure if I got the vaccine or if it 198 00:10:31,960 --> 00:10:34,320 Speaker 1: was just a coincidence that maybe I got a weird 199 00:10:34,320 --> 00:10:36,840 Speaker 1: about a twenty four hour flu or something around the 200 00:10:36,880 --> 00:10:40,920 Speaker 1: same time, but I did not feel good after that. UM. 201 00:10:40,960 --> 00:10:44,520 Speaker 1: I've been back once more, about a month after that shot, 202 00:10:44,600 --> 00:10:47,559 Speaker 1: so they could take blood work and so on. I 203 00:10:47,559 --> 00:10:52,000 Speaker 1: imagine they're testing me for um COVID and antibodies again, 204 00:10:52,440 --> 00:10:55,520 Speaker 1: and then I will go back three more times over 205 00:10:55,800 --> 00:10:58,679 Speaker 1: the course of two years total. So at the end 206 00:10:58,720 --> 00:11:01,040 Speaker 1: of the two year study, I'll have been to this 207 00:11:01,080 --> 00:11:05,280 Speaker 1: clinic six times, and I also have an app on 208 00:11:05,360 --> 00:11:08,520 Speaker 1: my phone, so it's called child Max. I had to 209 00:11:08,600 --> 00:11:11,840 Speaker 1: download it on my first visit. So after each of 210 00:11:11,880 --> 00:11:15,480 Speaker 1: those shots, every single day, it would pay me and 211 00:11:15,600 --> 00:11:20,560 Speaker 1: ask me are you experiencing nausea? As your temperature elevated. 212 00:11:20,640 --> 00:11:22,640 Speaker 1: There were a bunch of questions, but I would have 213 00:11:22,720 --> 00:11:26,480 Speaker 1: to go through an answer on that app. Since then, 214 00:11:27,240 --> 00:11:30,320 Speaker 1: it now buzzes me once a week and just asks 215 00:11:30,400 --> 00:11:35,320 Speaker 1: are you experiencing symptoms? And I'm not, so I said no, 216 00:11:35,760 --> 00:11:38,160 Speaker 1: and then there are no more questions on the app. 217 00:11:38,800 --> 00:11:42,200 Speaker 1: Thank goodness. I haven't experienced symptoms. If I ever do, 218 00:11:42,360 --> 00:11:45,720 Speaker 1: I'd imagine the questions again would be more comprehensive on 219 00:11:45,800 --> 00:11:48,559 Speaker 1: the app. So, Sarah, do I take from this that 220 00:11:49,240 --> 00:11:53,800 Speaker 1: fiser won't know whether this is this test is effective 221 00:11:53,840 --> 00:11:57,280 Speaker 1: for two years, as opposed to people talking about weeks 222 00:11:57,320 --> 00:12:01,040 Speaker 1: or months trying to get some knowledge from these tests. No. 223 00:12:01,640 --> 00:12:04,640 Speaker 1: My take, and this is just based on reading a 224 00:12:04,640 --> 00:12:07,720 Speaker 1: lot of what my colleagues at Bloomberg has been reporting, 225 00:12:07,800 --> 00:12:11,199 Speaker 1: is they'll have a pretty good idea. And let's say 226 00:12:11,240 --> 00:12:15,320 Speaker 1: that I went UM and had the test or had 227 00:12:15,360 --> 00:12:19,000 Speaker 1: the shot and UM I had the second one on 228 00:12:19,120 --> 00:12:23,480 Speaker 1: September one, so I've already been back once they've measured 229 00:12:24,200 --> 00:12:27,240 Speaker 1: my blood for antibodies. So let's say I did get 230 00:12:27,280 --> 00:12:29,640 Speaker 1: the real shot and not the booster. They already know 231 00:12:29,960 --> 00:12:33,719 Speaker 1: whether my blood has antibodies in it, so I think 232 00:12:33,760 --> 00:12:38,240 Speaker 1: they have a good idea. And there are thousand people 233 00:12:38,280 --> 00:12:40,360 Speaker 1: like me across the country that have been a part 234 00:12:40,360 --> 00:12:44,800 Speaker 1: of this trial. So they are getting those early results 235 00:12:44,840 --> 00:12:47,520 Speaker 1: of whether the people who got the early tests have 236 00:12:47,640 --> 00:12:50,680 Speaker 1: antibodies or not. They are starting to see that right now, 237 00:12:51,320 --> 00:12:54,400 Speaker 1: and so then over two years they'll be checking for 238 00:12:54,480 --> 00:12:56,400 Speaker 1: the people who got the real shot. Oh do they 239 00:12:56,440 --> 00:12:59,240 Speaker 1: still have antibodies six months later? Do they still have 240 00:12:59,360 --> 00:13:01,319 Speaker 1: them a yearly? Earth do they still have them two 241 00:13:01,360 --> 00:13:04,360 Speaker 1: years later? So it's I think that part is testing 242 00:13:04,440 --> 00:13:07,240 Speaker 1: how long it might be effective, So really quick, just 243 00:13:07,320 --> 00:13:10,400 Speaker 1: to wrap up, Sarah, is your sense then that the test, 244 00:13:10,520 --> 00:13:12,559 Speaker 1: the study might not end for two years, but if 245 00:13:12,559 --> 00:13:14,960 Speaker 1: there are signs that it works, they'll release it to 246 00:13:14,960 --> 00:13:19,520 Speaker 1: the public before it's over. That's what they've said that 247 00:13:19,600 --> 00:13:22,280 Speaker 1: they're planning to do. And again, they'll know whether it's 248 00:13:22,320 --> 00:13:25,880 Speaker 1: working right now, and then the rest of it is 249 00:13:25,920 --> 00:13:28,920 Speaker 1: just to see how long it works for. And one 250 00:13:28,920 --> 00:13:31,560 Speaker 1: more thing, I'd like to say that I felt really 251 00:13:31,640 --> 00:13:34,679 Speaker 1: sick after that second test, So clear your schedules that 252 00:13:34,880 --> 00:13:37,480 Speaker 1: once you do get the vaccines, if that was the 253 00:13:37,520 --> 00:13:40,880 Speaker 1: real thing. Seravic right, thank you so much. We appreciate that. 254 00:13:40,920 --> 00:13:43,959 Speaker 1: Servic right. Jeez a Vent, your Capital reporter for Bloomberg News, 255 00:13:44,040 --> 00:13:47,360 Speaker 1: joining us on the phone from San Francisco. This is 256 00:13:47,400 --> 00:13:51,720 Speaker 1: Bloomberg Business Week with Carol Messer from Bloomberg Radio. Let's 257 00:13:51,720 --> 00:13:55,040 Speaker 1: get to that M and A activity, Chronical Phillips buying 258 00:13:55,120 --> 00:13:58,640 Speaker 1: Concho Resources for about nine point seven billion dollars in stock. 259 00:13:59,080 --> 00:14:02,120 Speaker 1: That's the largest shale industry deal since a collapse in 260 00:14:02,280 --> 00:14:05,000 Speaker 1: energy demand earlier this year. Let's get some details. We 261 00:14:05,040 --> 00:14:07,600 Speaker 1: can do that with a good friend, Fernando Valley, oil 262 00:14:07,679 --> 00:14:10,800 Speaker 1: and gas analysts for Bloomberg Intelligence. He joins us on 263 00:14:10,840 --> 00:14:13,520 Speaker 1: the phone from New York City. So, Fernando, thumbs up, 264 00:14:13,800 --> 00:14:17,120 Speaker 1: thumbs down? Do you like this deal? And why? All right? 265 00:14:17,160 --> 00:14:20,320 Speaker 1: Paul glad to be here. Definitely like this deal for 266 00:14:20,320 --> 00:14:22,480 Speaker 1: for both really, if there are two to the premier 267 00:14:22,520 --> 00:14:25,560 Speaker 1: players in the shale patch, and for Chronico you're getting 268 00:14:25,840 --> 00:14:29,200 Speaker 1: an entity that already generates free cash flow has a 269 00:14:29,200 --> 00:14:31,800 Speaker 1: lot of locations in an area at the Permian basin 270 00:14:32,400 --> 00:14:35,720 Speaker 1: where you really didn't have any locations beforehand, and if 271 00:14:35,720 --> 00:14:38,200 Speaker 1: you're Conto, you're getting all stuck to you. Also, you 272 00:14:38,240 --> 00:14:41,840 Speaker 1: still capture an eventual upside from an oil prester recovery 273 00:14:41,840 --> 00:14:44,480 Speaker 1: in the next several years, and you're getting probably one 274 00:14:44,520 --> 00:14:47,640 Speaker 1: of the few companies that's been all about generating pre 275 00:14:48,040 --> 00:14:51,720 Speaker 1: cash flow from shale for the past ten years. Conico 276 00:14:51,880 --> 00:14:55,920 Speaker 1: is really right sized for a lower for longer from 277 00:14:55,960 --> 00:14:59,280 Speaker 1: the oil price crash. So they came into this downturn 278 00:14:59,760 --> 00:15:04,200 Speaker 1: all lady prepared for an eventual prolonged weakness, and so 279 00:15:04,240 --> 00:15:07,720 Speaker 1: they're in really good shape. And Chronical really also helps 280 00:15:07,800 --> 00:15:11,720 Speaker 1: lower the corporate declines. Remember, shale declines really quickly at first, 281 00:15:12,040 --> 00:15:14,480 Speaker 1: and so Conical because they have exposure to l en 282 00:15:14,520 --> 00:15:18,680 Speaker 1: G oil sands conventional, their corporate decline rates are closer 283 00:15:18,720 --> 00:15:22,800 Speaker 1: to ten percent as opposed to you you've seen shale. 284 00:15:23,640 --> 00:15:26,240 Speaker 1: So thumbs up all around from you, Fernando. How does 285 00:15:26,240 --> 00:15:30,239 Speaker 1: this Conjo acquisition though, change Conco's production profile and strategy, 286 00:15:30,280 --> 00:15:35,040 Speaker 1: if at all? It doesn't really change their strategy, mostly 287 00:15:35,080 --> 00:15:39,400 Speaker 1: because Concho is also being focused on more moderate growth 288 00:15:39,640 --> 00:15:41,880 Speaker 1: and returns as opposed to some of the players that 289 00:15:41,920 --> 00:15:44,720 Speaker 1: were growing at fifty to six percent for random and 290 00:15:44,840 --> 00:15:50,520 Speaker 1: taking on significant leverage. The post post merger profile, they're 291 00:15:50,560 --> 00:15:53,800 Speaker 1: still gonna be under one and a half times du 292 00:15:54,520 --> 00:15:56,880 Speaker 1: more so as they captured a five million dollars and 293 00:15:56,920 --> 00:16:01,560 Speaker 1: synergies they mentioned UM, so they're erg is really complementary. 294 00:16:02,280 --> 00:16:05,560 Speaker 1: What it does change is that increases Chronicle is consolidated 295 00:16:05,560 --> 00:16:08,440 Speaker 1: the climate that I mentioned UM, but it does so 296 00:16:08,760 --> 00:16:11,600 Speaker 1: in the core of the Permian basin, which is the 297 00:16:11,920 --> 00:16:15,640 Speaker 1: premier shale basin. When you have the profile in the 298 00:16:15,680 --> 00:16:19,000 Speaker 1: other asset the Chronicle has, it can be a complementary play. 299 00:16:19,320 --> 00:16:21,200 Speaker 1: It can be something where they don't they don't need 300 00:16:21,240 --> 00:16:24,160 Speaker 1: to grow it at thirties, and they can grow more 301 00:16:24,160 --> 00:16:27,520 Speaker 1: slowly and and really get that cash return on capital 302 00:16:27,600 --> 00:16:29,920 Speaker 1: that they've been targeting for a really long time and 303 00:16:29,960 --> 00:16:33,880 Speaker 1: they needed because their boxing position is dwindling. Their eagle 304 00:16:33,960 --> 00:16:38,040 Speaker 1: fourth position is also slowing down considerably, so they needed 305 00:16:38,080 --> 00:16:40,040 Speaker 1: to grow and the place to grow in the US 306 00:16:40,280 --> 00:16:43,680 Speaker 1: at the current oil priced outlook is really the Permium basis. 307 00:16:44,360 --> 00:16:47,120 Speaker 1: All right, Fernando, as a former investment banker, this is 308 00:16:47,160 --> 00:16:50,200 Speaker 1: my next question, are we gonna do more deals in 309 00:16:50,280 --> 00:16:52,760 Speaker 1: the shale patch? Are we gonna this just just the beginning. 310 00:16:54,360 --> 00:16:57,480 Speaker 1: I mean the beginning really was Chevanovo and and this 311 00:16:57,600 --> 00:17:01,480 Speaker 1: is why, uh, certainly not the last one. We don't think. Uh. 312 00:17:01,520 --> 00:17:04,880 Speaker 1: There is a need for the industry to right size 313 00:17:05,000 --> 00:17:08,119 Speaker 1: for a lower for longer or a lower forever oil 314 00:17:08,160 --> 00:17:11,800 Speaker 1: price scenario, and a lot of the companies were really 315 00:17:11,800 --> 00:17:15,800 Speaker 1: preparing for sixty five seventy dollars and we just don't 316 00:17:15,840 --> 00:17:19,360 Speaker 1: see that happening anytime soon. UM. You're either looking to 317 00:17:19,400 --> 00:17:23,280 Speaker 1: improve your overall drilling locations, you may have produced too 318 00:17:23,359 --> 00:17:26,920 Speaker 1: much and run out of the really good stuff UM 319 00:17:27,160 --> 00:17:31,800 Speaker 1: in in your portfolio, or you could have an issue 320 00:17:31,840 --> 00:17:34,760 Speaker 1: with your balance sheet. So for Carnico, they were looking 321 00:17:34,760 --> 00:17:36,879 Speaker 1: for more locations. For Concio, they were looking for a 322 00:17:37,000 --> 00:17:41,119 Speaker 1: really strong balance sheet. UM. And that that makes sense 323 00:17:41,960 --> 00:17:44,080 Speaker 1: where we see an issue or the players that have 324 00:17:44,200 --> 00:17:47,320 Speaker 1: both run through most of its portfolio and also have 325 00:17:47,440 --> 00:17:49,879 Speaker 1: significant leverage. So we think we'll see mergers in the 326 00:17:49,960 --> 00:17:53,879 Speaker 1: high quality names, but the lower quality, highly leveraged names 327 00:17:54,119 --> 00:17:56,800 Speaker 1: they'll struggle to catch a bid. In this scenario. There's 328 00:17:56,800 --> 00:17:59,520 Speaker 1: a lot of resources out there, not necessarily a lot 329 00:17:59,520 --> 00:18:02,159 Speaker 1: of cap So it's really the high quality names that 330 00:18:02,160 --> 00:18:05,080 Speaker 1: we're going to be looked at. So quick one to 331 00:18:05,119 --> 00:18:07,399 Speaker 1: wrap it up. Yeah, good, it's a quick one to 332 00:18:07,400 --> 00:18:08,879 Speaker 1: wrap it up. So if we have forty dollars a 333 00:18:08,920 --> 00:18:11,280 Speaker 1: barrel lot, we're really lodged here for some time. Are 334 00:18:11,280 --> 00:18:15,399 Speaker 1: there any other companies out there you see his potential targets? Uh, 335 00:18:15,440 --> 00:18:18,919 Speaker 1: there are certainly companies that will look to merge. Whether 336 00:18:18,920 --> 00:18:22,159 Speaker 1: they are the targets or they are the consolidators, it 337 00:18:22,240 --> 00:18:24,520 Speaker 1: remains to be seen. Because you could see high quality 338 00:18:24,600 --> 00:18:27,320 Speaker 1: names like an E O G and Pioneer or Diamond 339 00:18:27,320 --> 00:18:32,399 Speaker 1: Back Parsley Energy look to merge together with small or 340 00:18:32,440 --> 00:18:36,280 Speaker 1: no premiums to reduce costs and improved locations. So interesting. 341 00:18:36,320 --> 00:18:37,760 Speaker 1: All right, now we're gonna have to leave it there, 342 00:18:37,840 --> 00:18:39,679 Speaker 1: but we're gonna have some more deal activity from you. 343 00:18:39,760 --> 00:18:43,399 Speaker 1: I am sure. This is Bloomberg Business Week with Carol 344 00:18:43,400 --> 00:18:47,960 Speaker 1: Messer from Bloomberg Radio. Fascinating story in the magazine here, 345 00:18:48,440 --> 00:18:51,280 Speaker 1: Uh coming up. It's um. You know, just as we thought, 346 00:18:51,280 --> 00:18:53,159 Speaker 1: you're getting back to a little bit of normal in 347 00:18:53,280 --> 00:18:56,240 Speaker 1: terms of the restaurants and going out to eat cases, 348 00:18:56,280 --> 00:19:00,480 Speaker 1: particularly in Europe, surging putting the restaurant industry on its 349 00:19:00,520 --> 00:19:04,320 Speaker 1: back foot again. Joel Webert joins us. He's editor Bloomberg 350 00:19:04,320 --> 00:19:06,879 Speaker 1: business Week. He joins us from the remote line from Brooklyn. 351 00:19:07,119 --> 00:19:09,920 Speaker 1: And Robert Vines, chief food critic for Bloomberg News, he 352 00:19:10,080 --> 00:19:12,919 Speaker 1: joins us on the phone from London. So, Joel, just 353 00:19:12,960 --> 00:19:15,679 Speaker 1: when the you know that our friends over in Europe, 354 00:19:15,720 --> 00:19:18,879 Speaker 1: I'm seeing stories in Paris and London and other cities 355 00:19:18,880 --> 00:19:21,040 Speaker 1: in Italy as well, just trying to get on their 356 00:19:21,080 --> 00:19:23,480 Speaker 1: feet again. Then the infections go back up. It's not 357 00:19:23,520 --> 00:19:27,320 Speaker 1: good for their business, is it. It's a story UM everywhere, 358 00:19:27,359 --> 00:19:29,280 Speaker 1: you know, and it's like just when you think you're 359 00:19:29,320 --> 00:19:32,840 Speaker 1: like rounding a corner, Uh, you know, cases sneak back 360 00:19:32,920 --> 00:19:36,880 Speaker 1: up and or surge. And you know, restaurants in particular 361 00:19:36,920 --> 00:19:38,560 Speaker 1: are the ones that have been you know, they were 362 00:19:39,040 --> 00:19:41,960 Speaker 1: really been just like on the front lines of this UM. 363 00:19:42,080 --> 00:19:45,680 Speaker 1: And you know, Richard Vines is the one who who 364 00:19:45,680 --> 00:19:48,880 Speaker 1: came to us from UM London to say, let's let's 365 00:19:48,880 --> 00:19:51,439 Speaker 1: talk about restaurants here. So so Richard give us a 366 00:19:51,520 --> 00:19:53,760 Speaker 1: sneak peak of kind of what's been happening in the 367 00:19:53,920 --> 00:19:57,800 Speaker 1: UK and and London as uh, infections go up and 368 00:19:57,800 --> 00:20:02,320 Speaker 1: and restaurants are are caught in the in in the vice. Yes, 369 00:20:02,359 --> 00:20:04,359 Speaker 1: good evenings for none and well death has doubled in 370 00:20:04,400 --> 00:20:07,159 Speaker 1: the UK in the past twelve days, so obviously the 371 00:20:07,160 --> 00:20:10,880 Speaker 1: government's filely concerned. The last month he introduced the ten 372 00:20:10,960 --> 00:20:14,439 Speaker 1: pm closing time for restaurants. It's quite serious. It's imagining 373 00:20:14,760 --> 00:20:17,320 Speaker 1: sense want to eat and drink and ten o'quarck have 374 00:20:17,400 --> 00:20:19,480 Speaker 1: to be out on the streets and that's been bad enough, 375 00:20:19,760 --> 00:20:21,920 Speaker 1: but now they just need to use further instrictions. You 376 00:20:22,040 --> 00:20:26,200 Speaker 1: can't eat at restaurants with people who not in your 377 00:20:26,240 --> 00:20:29,840 Speaker 1: household or in your group. So I'm single, for example, beings, 378 00:20:29,840 --> 00:20:33,919 Speaker 1: basically I can't go to restaurants, so quite a serious situation. 379 00:20:34,480 --> 00:20:39,439 Speaker 1: Just I'm myself at home because where am I going 380 00:20:39,480 --> 00:20:40,720 Speaker 1: to go? I'm not going down to the pub on 381 00:20:40,800 --> 00:20:43,320 Speaker 1: my own. So Richard, I get the sense that last 382 00:20:43,320 --> 00:20:46,520 Speaker 1: time around the subsidies really helped these restaurants, but obviously 383 00:20:46,640 --> 00:20:50,359 Speaker 1: subsidies can't be too helpful if there are curfews in play, 384 00:20:50,680 --> 00:20:52,800 Speaker 1: or if you just can't go out and eat at 385 00:20:52,840 --> 00:20:55,520 Speaker 1: a restaurant, or there are higher restrictions when you speak 386 00:20:55,560 --> 00:20:58,639 Speaker 1: with restaurateurs with restaurant owners, especially those that are more 387 00:20:58,680 --> 00:21:02,040 Speaker 1: so local and mom and pop owned. What's their tone 388 00:21:02,080 --> 00:21:04,879 Speaker 1: like right now? What's the feel? The tone is of 389 00:21:05,040 --> 00:21:08,600 Speaker 1: total desolation and depression. I'm afraid Corbyn and King which 390 00:21:08,640 --> 00:21:10,400 Speaker 1: one of the big restaurant groups in London. They own 391 00:21:10,400 --> 00:21:12,960 Speaker 1: a place called the wolves Ley which is known internationally. 392 00:21:13,240 --> 00:21:15,800 Speaker 1: When the latest restrictions came in, they had two thousand 393 00:21:15,840 --> 00:21:19,560 Speaker 1: cancelations in twenty four hours. And the British government has 394 00:21:19,600 --> 00:21:23,560 Speaker 1: actually even very help and supportives to restaurants or to 395 00:21:23,640 --> 00:21:27,280 Speaker 1: businesses in general, paying for wage for SAPO further and 396 00:21:27,320 --> 00:21:31,000 Speaker 1: so on. But those that subsidies easing down now and 397 00:21:31,040 --> 00:21:33,639 Speaker 1: it looks like restrictions are coming back on more seriously. 398 00:21:34,240 --> 00:21:39,480 Speaker 1: Whales just that it's on Friday's introducing total lockdown. Scotland 399 00:21:39,560 --> 00:21:42,880 Speaker 1: introduced match strict measures and London, as I say, has 400 00:21:42,880 --> 00:21:45,240 Speaker 1: come in the strict to measures. So I'd say the 401 00:21:45,280 --> 00:21:49,240 Speaker 1: movie is quite depressed. And a group of restaurants, chefs 402 00:21:49,240 --> 00:21:52,800 Speaker 1: and restaurants were demonstrating outside Parliament's day banging their pots 403 00:21:52,800 --> 00:21:55,280 Speaker 1: and pans. But I don't think anyone really thinks that's 404 00:21:55,280 --> 00:21:59,960 Speaker 1: going to help. And Richard, what about the pub scene 405 00:22:00,000 --> 00:22:02,760 Speaker 1: which has been. You know, it's obviously like a staple 406 00:22:02,840 --> 00:22:08,160 Speaker 1: of English life in a way that that Americans envy 407 00:22:08,240 --> 00:22:12,000 Speaker 1: and probably normal times. Um, what's what's that seem like? 408 00:22:12,240 --> 00:22:14,720 Speaker 1: Now that um, you know the restaurants are are closed, 409 00:22:14,720 --> 00:22:17,920 Speaker 1: what's the pub situation? Well, the pep situation is very 410 00:22:17,920 --> 00:22:20,360 Speaker 1: bad because perhaps usually can stay open late. And now 411 00:22:20,400 --> 00:22:25,080 Speaker 1: that again the ten first first ten o'clock closing is depressing. 412 00:22:25,640 --> 00:22:28,000 Speaker 1: The thing is in U K's you can stand out 413 00:22:28,000 --> 00:22:30,120 Speaker 1: and drink on the street, which you can't to New York. Right, 414 00:22:30,280 --> 00:22:33,520 Speaker 1: so that's something super go outside, whether drinks still have 415 00:22:33,560 --> 00:22:36,840 Speaker 1: a good time, but generally businesses down seriously and pups 416 00:22:36,880 --> 00:22:40,480 Speaker 1: of closing all the time. Alright, So Richard, give us 417 00:22:40,560 --> 00:22:43,679 Speaker 1: a sense as to the um the density issue, like 418 00:22:43,720 --> 00:22:48,480 Speaker 1: in art can can a restaurant be open and seed acent? 419 00:22:48,600 --> 00:22:52,080 Speaker 1: Or is it because it's we have some limitations here 420 00:22:52,080 --> 00:22:56,359 Speaker 1: in the States, Yeah, people, they are a limitation. It 421 00:22:56,480 --> 00:22:58,360 Speaker 1: depends on the place and so. But the main thing 422 00:22:58,440 --> 00:23:03,000 Speaker 1: is the distancing between in the UK's distancing between different tables. 423 00:23:03,040 --> 00:23:07,000 Speaker 1: So in in Copenhagen, for example, it's another since you've 424 00:23:07,000 --> 00:23:10,040 Speaker 1: been looking at they've got maximum people fifty in the 425 00:23:10,080 --> 00:23:13,760 Speaker 1: restaurant here, it's more requestioning distancing between tables, which means 426 00:23:13,760 --> 00:23:18,160 Speaker 1: places can't generally can't operate much beyond sixty seven cent 427 00:23:18,240 --> 00:23:21,280 Speaker 1: of capacity, which you know, when people are spending this 428 00:23:22,040 --> 00:23:24,600 Speaker 1: and then just a fewer customers and then going home. Eva, 429 00:23:24,640 --> 00:23:28,800 Speaker 1: of course the numbers don't really add up. And Richard, 430 00:23:28,800 --> 00:23:31,760 Speaker 1: what about delivery since that's become such you know, like 431 00:23:31,960 --> 00:23:34,600 Speaker 1: at least here in the US, restaurants have just gone 432 00:23:34,600 --> 00:23:37,119 Speaker 1: all in on it. It is, or take out for 433 00:23:37,160 --> 00:23:39,879 Speaker 1: that matter, it's just sort of the new the new normal. 434 00:23:40,200 --> 00:23:44,520 Speaker 1: Um howur is how our restaurants managing to pivot? And 435 00:23:44,680 --> 00:23:47,320 Speaker 1: is it a permanent shift or or have they found 436 00:23:47,320 --> 00:23:50,360 Speaker 1: their footing in a in a short term kind of way. 437 00:23:50,960 --> 00:23:53,119 Speaker 1: I think it's a permanent shift. It's really surprising some 438 00:23:53,160 --> 00:23:55,840 Speaker 1: of the restaurants that are doing it. Daniel Hamm, the 439 00:23:55,960 --> 00:24:00,920 Speaker 1: chef Madson Park, is doing home delivery from Marriages Hotel 440 00:24:00,960 --> 00:24:03,440 Speaker 1: in month, which is something that would have been completely 441 00:24:03,520 --> 00:24:07,640 Speaker 1: unthinkable before the virus, right down to Maple Japanese restaurants. 442 00:24:07,640 --> 00:24:09,600 Speaker 1: So I've been hearing of one. He said they were 443 00:24:09,600 --> 00:24:12,400 Speaker 1: a bit precious about their food, wasn't super put home delivery. 444 00:24:12,440 --> 00:24:14,680 Speaker 1: But now everyone's got to do it because people are 445 00:24:14,720 --> 00:24:17,280 Speaker 1: eating at home, and this is restaurants have to get 446 00:24:17,320 --> 00:24:19,640 Speaker 1: all the business they can. I think this is going 447 00:24:19,680 --> 00:24:21,840 Speaker 1: to be a partnershift, but certainly in the short term 448 00:24:21,880 --> 00:24:25,199 Speaker 1: it's a very extreme shift. It really is amazing to 449 00:24:25,240 --> 00:24:27,439 Speaker 1: see how some of these restaurants have reacted. I know 450 00:24:27,480 --> 00:24:30,199 Speaker 1: in New York City, just seeing the dining on the sidewalks, 451 00:24:30,200 --> 00:24:33,040 Speaker 1: which is more so relevant in Europe in normal times. 452 00:24:33,040 --> 00:24:35,119 Speaker 1: But it's just amazing to watch. But I want to 453 00:24:35,119 --> 00:24:38,480 Speaker 1: get your sense if these restrictions last or if they 454 00:24:38,480 --> 00:24:40,879 Speaker 1: get worse over in Europe, do you have any sense 455 00:24:40,960 --> 00:24:44,560 Speaker 1: of how long the average restaurant can last they can 456 00:24:44,600 --> 00:24:48,560 Speaker 1: wait this out. I think a lot of restaurants will 457 00:24:48,640 --> 00:24:50,960 Speaker 1: announced closure in the next month or two. Actually, I 458 00:24:51,040 --> 00:24:53,520 Speaker 1: think it's it's going to be a fairly short term thing. 459 00:24:53,880 --> 00:24:57,880 Speaker 1: Restaurants in the UK had a holiday on their their 460 00:24:57,920 --> 00:25:01,480 Speaker 1: rents during a lot down this on. Those bills are 461 00:25:01,600 --> 00:25:04,200 Speaker 1: coming to you now, so rests are trying to operate 462 00:25:04,240 --> 00:25:08,439 Speaker 1: with bow reduced income, new reserves and then facing huge bills. 463 00:25:09,440 --> 00:25:13,000 Speaker 1: So I'm personally very pessimistic restroom past to say, even 464 00:25:13,000 --> 00:25:16,560 Speaker 1: though I want everyone to do well, I think only 465 00:25:16,600 --> 00:25:19,159 Speaker 1: the very best sort of people. The biggest pockets are 466 00:25:19,200 --> 00:25:22,679 Speaker 1: going to survive deepest pockets Richard Vines, thank you so 467 00:25:22,720 --> 00:25:25,040 Speaker 1: much for joining us. Just a fascinating piece there and uh, 468 00:25:25,160 --> 00:25:26,639 Speaker 1: you know our Hearts Guide. We really feel for the 469 00:25:26,640 --> 00:25:30,240 Speaker 1: folks uh in Europe that are experiencing this surge and 470 00:25:30,280 --> 00:25:33,080 Speaker 1: how it's impact in their lives, including on the restaurant business. 471 00:25:33,160 --> 00:25:35,919 Speaker 1: Richard Vines, chief food critic for Bloomberg News, joining us 472 00:25:35,960 --> 00:25:38,600 Speaker 1: on the phone from London, and of course Joel Webber, 473 00:25:38,920 --> 00:25:41,960 Speaker 1: editor of Bloomberg Business Week on the remote access line 474 00:25:41,960 --> 00:25:45,439 Speaker 1: from Brooklyn, thank you so much for joining us. And Sarah, 475 00:25:45,440 --> 00:25:47,720 Speaker 1: that's a big issues we head into these colder months. 476 00:25:47,720 --> 00:25:49,119 Speaker 1: You know, I'm not sure, I mean people canna be 477 00:25:49,119 --> 00:25:52,520 Speaker 1: standing outside the pub. Um, So it's really important for 478 00:25:52,600 --> 00:25:55,960 Speaker 1: these businesses to try to get you know, some to 479 00:25:56,480 --> 00:25:58,480 Speaker 1: kind of continue their business but in a safe way. 480 00:25:58,680 --> 00:26:01,600 Speaker 1: Right It's a very big question, Mark one, what your 481 00:26:01,600 --> 00:26:04,640 Speaker 1: restrictions look like. Also just the weather itself. As you said, 482 00:26:04,680 --> 00:26:07,160 Speaker 1: I think about dining in the city right now, these 483 00:26:07,200 --> 00:26:10,440 Speaker 1: restaurants are doing absolutely everything they can and people seem 484 00:26:10,480 --> 00:26:12,880 Speaker 1: to be grasping onto it and enjoying it. But if 485 00:26:12,880 --> 00:26:15,640 Speaker 1: it is sub forty degrees outside and you have a heater. 486 00:26:15,880 --> 00:26:18,600 Speaker 1: Sure Still, how willing are people going to be to 487 00:26:18,680 --> 00:26:22,120 Speaker 1: actually go venture outside in a coat and eat outside? Yeah? 488 00:26:22,119 --> 00:26:24,320 Speaker 1: Exactly right. And for starting to get to that point 489 00:26:24,359 --> 00:26:27,760 Speaker 1: in the year where the heaters are good? Um, but 490 00:26:28,880 --> 00:26:31,159 Speaker 1: are they enough here? And you know, when we're standing 491 00:26:31,160 --> 00:26:33,200 Speaker 1: out there and there's a ten inches so I don't 492 00:26:33,240 --> 00:26:34,879 Speaker 1: think we're gonna be sitting outside on the street, but 493 00:26:34,960 --> 00:26:39,800 Speaker 1: maybe some intrepid diners will see. You're listening to Bloomberg 494 00:26:39,840 --> 00:26:44,720 Speaker 1: Business Week with Carol Messer on Bloomberg Radio Hi and 495 00:26:44,760 --> 00:26:48,160 Speaker 1: Paul Sweeney alongside Sarah Panza. Carol will be back later 496 00:26:48,359 --> 00:26:51,879 Speaker 1: this hour. I mean, Sarah, it's really interesting here. First 497 00:26:52,119 --> 00:26:55,879 Speaker 1: Jack Ma brought us Ali Baba, the huge Amazon like 498 00:26:56,240 --> 00:26:59,200 Speaker 1: type of company. Uh. Now he brings us another company 499 00:26:59,240 --> 00:27:01,680 Speaker 1: called Aunt Financial. It is winding its way through the 500 00:27:01,720 --> 00:27:04,840 Speaker 1: regulatory process on its way to an initial public offering. 501 00:27:04,880 --> 00:27:07,840 Speaker 1: A lot of people don't know that much about Ant Financial, 502 00:27:08,080 --> 00:27:11,360 Speaker 1: but one person does is Andy Brown. He's editorial director 503 00:27:11,800 --> 00:27:14,320 Speaker 1: for Bloomberg's New Economy. He joins us on the phone 504 00:27:14,320 --> 00:27:16,600 Speaker 1: from New York City and he thinks, so much for 505 00:27:16,800 --> 00:27:19,199 Speaker 1: joining us here. It looks like this I PO might 506 00:27:19,240 --> 00:27:21,919 Speaker 1: happen relatively soon. What if you could just tell us 507 00:27:22,359 --> 00:27:26,600 Speaker 1: what is and financial and how big is this thing? 508 00:27:27,920 --> 00:27:33,840 Speaker 1: So and financial is huge? Um, you can think about 509 00:27:33,840 --> 00:27:36,960 Speaker 1: and financial as The Economist put it in its latest vision, 510 00:27:37,040 --> 00:27:41,280 Speaker 1: as a combination of Apple Pay, PayPal, Venmo, Mastica, JP 511 00:27:41,440 --> 00:27:45,600 Speaker 1: Morgan I shares with an insurance brokerage thrown in. So 512 00:27:48,720 --> 00:27:50,800 Speaker 1: it's it's it's it's really it's a blog and it's all, 513 00:27:50,880 --> 00:27:54,399 Speaker 1: by the way, in one single app. So and is 514 00:27:54,440 --> 00:27:57,080 Speaker 1: going public at the end of this month, and it's 515 00:27:57,080 --> 00:27:59,480 Speaker 1: going to be the biggest I p O in history, 516 00:27:59,560 --> 00:28:02,720 Speaker 1: way big of in Saudi Aramsa last year billion dollars 517 00:28:02,800 --> 00:28:05,440 Speaker 1: or more, which would value the company about two eight 518 00:28:06,000 --> 00:28:10,919 Speaker 1: billion dollars, bigger than any single US bank except JP Morgan. 519 00:28:11,720 --> 00:28:14,280 Speaker 1: So Andy, as you wrote recently, data wars are the 520 00:28:14,359 --> 00:28:18,639 Speaker 1: new trade wars clearly as you just described, and has 521 00:28:18,800 --> 00:28:24,119 Speaker 1: so much consumer information. Do we expect or already have 522 00:28:24,280 --> 00:28:26,960 Speaker 1: we seen the US administration want to go after the 523 00:28:27,000 --> 00:28:29,080 Speaker 1: likes of Aunt, just as we saw earlier this year, 524 00:28:29,080 --> 00:28:33,040 Speaker 1: which I think we can call it the TikTok saga. Yeah, 525 00:28:33,080 --> 00:28:36,760 Speaker 1: this is really a battle for the digital future of 526 00:28:36,880 --> 00:28:41,360 Speaker 1: the world. Chinese companies are scooping up massive amounts of 527 00:28:41,680 --> 00:28:45,000 Speaker 1: data personal data everywhere. So you think about this and 528 00:28:45,240 --> 00:28:48,960 Speaker 1: financial in China. Has it grew out of the payments 529 00:28:48,960 --> 00:28:53,680 Speaker 1: system Ali pay this you bihooitous payments app that has 530 00:28:53,760 --> 00:28:58,080 Speaker 1: seven hundred million or more Chinese uses, so basically and 531 00:28:58,320 --> 00:29:02,440 Speaker 1: knows everything about the spending habits of pretty much everybody 532 00:29:02,480 --> 00:29:05,360 Speaker 1: in China. And they're now doing these joint ventures with 533 00:29:05,560 --> 00:29:12,280 Speaker 1: companies around Asia, India, Thailand, Philippines, um sort of retrofitting 534 00:29:12,320 --> 00:29:15,520 Speaker 1: that buying into companies, retrofitting them with and technologies, and 535 00:29:15,560 --> 00:29:18,400 Speaker 1: so they have a lot of insight into into the 536 00:29:18,480 --> 00:29:21,920 Speaker 1: data of about a billion or more people now around 537 00:29:21,920 --> 00:29:25,120 Speaker 1: the world, and could easily double that number inside five years. 538 00:29:25,960 --> 00:29:29,960 Speaker 1: And what's the relationship between the US government and and 539 00:29:30,160 --> 00:29:31,800 Speaker 1: financial I mean, that's got to be a lot of 540 00:29:31,840 --> 00:29:35,680 Speaker 1: concern there. Yeah. So SO essentially has put into the 541 00:29:35,680 --> 00:29:39,600 Speaker 1: category of national security risk. So Royters has reported that 542 00:29:39,640 --> 00:29:44,080 Speaker 1: the US State Department under Mike Pompeo is trying its 543 00:29:44,080 --> 00:29:48,680 Speaker 1: best to derail this this listing UH and um SO. 544 00:29:49,000 --> 00:29:52,600 Speaker 1: It has proposed, according to Royter's that um and should 545 00:29:52,600 --> 00:29:56,480 Speaker 1: go onto a blacklist. This entities list have only some 546 00:29:56,640 --> 00:29:59,400 Speaker 1: it would have only symbolic importance. Is not like Huawei, 547 00:29:59,560 --> 00:30:04,520 Speaker 1: which is rarely dependent completely dependent actually on US technology 548 00:30:04,560 --> 00:30:07,200 Speaker 1: in this case on and it would be largely symbolic. 549 00:30:07,400 --> 00:30:10,120 Speaker 1: But it would make the listing. Would it would definitely 550 00:30:10,320 --> 00:30:13,400 Speaker 1: complicate this listing. It would put a cloud of uncertainty 551 00:30:13,400 --> 00:30:16,400 Speaker 1: around its global expansion. Don't forget, the US is not 552 00:30:16,520 --> 00:30:19,800 Speaker 1: the holy country in the world that's worried about China 553 00:30:19,880 --> 00:30:23,360 Speaker 1: getting control over data. Europe has concerned. India, by the way, 554 00:30:23,440 --> 00:30:26,959 Speaker 1: also banned TikTok uh not just the US, and as 555 00:30:27,000 --> 00:30:29,400 Speaker 1: I said earlier, this really is a race for digital 556 00:30:29,440 --> 00:30:33,200 Speaker 1: dominance around the world. I wonder though not even just 557 00:30:33,280 --> 00:30:37,360 Speaker 1: the US, as you said, but other countries, how much sway, 558 00:30:37,520 --> 00:30:40,440 Speaker 1: how much teeth do they actually have? I know Bloomberg 559 00:30:40,480 --> 00:30:44,600 Speaker 1: Opinion described the TikTok deal as a quote empty threat. 560 00:30:44,720 --> 00:30:48,040 Speaker 1: Once we saw it finally finished and through and President 561 00:30:48,040 --> 00:30:51,800 Speaker 1: Trump had approved it. How much can other companies or 562 00:30:51,800 --> 00:30:55,560 Speaker 1: other countries, I should say, actually do? I think? I 563 00:30:55,600 --> 00:30:58,880 Speaker 1: think it really does depend on on the company one 564 00:30:59,040 --> 00:31:03,479 Speaker 1: and number two, it depends on uh their level of 565 00:31:03,680 --> 00:31:08,320 Speaker 1: dependency on US technology UM. But also I think it's 566 00:31:08,360 --> 00:31:11,160 Speaker 1: a lot of it really depends on an overall assessment 567 00:31:11,320 --> 00:31:15,800 Speaker 1: of Chinese risk. The problem that the private sector in 568 00:31:15,960 --> 00:31:20,640 Speaker 1: China face is that they are seen as essentially um 569 00:31:20,800 --> 00:31:24,479 Speaker 1: handmaidens of, or in throll to the Chinese state. I mean, 570 00:31:24,520 --> 00:31:28,160 Speaker 1: private companies have an explicit mandate to serve the state. 571 00:31:28,680 --> 00:31:33,000 Speaker 1: That's fine domestically insofar as it gives access to privileged capital, 572 00:31:33,080 --> 00:31:36,320 Speaker 1: to protected markets. When they go overseas, they're they're they're 573 00:31:36,360 --> 00:31:38,680 Speaker 1: trusted about as much as the they're as good as 574 00:31:38,720 --> 00:31:41,280 Speaker 1: the Chinese state. And as we've seen from PW serve 575 00:31:41,360 --> 00:31:44,760 Speaker 1: As just in the last week, levels of trust around 576 00:31:44,800 --> 00:31:50,840 Speaker 1: the world towards China plunging. So andy, what I mean 577 00:31:50,880 --> 00:31:52,720 Speaker 1: this this could be a big issue because I know 578 00:31:52,760 --> 00:31:56,480 Speaker 1: aunts big and obviously China looking at India. What are 579 00:31:56,520 --> 00:32:01,320 Speaker 1: the US plans strategy given TikTok, given everything that's going on. Yeah, 580 00:32:01,360 --> 00:32:03,520 Speaker 1: well see, so this is this is a big difference 581 00:32:03,720 --> 00:32:08,760 Speaker 1: where you have TikTok, which really took the US by storm. 582 00:32:08,800 --> 00:32:12,520 Speaker 1: I mean it's tens of millions of active users, and 583 00:32:12,680 --> 00:32:16,560 Speaker 1: financial actually has almost no business in the US unless 584 00:32:16,600 --> 00:32:19,040 Speaker 1: you count Chinese travelers that are coming over to the 585 00:32:19,120 --> 00:32:24,040 Speaker 1: US and and using and UH to access financial services 586 00:32:24,840 --> 00:32:27,600 Speaker 1: back home. So you know, they made a big play 587 00:32:27,640 --> 00:32:29,680 Speaker 1: in two thousand and eighteen to get to the Chinese market. 588 00:32:29,680 --> 00:32:33,520 Speaker 1: They wanted to buy money Gram and Syphius. The agency 589 00:32:33,680 --> 00:32:38,240 Speaker 1: that you know, UH that's foreign acquisitions in the US 590 00:32:38,360 --> 00:32:40,800 Speaker 1: turned that down. So that was a big US play 591 00:32:40,880 --> 00:32:43,600 Speaker 1: which was completely derailed by the by by by the 592 00:32:43,680 --> 00:32:47,239 Speaker 1: US government. Andy Brown, thank you so much for joining us. 593 00:32:47,240 --> 00:32:50,360 Speaker 1: We appreciate it. Andy Brown, he's the editorial director for 594 00:32:50,480 --> 00:32:52,560 Speaker 1: Bloomberg New Economy, joining us on the phone from New 595 00:32:52,600 --> 00:32:55,000 Speaker 1: York City. And Sarah, this is gonna be interesting. This 596 00:32:55,080 --> 00:32:58,200 Speaker 1: is gonna be as Andy was just reporting, is going 597 00:32:58,240 --> 00:33:03,000 Speaker 1: to be potentially the big is IPO on record? Um 598 00:33:03,040 --> 00:33:05,960 Speaker 1: and this company is just extraordinary. You know it was 599 00:33:06,040 --> 00:33:08,840 Speaker 1: once a part of Ali Baba. Just to give you 600 00:33:08,840 --> 00:33:11,320 Speaker 1: a sense of just how big Ali Baba was before 601 00:33:11,320 --> 00:33:14,120 Speaker 1: they spun this and financial off right, and Ali Baba 602 00:33:14,160 --> 00:33:17,360 Speaker 1: does still own a third of and after spinning it out. 603 00:33:17,640 --> 00:33:19,840 Speaker 1: But like you said, we think about the hype that 604 00:33:19,920 --> 00:33:23,280 Speaker 1: was really surrounding Saudio Rampco when we saw that IPO. 605 00:33:23,560 --> 00:33:28,000 Speaker 1: Imagine once this does go public, how much attention this 606 00:33:28,040 --> 00:33:30,560 Speaker 1: is going to get across financial markets. Not just in 607 00:33:30,600 --> 00:33:33,440 Speaker 1: Hong Kong. Yeah, and it's gonna be interesting the again, 608 00:33:33,480 --> 00:33:36,320 Speaker 1: as we're talking to Andy Brown about this, the relationship, 609 00:33:36,400 --> 00:33:39,560 Speaker 1: the trade relationship, the tensions between China and the US. 610 00:33:39,880 --> 00:33:42,360 Speaker 1: UH it played out we saw play out in TikTok 611 00:33:42,440 --> 00:33:45,360 Speaker 1: on that racial where we ended up there. But this 612 00:33:45,440 --> 00:33:49,400 Speaker 1: is a company that is even more strategic from both 613 00:33:49,440 --> 00:33:51,840 Speaker 1: Chinese perspective and perhaps from the US perspective that might 614 00:33:51,960 --> 00:33:57,760 Speaker 1: warrant UH some you know, closer um oversight by regulators 615 00:33:57,760 --> 00:34:04,719 Speaker 1: around the world. We have to see my coel journal now. 616 00:34:04,800 --> 00:34:07,360 Speaker 1: But you let me drive. No, no, no, he's going 617 00:34:07,440 --> 00:34:12,200 Speaker 1: to drug home. Please, I'll do the riding drivel lets me. 618 00:34:12,560 --> 00:34:28,040 Speaker 1: I want to drive, Just drive, baby, question trying. This 619 00:34:28,480 --> 00:34:31,719 Speaker 1: is the drive to the globe, Timmu. Thanks, we'll drying 620 00:34:31,840 --> 00:34:35,200 Speaker 1: us down on Bloomberg Radio. All right, So I just 621 00:34:35,239 --> 00:34:38,920 Speaker 1: got about eleven minutes Paul Sweeney left in today's trading session, 622 00:34:39,320 --> 00:34:41,520 Speaker 1: and I feel like almost from the get go, it's 623 00:34:41,600 --> 00:34:46,399 Speaker 1: just been like a rock slowly falling right going down 624 00:34:46,400 --> 00:34:49,160 Speaker 1: the hill. We're just off our lows, but nonetheless we're 625 00:34:49,160 --> 00:34:51,239 Speaker 1: pretty much near it down about one and a half 626 00:34:51,239 --> 00:34:53,360 Speaker 1: percent about the SMP and Nastack down about one in 627 00:34:53,360 --> 00:34:56,920 Speaker 1: a third percent on the Dow Jones Industrial average. Let's 628 00:34:56,920 --> 00:35:00,040 Speaker 1: bring in Michael Cougino. He is president and part the 629 00:35:00,239 --> 00:35:04,000 Speaker 1: manager at the Permanent Portfolio family of funds approximately two 630 00:35:04,000 --> 00:35:07,439 Speaker 1: point two billion in assets under management, and he joins 631 00:35:07,520 --> 00:35:10,319 Speaker 1: us on the phone from San Francisco. Michael, it's good 632 00:35:10,360 --> 00:35:13,799 Speaker 1: to have you back with us. How are you not bad? Carl? 633 00:35:13,840 --> 00:35:15,360 Speaker 1: How are you How are you doing? It's been a 634 00:35:15,360 --> 00:35:17,799 Speaker 1: while in person, so it's great to be on. I 635 00:35:17,840 --> 00:35:21,040 Speaker 1: had a thought listening to the montage on driving songs 636 00:35:21,120 --> 00:35:24,280 Speaker 1: before this segment started. You guys gotta add Gary Newman 637 00:35:24,400 --> 00:35:28,680 Speaker 1: here in my car. I will let early eighties my 638 00:35:28,880 --> 00:35:32,360 Speaker 1: age demographic. I will definitely let our producer Paul Brennan 639 00:35:32,360 --> 00:35:35,120 Speaker 1: know that. Um, you guys are doing well. You're a 640 00:35:35,120 --> 00:35:38,680 Speaker 1: Permanent Portfolio fund in the nine percentile for funds in 641 00:35:38,719 --> 00:35:41,160 Speaker 1: this category of the past five years, and you're up 642 00:35:41,520 --> 00:35:44,719 Speaker 1: I guess around seven percent on average annually in each 643 00:35:44,719 --> 00:35:47,960 Speaker 1: of the past five years. What's working right now in 644 00:35:47,960 --> 00:35:50,800 Speaker 1: this environment? I mean, we know big tech has worked 645 00:35:50,840 --> 00:35:54,040 Speaker 1: really well, those fang stocks. What are you finding is 646 00:35:54,080 --> 00:35:57,600 Speaker 1: working well for you guys? Well? Broadly speaking, we tend 647 00:35:57,640 --> 00:36:00,160 Speaker 1: to do better when markets are mixed an environment US 648 00:36:00,160 --> 00:36:02,400 Speaker 1: are mixed, and you know, the last couple of years 649 00:36:02,440 --> 00:36:04,840 Speaker 1: it's begun to be a more mixed picture than maybe 650 00:36:05,040 --> 00:36:07,000 Speaker 1: the better part of the last ten years, which was 651 00:36:07,120 --> 00:36:09,040 Speaker 1: you know, by S and P five hundred and by 652 00:36:09,120 --> 00:36:12,480 Speaker 1: long bond funds and buying index and you did great, UM, 653 00:36:12,880 --> 00:36:14,919 Speaker 1: and so you know, I think the next ten years 654 00:36:14,920 --> 00:36:16,840 Speaker 1: are probably gonna look different. And as a result, I 655 00:36:16,840 --> 00:36:19,320 Speaker 1: think the markets have started to reflect that. What's worked 656 00:36:19,360 --> 00:36:22,200 Speaker 1: for US so far this year has been i would 657 00:36:22,239 --> 00:36:25,239 Speaker 1: say the growth stocks UM, you know, have come back 658 00:36:25,360 --> 00:36:28,200 Speaker 1: very strongly in a variety of industries. For US. We 659 00:36:28,200 --> 00:36:31,240 Speaker 1: were buyers UM in February and March. We were also 660 00:36:31,280 --> 00:36:34,279 Speaker 1: buyers recently in September, although not as great. We were 661 00:36:34,360 --> 00:36:36,400 Speaker 1: nibbling in a lot of areas that we felt cut 662 00:36:36,520 --> 00:36:39,200 Speaker 1: over sold and in the in the sell off as 663 00:36:39,239 --> 00:36:42,320 Speaker 1: well as some you know, structurally sell off the areas 664 00:36:42,360 --> 00:36:45,600 Speaker 1: like energy and materials and and some of the cyclical 665 00:36:45,680 --> 00:36:48,879 Speaker 1: growth that that really is has lagged. UM. We'll also 666 00:36:48,920 --> 00:36:52,120 Speaker 1: continue to hold some of our tech UM, and so 667 00:36:52,280 --> 00:36:54,920 Speaker 1: that's worked well. I mean natural resources of you know, 668 00:36:55,080 --> 00:36:57,520 Speaker 1: the begun to show some improvement, but they have a 669 00:36:57,560 --> 00:37:00,480 Speaker 1: long way to go reats. You know, similar all the 670 00:37:00,520 --> 00:37:02,799 Speaker 1: issues on the economy coming out of COVID and what's 671 00:37:02,800 --> 00:37:06,080 Speaker 1: going to happen with UH entities that own assets that 672 00:37:06,120 --> 00:37:09,360 Speaker 1: need to rent space, whether it's residential or industrial, or 673 00:37:09,440 --> 00:37:13,480 Speaker 1: office or retail. UM and bonds have been a slight 674 00:37:13,560 --> 00:37:16,719 Speaker 1: contributor for us UM. We've been you know, low duration, 675 00:37:16,840 --> 00:37:20,480 Speaker 1: high quality. We've found some opportunities in the short term 676 00:37:20,520 --> 00:37:23,920 Speaker 1: investment grade credit markets, so we've also gotten some contribution 677 00:37:24,000 --> 00:37:26,880 Speaker 1: from bonds there. Hey, Michael, how about on the precious 678 00:37:26,880 --> 00:37:29,759 Speaker 1: metal side, gold silver, I'm looking at gold here back 679 00:37:29,840 --> 00:37:32,879 Speaker 1: up above nine announced. How are you doing that right now? 680 00:37:33,080 --> 00:37:35,520 Speaker 1: You guys like gold? Michael? Right, yeah, you know what 681 00:37:35,640 --> 00:37:37,720 Speaker 1: and I and I got I get into the stocks 682 00:37:37,719 --> 00:37:39,960 Speaker 1: and bonds and didn't you know, neglected to mention the 683 00:37:39,960 --> 00:37:43,680 Speaker 1: precious metals. The number one holding is that the number 684 00:37:43,680 --> 00:37:46,960 Speaker 1: one holding in your fund gold gold is yes. So 685 00:37:47,239 --> 00:37:50,120 Speaker 1: you know, I I mentioned industrial medals and and and 686 00:37:50,120 --> 00:37:53,520 Speaker 1: and materials. But you know, the alternative currency side of things, 687 00:37:53,560 --> 00:37:56,319 Speaker 1: the gold and silver of obviously worked for us UM. 688 00:37:56,400 --> 00:37:58,200 Speaker 1: And I think there's a variety of reasons for that. 689 00:37:58,239 --> 00:38:00,960 Speaker 1: I mean, you have negative really just rates across the 690 00:38:00,960 --> 00:38:03,919 Speaker 1: curve starting with the third year and end and um 691 00:38:04,080 --> 00:38:06,839 Speaker 1: and even worse globally. So that's us, and they look 692 00:38:06,880 --> 00:38:09,280 Speaker 1: even worse when you look at you know, rates around 693 00:38:09,320 --> 00:38:12,560 Speaker 1: the world. You have the uncertain environment with respect to COVID, 694 00:38:12,880 --> 00:38:17,120 Speaker 1: you have the uncertain recovery, the duration, the length of 695 00:38:17,120 --> 00:38:20,600 Speaker 1: the strength, the employment pictures mixed. You've got a really 696 00:38:21,120 --> 00:38:23,320 Speaker 1: a lot of headline risk with respect to the election 697 00:38:23,440 --> 00:38:26,600 Speaker 1: right now, um, and then what comes after that and 698 00:38:26,680 --> 00:38:30,359 Speaker 1: so and and COVID really overrides it all given that 699 00:38:30,440 --> 00:38:33,040 Speaker 1: we've never been through this, we've never shut down the 700 00:38:33,080 --> 00:38:36,399 Speaker 1: country before and then tried to bring it back up. Um. 701 00:38:36,719 --> 00:38:39,280 Speaker 1: And it's uh, you know, it's gonna be two steps 702 00:38:39,280 --> 00:38:41,799 Speaker 1: forward one step back, which we're not surprised by. But 703 00:38:41,880 --> 00:38:45,000 Speaker 1: that's it. That is in fact what's transpired, and we 704 00:38:45,120 --> 00:38:48,640 Speaker 1: expect that to continue. Well, it should gain momentum given 705 00:38:48,680 --> 00:38:52,200 Speaker 1: pent up demands, slacking labor, slacking capital, I mean, all 706 00:38:52,239 --> 00:38:57,160 Speaker 1: those things argue for a continued momentum growing situation. When 707 00:38:57,160 --> 00:39:00,320 Speaker 1: we get a vaccine, when we get a viral, or 708 00:39:00,840 --> 00:39:03,120 Speaker 1: just if we get hurt immunity or something like that. 709 00:39:03,239 --> 00:39:05,120 Speaker 1: So you know, there is an end to all this, 710 00:39:05,400 --> 00:39:08,120 Speaker 1: and it's gonna be uncertain until we get there. Um. 711 00:39:08,200 --> 00:39:10,840 Speaker 1: And since we've never been through it before, I really 712 00:39:10,840 --> 00:39:14,560 Speaker 1: can't trust anybody's predictions about what's going to happen. And 713 00:39:14,800 --> 00:39:18,319 Speaker 1: that's a big risk factor. But it's a vaccine, right ultimately, 714 00:39:18,600 --> 00:39:21,880 Speaker 1: I mean, I don't think we expect her immunity to 715 00:39:21,880 --> 00:39:24,680 Speaker 1: to fix this, so it's stay safe until we get 716 00:39:24,719 --> 00:39:27,879 Speaker 1: a vaccine essentially, right, Well, that would be the one 717 00:39:27,920 --> 00:39:31,160 Speaker 1: with the most certainty, but again we're we're dealing with 718 00:39:31,200 --> 00:39:33,839 Speaker 1: a lot of unknowns here. And I know people are 719 00:39:33,880 --> 00:39:36,799 Speaker 1: like to say trust the science, but from my perspective, 720 00:39:36,880 --> 00:39:39,959 Speaker 1: science has been all over the place, um, and it's 721 00:39:39,960 --> 00:39:44,520 Speaker 1: probably been just as useful to use common sense, social distance, UM, 722 00:39:44,680 --> 00:39:47,919 Speaker 1: be smart about how you're interacting and where um, as 723 00:39:48,040 --> 00:39:50,279 Speaker 1: as pure reliance and any sort of science. I mean, 724 00:39:50,320 --> 00:39:53,959 Speaker 1: I've seen so many contradicting studies over the last seven months, 725 00:39:54,000 --> 00:39:56,240 Speaker 1: and it's it's hard to know what works today versus 726 00:39:56,239 --> 00:39:59,040 Speaker 1: a month ago. But I think when you use common 727 00:39:59,080 --> 00:40:02,400 Speaker 1: sense and social distance and use your head, um, you 728 00:40:02,719 --> 00:40:04,839 Speaker 1: can accomplish a lot. You're not gonna you're not gonna 729 00:40:04,840 --> 00:40:08,239 Speaker 1: eliminate the risk, but you can minimize it. And uh, 730 00:40:08,280 --> 00:40:11,680 Speaker 1: and I think the best way, you know it would 731 00:40:11,680 --> 00:40:13,840 Speaker 1: be a vaccine. The most certain way to sort of 732 00:40:14,040 --> 00:40:16,160 Speaker 1: snap your fingers and go would be a vaccine. It's 733 00:40:16,160 --> 00:40:18,239 Speaker 1: an amazing pot. We didn't talk election. How did we 734 00:40:18,280 --> 00:40:22,480 Speaker 1: not do that? Fifteen days? Right? Yeah? So Michael continue, 735 00:40:22,760 --> 00:40:25,400 Speaker 1: could you know, does it does it matter to you 736 00:40:25,480 --> 00:40:27,200 Speaker 1: who ends up in the White House. I'm not talking 737 00:40:27,200 --> 00:40:30,360 Speaker 1: about your political preferences, but in terms of the financial 738 00:40:30,400 --> 00:40:36,239 Speaker 1: markets understood, Um, the I think of the short term no, Um, 739 00:40:36,280 --> 00:40:39,320 Speaker 1: there's there's pent up demand and the economy. So regardless 740 00:40:39,360 --> 00:40:41,160 Speaker 1: of who wins in the short term, they're gonna look 741 00:40:41,200 --> 00:40:44,600 Speaker 1: like a hero. In terms of economic recovery, um and 742 00:40:44,800 --> 00:40:48,759 Speaker 1: both sides, uh, you know, appear to want stimulus at 743 00:40:48,800 --> 00:40:51,839 Speaker 1: some level, whether it's before the election or after. And 744 00:40:51,920 --> 00:40:55,120 Speaker 1: so from that standpoint, you have, you know, some alignment. 745 00:40:55,480 --> 00:40:58,320 Speaker 1: What happens is after that, once that's sugar high of 746 00:40:58,400 --> 00:41:01,440 Speaker 1: the initial recovery to pent up demand, all of that 747 00:41:01,440 --> 00:41:05,080 Speaker 1: stuff begins to subside, then you have very different policy 748 00:41:05,160 --> 00:41:10,400 Speaker 1: prescriptions that that really kind of coalesced around more government 749 00:41:10,480 --> 00:41:14,240 Speaker 1: spending um and and that's going to drive economic growth 750 00:41:14,920 --> 00:41:18,680 Speaker 1: on the Biden side, or more private sector spending, less regulation. 751 00:41:19,120 --> 00:41:20,920 Speaker 1: You know on the Trump side of things, and then 752 00:41:20,960 --> 00:41:23,919 Speaker 1: it gets into philosophical issues whether you you know which 753 00:41:24,000 --> 00:41:26,480 Speaker 1: one you believe is better long term, which one do 754 00:41:26,520 --> 00:41:28,040 Speaker 1: you believe is going to give you the better rate 755 00:41:28,080 --> 00:41:31,239 Speaker 1: to return? Um? And you know there's there's a lot 756 00:41:31,280 --> 00:41:34,520 Speaker 1: of evidence, you know, I smart people can construct cases 757 00:41:34,560 --> 00:41:36,480 Speaker 1: all over the map on that one. I think the 758 00:41:36,520 --> 00:41:40,359 Speaker 1: other factor, UM would be that how is Congress made up? 759 00:41:40,719 --> 00:41:43,440 Speaker 1: We tend to focus a lot on the presidency, um, 760 00:41:43,520 --> 00:41:46,480 Speaker 1: but the makeup of Congress, who owns which houses by 761 00:41:46,480 --> 00:41:49,239 Speaker 1: what majority is also going to be issue. Uh So 762 00:41:49,360 --> 00:41:53,279 Speaker 1: that matters. And I think investors generally have been so 763 00:41:53,400 --> 00:41:57,000 Speaker 1: wrapped up in in the personalities, the headline, risk, etcetera, 764 00:41:57,080 --> 00:41:59,400 Speaker 1: that I sense a lot of people haven't focused on 765 00:41:59,480 --> 00:42:02,839 Speaker 1: policy yet and that may come to that may need 766 00:42:02,960 --> 00:42:04,880 Speaker 1: need to be done or need to be better priceding 767 00:42:04,920 --> 00:42:07,560 Speaker 1: going forward. All right, Michael Gugino, thank you so much, 768 00:42:07,560 --> 00:42:10,600 Speaker 1: President portfolio manager at Permanent Portfolio family of funds. Say 769 00:42:10,600 --> 00:42:13,640 Speaker 1: that five times fast on the phone from San Francisco. 770 00:42:14,480 --> 00:42:17,000 Speaker 1: Thanks so much for listening to Bloomberg Business Week. Download 771 00:42:17,040 --> 00:42:20,239 Speaker 1: the podcast on iTunes, SoundCloud, or at Bloomberg dot com, 772 00:42:20,360 --> 00:42:22,399 Speaker 1: and be sure to check out our daily radio show 773 00:42:22,400 --> 00:42:25,080 Speaker 1: at two pm Eastern on Bloomberg Radio. And be sure 774 00:42:25,120 --> 00:42:28,160 Speaker 1: to watch us too on YouTube by searching Bloomberg Global 775 00:42:28,200 --> 00:42:28,520 Speaker 1: News