WEBVTT - Beta Testing Pfizer’s COVID-19 Vaccine 0:00:00.240 --> 0:00:03.280 This is Bloomberg Business Week. I'm Carol Masser. Every day 0:00:03.279 --> 0:00:05.200 we're bringing you the latest news from the world's of 0:00:05.200 --> 0:00:08.920 business and finance, plus technology, politics. So much going on 0:00:08.960 --> 0:00:12.160 in the world of politics, economics, and it's all harnessing 0:00:12.160 --> 0:00:14.960 the power of Business Week reporters and editors. You can 0:00:15.000 --> 0:00:18.720 download Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 0:00:19.040 --> 0:00:21.200 You can also listen to a radio show at two 0:00:21.200 --> 0:00:24.000 pm Eastern on Bloomberg Radio, and be sure to watch 0:00:24.040 --> 0:00:27.520 us too on YouTube by searching Bloomberg Global News. You 0:00:27.560 --> 0:00:31.200 know it's interesting here, uh, Sarah. I think the market 0:00:31.280 --> 0:00:35.400 is just really focusing on those the fiscal stimulus discussions, 0:00:35.400 --> 0:00:38.640 and again there is a deadline tomorrow. But I don't 0:00:38.640 --> 0:00:41.520 know what it's just the field doesn't look that great 0:00:41.640 --> 0:00:44.519 right here, even though the President is in fact pushing 0:00:44.520 --> 0:00:46.880 forward right you described as that it as on again, 0:00:46.960 --> 0:00:49.400 off again. We could probably add four more on agains 0:00:49.440 --> 0:00:52.839 and off against to that, but it looks like and 0:00:52.840 --> 0:00:55.040 I've gone on some emails from investors to set today 0:00:55.280 --> 0:00:58.040 saying that the packages that have presented still look to 0:00:58.080 --> 0:01:00.320 be a non starter between the Democat, demo Crats and 0:01:00.360 --> 0:01:03.040 Republicans and it's just looking a bit unlikely ahead of 0:01:03.040 --> 0:01:05.920 the election. All right, let's set the business week agenda here, 0:01:06.000 --> 0:01:07.520 let's kick it off. We can do that with Gina 0:01:07.560 --> 0:01:10.920 Martin Adams, chief equity strategist for Bloomberg Intelligence. He joined 0:01:11.000 --> 0:01:14.000 us on the phone from New Jersey, and Dave Wilson, 0:01:14.000 --> 0:01:17.880 of course, Bloomberg Stocks Editor UH, also on remote access 0:01:18.040 --> 0:01:20.360 from the great state of New Jersey. Gina, let's start 0:01:20.400 --> 0:01:23.120 with you here. You have a fascinating UH piece of 0:01:23.160 --> 0:01:27.160 research out talking about some of the underperformers and how 0:01:27.280 --> 0:01:31.640 this third quarter earning season maybe a catalyst. Yeah, I 0:01:31.640 --> 0:01:34.800 think it can be. U. First, good afternoon, everybody. Welcome 0:01:34.840 --> 0:01:37.160 to Monday, and a little bit of a slow Monday 0:01:37.200 --> 0:01:41.360 so far, but not happy Monday, Happy Monday. You know 0:01:41.680 --> 0:01:44.400 what we talked about today in our note is a 0:01:44.600 --> 0:01:47.680 basket of oversold stocks that we follow on a weekly basis. 0:01:47.720 --> 0:01:51.320 We rebalanced the most oversold stocks in the spire and 0:01:51.440 --> 0:01:55.320 any given week tend to dramatically outperform over a week's 0:01:55.400 --> 0:01:57.880 time as they bounce off at very very low levels. 0:01:57.920 --> 0:02:00.280 And what we've done in that note is highlighted that 0:02:00.320 --> 0:02:02.440 there are a few of those key oversold stocks that 0:02:02.480 --> 0:02:04.640 are due to report earnings this week, and they may 0:02:04.680 --> 0:02:07.000 have the opportunity to really change what has been a 0:02:07.080 --> 0:02:11.040 very sour tone um at least from the market response 0:02:11.080 --> 0:02:13.959 to earnings. So far, We've had tremendous reports out of 0:02:13.960 --> 0:02:18.360 the financial sector, really really strong beats, more than companies 0:02:18.360 --> 0:02:21.560 that have reported of beat expectations, and yet the price 0:02:21.600 --> 0:02:24.320 action in response to those expectations as the negative. So 0:02:24.360 --> 0:02:28.079 we're looking for these reporters to potentially change that tone. 0:02:28.639 --> 0:02:31.280 On our shortlist of Verizon A ten team Las Vegas 0:02:31.280 --> 0:02:34.760 fans to watch this week, Dave, let's bring you in 0:02:34.800 --> 0:02:36.920 here because in addition to the names that Gina just 0:02:37.040 --> 0:02:40.280 named for us, will also hear from Tesla this week. Netflix. Sure, 0:02:40.320 --> 0:02:42.280 it's been a sour tone, but we are entering the 0:02:42.360 --> 0:02:45.520 second largest week of earning season of the season. What 0:02:45.600 --> 0:02:47.920 are you keeping an eye on this week? Well, I mean, 0:02:48.080 --> 0:02:51.079 it's just a matter of how forthcoming our company is 0:02:51.120 --> 0:02:53.880 going to be when it comes to talking about their 0:02:53.919 --> 0:02:56.800 prospects for this quarter or next year. I mean, certainly 0:02:56.800 --> 0:02:59.799 one of the stories of is that the coronavirus let 0:02:59.800 --> 0:03:02.320 a lot of companies to which rather forecast. We've seen 0:03:02.400 --> 0:03:06.440 some of them come back. Others have been more reluctant 0:03:06.480 --> 0:03:11.560 to forecast even if, say their third quarter results are 0:03:11.840 --> 0:03:15.120 relatively positive. So you know that that's definitely going to 0:03:15.160 --> 0:03:18.640 be worth watching as we proceed through all these earnings 0:03:18.639 --> 0:03:22.000 reports do in the next couple of weeks. So, Gina, 0:03:22.280 --> 0:03:25.160 you mentioned the banks here. What was your takeaway from 0:03:25.160 --> 0:03:27.920 the banks here? It seems like the numbers were pretty good, 0:03:28.440 --> 0:03:31.880 but the outlook was perhaps a little bit more conservative. 0:03:32.000 --> 0:03:34.120 Are you do you expect to hear some of that 0:03:34.280 --> 0:03:37.280 going forward with some of these non bank companies. Yeah, 0:03:37.280 --> 0:03:39.600 I'm hopeful not, because I do think that that's what 0:03:39.720 --> 0:03:42.160 gotten the way of the banks is. You know, they 0:03:42.160 --> 0:03:45.000 did come out and dramatically beat expectations. At a matter 0:03:45.040 --> 0:03:48.280 of fact, at the start of earning season, financial sector 0:03:48.400 --> 0:03:51.560 was expected to produce earning and earnings drop of nearly 0:03:51.600 --> 0:03:54.040 five percent, and just because of the banks that reported 0:03:54.120 --> 0:03:56.720 last week, that earnings decline is now expected to be 0:03:56.800 --> 0:03:59.200 less than three percent, So they didn't make a very 0:03:59.280 --> 0:04:03.800 big ustment to expectations. All of the SMP five is 0:04:03.880 --> 0:04:06.720 virtually adjusting expectations higher for a third quarter. But that's 0:04:06.720 --> 0:04:08.920 where the buck stops, and that's the problem I think 0:04:08.920 --> 0:04:11.920 that the market is running into is analysts are not 0:04:12.000 --> 0:04:15.080 taking the cues from an incredible beating the second quarter 0:04:15.120 --> 0:04:17.320 and now it's looking like a very very strong beating 0:04:17.360 --> 0:04:20.480 the third quarter to raise expectations into the future. As 0:04:20.480 --> 0:04:22.080 a matter of fact, this is what we're writing about 0:04:22.120 --> 0:04:26.040 for tomorrow is expectations into future quarters have basically just 0:04:26.120 --> 0:04:30.080 been stagnant and have been for some time because analysts 0:04:30.120 --> 0:04:33.039 are not taking any sort of confidence boost out of 0:04:33.040 --> 0:04:37.640 these earnings results. Dave mentioned the guidance has been relatively limited. 0:04:38.240 --> 0:04:40.520 The guidance that we have gotten has been very strong, 0:04:40.680 --> 0:04:42.600 but it's just a handful of companies it's willing to 0:04:42.640 --> 0:04:44.200 tell us that it's very strong, and those are the 0:04:44.240 --> 0:04:46.840 companies that have been strong throughout for the most parts. 0:04:46.920 --> 0:04:50.120 So we need something to change. Um, we need a 0:04:50.120 --> 0:04:54.320 little bit more visibility to evolve. I think, Uh, if not, 0:04:54.480 --> 0:04:57.120 we're going to be sort of churning for a while 0:04:57.560 --> 0:05:01.839 waiting for that visibility to proven to one. I fear, 0:05:02.160 --> 0:05:03.960 do you know what are the underlying signals of the 0:05:04.000 --> 0:05:05.960 market really telling us? Though? At the moment, I look 0:05:05.960 --> 0:05:08.080 at the NASAC one hundred right now, down about one 0:05:08.120 --> 0:05:10.479 percent down for a fifth day that's the longest losing 0:05:10.480 --> 0:05:13.080 streaks since August. But at the same time we have 0:05:13.160 --> 0:05:15.840 to remember small caps the Russell two thousands up more 0:05:15.839 --> 0:05:18.039 than eight percent this month. We've also seen some other 0:05:18.080 --> 0:05:20.800 cyclical areas of the market performing well. Can you take 0:05:20.839 --> 0:05:23.560 that and run with it as a bullish signal. Yeah. 0:05:23.600 --> 0:05:25.640 We actually wrote about this in our chart book last 0:05:25.640 --> 0:05:28.520 Thursday that even though the market is churning, there are 0:05:28.600 --> 0:05:31.920 some really strong signals of rotation emerging in that churn. 0:05:31.960 --> 0:05:34.200 One of them is as you correctly identify the small 0:05:34.240 --> 0:05:38.600 cap index. We've also seen really key constituents of industrials 0:05:38.680 --> 0:05:44.600 and technology breakout are automated technical pattern recognition software recognized 0:05:44.640 --> 0:05:48.159 a breakout in Caterpillar as well as Micron last week, 0:05:48.720 --> 0:05:52.400 So those are pretty strong indications of a rotation. And 0:05:52.440 --> 0:05:54.680 then this has been our scene since late August is 0:05:55.200 --> 0:05:58.000 we think the market is going through a rotation, rotating 0:05:58.040 --> 0:06:02.400 to potentially stronger earnings growers in the year ahead as 0:06:02.400 --> 0:06:05.520 opposed to the defensive stories which has really dominated the 0:06:05.560 --> 0:06:09.920 markets games from the March lows. And that rotation can 0:06:10.000 --> 0:06:13.080 mean the market concern sideways for a while. But if 0:06:13.080 --> 0:06:17.000 we're rotating into supercyclicals, we're rotating into leading indicators or 0:06:17.080 --> 0:06:20.040 leading stocks, then it probably is a pretty good sign 0:06:20.120 --> 0:06:22.920 of things to come once we've reached the end of 0:06:22.920 --> 0:06:26.080 that charning process. Dave, real quick, what are you looking 0:06:26.120 --> 0:06:29.840 for earnings wise? What's the big one next up? IBM 0:06:29.960 --> 0:06:31.880 after the Clothes. That's gonna be the one to watch 0:06:32.480 --> 0:06:35.279 IBM after the closes. We're gonna ana Rona from Bloomberg Intelligence. 0:06:35.279 --> 0:06:37.040 He's gonna join us right after the Clothes to kind 0:06:37.040 --> 0:06:40.120 of give us his quick take of those numbers. Gina 0:06:40.160 --> 0:06:42.120 Martin Adams, thank you so much for joining us, Chief 0:06:42.160 --> 0:06:45.800 equity strategist Bloomberg Intelligence, joining us on the phone from 0:06:45.839 --> 0:06:49.760 New Jersey, and the Dave Wilson, Bloomberg Stocks Editor, also 0:06:49.880 --> 0:06:52.480 on remote from New Jersey. We've got New Jersey covered. Sarah. 0:06:52.520 --> 0:06:54.599 I'm in Jersey as well, but you are in the studio. 0:06:54.920 --> 0:06:57.320 I am in the studio. I must say that it's 0:06:57.320 --> 0:06:59.560 a little bit more lively in the office today, but 0:06:59.640 --> 0:07:02.240 still nothing like it used to be. Obviously, we miss 0:07:02.279 --> 0:07:04.479 you in here. That's right, we'll be Hopefully we'll get 0:07:04.520 --> 0:07:07.880 back there soon. This is Bloomberg Business Week with Carol 0:07:07.920 --> 0:07:11.000 Messer from Bloomberg Radio. We're really in the in that 0:07:11.160 --> 0:07:13.640 prime testing stage right now where there's a lot of 0:07:13.640 --> 0:07:17.080 tests going on around the world. Bloomberg News Adventure Capital 0:07:17.200 --> 0:07:21.160 reporter Ceremony Bride is actually taking part in one of 0:07:21.200 --> 0:07:23.720 those tests. Let's get a real sense of what we're 0:07:23.760 --> 0:07:27.240 looking at their Sarah, thanks so much for joining us. UM. 0:07:27.480 --> 0:07:30.600 Tell us about what you're doing and why you're doing 0:07:30.600 --> 0:07:34.880 it well. Um, at the beginning of the pandemic, I 0:07:34.960 --> 0:07:38.600 just felt awful about everything that was happening, and the 0:07:38.600 --> 0:07:42.160 worst thing for me was how scared everybody was because 0:07:42.160 --> 0:07:46.480 nobody really knew what COVID was, how they could catch it, 0:07:46.760 --> 0:07:51.120 where when. So I just wanted to do something to 0:07:51.240 --> 0:07:54.480 try to help the situation. So I thought I would 0:07:54.480 --> 0:07:57.080 look into vaccine childs and I did a lot of 0:07:57.120 --> 0:08:01.160 research online, figured out which child would be taking place 0:08:01.280 --> 0:08:04.880 in the San Francisco area where I live, and UM 0:08:05.000 --> 0:08:08.000 figured out how to sign up for one of those. 0:08:08.040 --> 0:08:10.360 And it was tough because even if you know the 0:08:10.440 --> 0:08:14.560 jug companies that are going to be testing vaccines, I 0:08:14.640 --> 0:08:17.600 learned a lot. I learned they outsourced those tests two 0:08:17.680 --> 0:08:20.600 different clinics, so then you have to figure out which 0:08:20.640 --> 0:08:22.920 the clinics are doing it and then you have to 0:08:22.960 --> 0:08:29.000 call them and get in their databases. That eventually I 0:08:29.160 --> 0:08:32.240 managed to sign up for the Fiser trial. So Sarah, 0:08:32.280 --> 0:08:34.360 give us some color on what it actually looks like 0:08:34.480 --> 0:08:36.640 or feels like to be in one of these trials. 0:08:36.640 --> 0:08:38.960 I mean, how long have you been in it? How 0:08:38.960 --> 0:08:41.360 often do you have to be checking in? Do you 0:08:41.440 --> 0:08:44.040 have to go in for in person visits? What does 0:08:44.120 --> 0:08:47.360 this all look like? Sure? So um. I went to 0:08:47.440 --> 0:08:51.440 this clinic in Walnut Creek, California, called the Diabolo Clinic. 0:08:51.480 --> 0:08:57.000 It was very well run um lots of distancing, uh, 0:08:57.480 --> 0:09:00.440 very kind of efficient feeling. I didn't you like I 0:09:00.480 --> 0:09:04.520 was wasting any time, but it was a substantial commitment 0:09:04.520 --> 0:09:07.760 of time. The first time that I went was probably 0:09:07.800 --> 0:09:12.760 about two hours, tons of paperwork. I met with a doctor, 0:09:12.800 --> 0:09:17.800 I met with a bottomist. They did a COVID test um, 0:09:17.880 --> 0:09:21.120 but they don't really tell you any of the results 0:09:21.200 --> 0:09:23.959 because they don't want you to know if you're getting 0:09:24.000 --> 0:09:27.360 the placebo or the real thing. And also they don't 0:09:27.360 --> 0:09:31.439 know I have a patient number. All my records are 0:09:31.600 --> 0:09:35.720 somehow separated from my name, so you know. I asked 0:09:35.760 --> 0:09:38.160 them do you know what I got? And they said no, 0:09:38.520 --> 0:09:41.800 we have it all rigged up so we can't tell. 0:09:42.640 --> 0:09:49.520 And um the actual shot for what was either the 0:09:49.600 --> 0:09:52.600 vaccine or the placebo came at the end of that 0:09:53.559 --> 0:09:57.120 first visit. It was very funny because there was this, 0:09:57.280 --> 0:09:59.320 you know, all I was being led from room to 0:09:59.440 --> 0:10:03.080 room for different tests and talks with different people, and 0:10:03.120 --> 0:10:05.880 then there was a big empty room, empty except for 0:10:06.320 --> 0:10:10.520 a huge blue chair. It almost looked regal like, look 0:10:10.640 --> 0:10:13.080 so medical at the same time, and I sat down 0:10:13.080 --> 0:10:15.640 and they gave me my shots. I felt fine that 0:10:15.760 --> 0:10:20.840 first time. UM I went back for a booster shot again, 0:10:20.880 --> 0:10:24.439 either the real thing or the placebo three weeks later. 0:10:25.480 --> 0:10:29.240 That hit me pretty hard. You know. I can't say 0:10:29.360 --> 0:10:31.880 for sure if I got the vaccine or if it 0:10:31.960 --> 0:10:34.320 was just a coincidence that maybe I got a weird 0:10:34.320 --> 0:10:36.840 about a twenty four hour flu or something around the 0:10:36.880 --> 0:10:40.920 same time, but I did not feel good after that. UM. 0:10:40.960 --> 0:10:44.520 I've been back once more, about a month after that shot, 0:10:44.600 --> 0:10:47.559 so they could take blood work and so on. I 0:10:47.559 --> 0:10:52.000 imagine they're testing me for um COVID and antibodies again, 0:10:52.440 --> 0:10:55.520 and then I will go back three more times over 0:10:55.800 --> 0:10:58.679 the course of two years total. So at the end 0:10:58.720 --> 0:11:01.040 of the two year study, I'll have been to this 0:11:01.080 --> 0:11:05.280 clinic six times, and I also have an app on 0:11:05.360 --> 0:11:08.520 my phone, so it's called child Max. I had to 0:11:08.600 --> 0:11:11.840 download it on my first visit. So after each of 0:11:11.880 --> 0:11:15.480 those shots, every single day, it would pay me and 0:11:15.600 --> 0:11:20.560 ask me are you experiencing nausea? As your temperature elevated. 0:11:20.640 --> 0:11:22.640 There were a bunch of questions, but I would have 0:11:22.720 --> 0:11:26.480 to go through an answer on that app. Since then, 0:11:27.240 --> 0:11:30.320 it now buzzes me once a week and just asks 0:11:30.400 --> 0:11:35.320 are you experiencing symptoms? And I'm not, so I said no, 0:11:35.760 --> 0:11:38.160 and then there are no more questions on the app. 0:11:38.800 --> 0:11:42.200 Thank goodness. I haven't experienced symptoms. If I ever do, 0:11:42.360 --> 0:11:45.720 I'd imagine the questions again would be more comprehensive on 0:11:45.800 --> 0:11:48.559 the app. So, Sarah, do I take from this that 0:11:49.240 --> 0:11:53.800 fiser won't know whether this is this test is effective 0:11:53.840 --> 0:11:57.280 for two years, as opposed to people talking about weeks 0:11:57.320 --> 0:12:01.040 or months trying to get some knowledge from these tests. No. 0:12:01.640 --> 0:12:04.640 My take, and this is just based on reading a 0:12:04.640 --> 0:12:07.720 lot of what my colleagues at Bloomberg has been reporting, 0:12:07.800 --> 0:12:11.199 is they'll have a pretty good idea. And let's say 0:12:11.240 --> 0:12:15.320 that I went UM and had the test or had 0:12:15.360 --> 0:12:19.000 the shot and UM I had the second one on 0:12:19.120 --> 0:12:23.480 September one, so I've already been back once they've measured 0:12:24.200 --> 0:12:27.240 my blood for antibodies. So let's say I did get 0:12:27.280 --> 0:12:29.640 the real shot and not the booster. They already know 0:12:29.960 --> 0:12:33.719 whether my blood has antibodies in it, so I think 0:12:33.760 --> 0:12:38.240 they have a good idea. And there are thousand people 0:12:38.280 --> 0:12:40.360 like me across the country that have been a part 0:12:40.360 --> 0:12:44.800 of this trial. So they are getting those early results 0:12:44.840 --> 0:12:47.520 of whether the people who got the early tests have 0:12:47.640 --> 0:12:50.680 antibodies or not. They are starting to see that right now, 0:12:51.320 --> 0:12:54.400 and so then over two years they'll be checking for 0:12:54.480 --> 0:12:56.400 the people who got the real shot. Oh do they 0:12:56.440 --> 0:12:59.240 still have antibodies six months later? Do they still have 0:12:59.360 --> 0:13:01.319 them a yearly? Earth do they still have them two 0:13:01.360 --> 0:13:04.360 years later? So it's I think that part is testing 0:13:04.440 --> 0:13:07.240 how long it might be effective, So really quick, just 0:13:07.320 --> 0:13:10.400 to wrap up, Sarah, is your sense then that the test, 0:13:10.520 --> 0:13:12.559 the study might not end for two years, but if 0:13:12.559 --> 0:13:14.960 there are signs that it works, they'll release it to 0:13:14.960 --> 0:13:19.520 the public before it's over. That's what they've said that 0:13:19.600 --> 0:13:22.280 they're planning to do. And again, they'll know whether it's 0:13:22.320 --> 0:13:25.880 working right now, and then the rest of it is 0:13:25.920 --> 0:13:28.920 just to see how long it works for. And one 0:13:28.920 --> 0:13:31.560 more thing, I'd like to say that I felt really 0:13:31.640 --> 0:13:34.679 sick after that second test, So clear your schedules that 0:13:34.880 --> 0:13:37.480 once you do get the vaccines, if that was the 0:13:37.520 --> 0:13:40.880 real thing. Seravic right, thank you so much. We appreciate that. 0:13:40.920 --> 0:13:43.959 Servic right. Jeez a Vent, your Capital reporter for Bloomberg News, 0:13:44.040 --> 0:13:47.360 joining us on the phone from San Francisco. This is 0:13:47.400 --> 0:13:51.720 Bloomberg Business Week with Carol Messer from Bloomberg Radio. Let's 0:13:51.720 --> 0:13:55.040 get to that M and A activity, Chronical Phillips buying 0:13:55.120 --> 0:13:58.640 Concho Resources for about nine point seven billion dollars in stock. 0:13:59.080 --> 0:14:02.120 That's the largest shale industry deal since a collapse in 0:14:02.280 --> 0:14:05.000 energy demand earlier this year. Let's get some details. We 0:14:05.040 --> 0:14:07.600 can do that with a good friend, Fernando Valley, oil 0:14:07.679 --> 0:14:10.800 and gas analysts for Bloomberg Intelligence. He joins us on 0:14:10.840 --> 0:14:13.520 the phone from New York City. So, Fernando, thumbs up, 0:14:13.800 --> 0:14:17.120 thumbs down? Do you like this deal? And why? All right? 0:14:17.160 --> 0:14:20.320 Paul glad to be here. Definitely like this deal for 0:14:20.320 --> 0:14:22.480 for both really, if there are two to the premier 0:14:22.520 --> 0:14:25.560 players in the shale patch, and for Chronico you're getting 0:14:25.840 --> 0:14:29.200 an entity that already generates free cash flow has a 0:14:29.200 --> 0:14:31.800 lot of locations in an area at the Permian basin 0:14:32.400 --> 0:14:35.720 where you really didn't have any locations beforehand, and if 0:14:35.720 --> 0:14:38.200 you're Conto, you're getting all stuck to you. Also, you 0:14:38.240 --> 0:14:41.840 still capture an eventual upside from an oil prester recovery 0:14:41.840 --> 0:14:44.480 in the next several years, and you're getting probably one 0:14:44.520 --> 0:14:47.640 of the few companies that's been all about generating pre 0:14:48.040 --> 0:14:51.720 cash flow from shale for the past ten years. Conico 0:14:51.880 --> 0:14:55.920 is really right sized for a lower for longer from 0:14:55.960 --> 0:14:59.280 the oil price crash. So they came into this downturn 0:14:59.760 --> 0:15:04.200 all lady prepared for an eventual prolonged weakness, and so 0:15:04.240 --> 0:15:07.720 they're in really good shape. And Chronical really also helps 0:15:07.800 --> 0:15:11.720 lower the corporate declines. Remember, shale declines really quickly at first, 0:15:12.040 --> 0:15:14.480 and so Conical because they have exposure to l en 0:15:14.520 --> 0:15:18.680 G oil sands conventional, their corporate decline rates are closer 0:15:18.720 --> 0:15:22.800 to ten percent as opposed to you you've seen shale. 0:15:23.640 --> 0:15:26.240 So thumbs up all around from you, Fernando. How does 0:15:26.240 --> 0:15:30.239 this Conjo acquisition though, change Conco's production profile and strategy, 0:15:30.280 --> 0:15:35.040 if at all? It doesn't really change their strategy, mostly 0:15:35.080 --> 0:15:39.400 because Concho is also being focused on more moderate growth 0:15:39.640 --> 0:15:41.880 and returns as opposed to some of the players that 0:15:41.920 --> 0:15:44.720 were growing at fifty to six percent for random and 0:15:44.840 --> 0:15:50.520 taking on significant leverage. The post post merger profile, they're 0:15:50.560 --> 0:15:53.800 still gonna be under one and a half times du 0:15:54.520 --> 0:15:56.880 more so as they captured a five million dollars and 0:15:56.920 --> 0:16:01.560 synergies they mentioned UM, so they're erg is really complementary. 0:16:02.280 --> 0:16:05.560 What it does change is that increases Chronicle is consolidated 0:16:05.560 --> 0:16:08.440 the climate that I mentioned UM, but it does so 0:16:08.760 --> 0:16:11.600 in the core of the Permian basin, which is the 0:16:11.920 --> 0:16:15.640 premier shale basin. When you have the profile in the 0:16:15.680 --> 0:16:19.000 other asset the Chronicle has, it can be a complementary play. 0:16:19.320 --> 0:16:21.200 It can be something where they don't they don't need 0:16:21.240 --> 0:16:24.160 to grow it at thirties, and they can grow more 0:16:24.160 --> 0:16:27.520 slowly and and really get that cash return on capital 0:16:27.600 --> 0:16:29.920 that they've been targeting for a really long time and 0:16:29.960 --> 0:16:33.880 they needed because their boxing position is dwindling. Their eagle 0:16:33.960 --> 0:16:38.040 fourth position is also slowing down considerably, so they needed 0:16:38.080 --> 0:16:40.040 to grow and the place to grow in the US 0:16:40.280 --> 0:16:43.680 at the current oil priced outlook is really the Permium basis. 0:16:44.360 --> 0:16:47.120 All right, Fernando, as a former investment banker, this is 0:16:47.160 --> 0:16:50.200 my next question, are we gonna do more deals in 0:16:50.280 --> 0:16:52.760 the shale patch? Are we gonna this just just the beginning. 0:16:54.360 --> 0:16:57.480 I mean the beginning really was Chevanovo and and this 0:16:57.600 --> 0:17:01.480 is why, uh, certainly not the last one. We don't think. Uh. 0:17:01.520 --> 0:17:04.880 There is a need for the industry to right size 0:17:05.000 --> 0:17:08.119 for a lower for longer or a lower forever oil 0:17:08.160 --> 0:17:11.800 price scenario, and a lot of the companies were really 0:17:11.800 --> 0:17:15.800 preparing for sixty five seventy dollars and we just don't 0:17:15.840 --> 0:17:19.360 see that happening anytime soon. UM. You're either looking to 0:17:19.400 --> 0:17:23.280 improve your overall drilling locations, you may have produced too 0:17:23.359 --> 0:17:26.920 much and run out of the really good stuff UM 0:17:27.160 --> 0:17:31.800 in in your portfolio, or you could have an issue 0:17:31.840 --> 0:17:34.760 with your balance sheet. So for Carnico, they were looking 0:17:34.760 --> 0:17:36.879 for more locations. For Concio, they were looking for a 0:17:37.000 --> 0:17:41.119 really strong balance sheet. UM. And that that makes sense 0:17:41.960 --> 0:17:44.080 where we see an issue or the players that have 0:17:44.200 --> 0:17:47.320 both run through most of its portfolio and also have 0:17:47.440 --> 0:17:49.879 significant leverage. So we think we'll see mergers in the 0:17:49.960 --> 0:17:53.879 high quality names, but the lower quality, highly leveraged names 0:17:54.119 --> 0:17:56.800 they'll struggle to catch a bid. In this scenario. There's 0:17:56.800 --> 0:17:59.520 a lot of resources out there, not necessarily a lot 0:17:59.520 --> 0:18:02.159 of cap So it's really the high quality names that 0:18:02.160 --> 0:18:05.080 we're going to be looked at. So quick one to 0:18:05.119 --> 0:18:07.399 wrap it up. Yeah, good, it's a quick one to 0:18:07.400 --> 0:18:08.879 wrap it up. So if we have forty dollars a 0:18:08.920 --> 0:18:11.280 barrel lot, we're really lodged here for some time. Are 0:18:11.280 --> 0:18:15.399 there any other companies out there you see his potential targets? Uh, 0:18:15.440 --> 0:18:18.919 there are certainly companies that will look to merge. Whether 0:18:18.920 --> 0:18:22.159 they are the targets or they are the consolidators, it 0:18:22.240 --> 0:18:24.520 remains to be seen. Because you could see high quality 0:18:24.600 --> 0:18:27.320 names like an E O G and Pioneer or Diamond 0:18:27.320 --> 0:18:32.399 Back Parsley Energy look to merge together with small or 0:18:32.440 --> 0:18:36.280 no premiums to reduce costs and improved locations. So interesting. 0:18:36.320 --> 0:18:37.760 All right, now we're gonna have to leave it there, 0:18:37.840 --> 0:18:39.679 but we're gonna have some more deal activity from you. 0:18:39.760 --> 0:18:43.399 I am sure. This is Bloomberg Business Week with Carol 0:18:43.400 --> 0:18:47.960 Messer from Bloomberg Radio. Fascinating story in the magazine here, 0:18:48.440 --> 0:18:51.280 Uh coming up. It's um. You know, just as we thought, 0:18:51.280 --> 0:18:53.159 you're getting back to a little bit of normal in 0:18:53.280 --> 0:18:56.240 terms of the restaurants and going out to eat cases, 0:18:56.280 --> 0:19:00.480 particularly in Europe, surging putting the restaurant industry on its 0:19:00.520 --> 0:19:04.320 back foot again. Joel Webert joins us. He's editor Bloomberg 0:19:04.320 --> 0:19:06.879 business Week. He joins us from the remote line from Brooklyn. 0:19:07.119 --> 0:19:09.920 And Robert Vines, chief food critic for Bloomberg News, he 0:19:10.080 --> 0:19:12.919 joins us on the phone from London. So, Joel, just 0:19:12.960 --> 0:19:15.679 when the you know that our friends over in Europe, 0:19:15.720 --> 0:19:18.879 I'm seeing stories in Paris and London and other cities 0:19:18.880 --> 0:19:21.040 in Italy as well, just trying to get on their 0:19:21.080 --> 0:19:23.480 feet again. Then the infections go back up. It's not 0:19:23.520 --> 0:19:27.320 good for their business, is it. It's a story UM everywhere, 0:19:27.359 --> 0:19:29.280 you know, and it's like just when you think you're 0:19:29.320 --> 0:19:32.840 like rounding a corner, Uh, you know, cases sneak back 0:19:32.920 --> 0:19:36.880 up and or surge. And you know, restaurants in particular 0:19:36.920 --> 0:19:38.560 are the ones that have been you know, they were 0:19:39.040 --> 0:19:41.960 really been just like on the front lines of this UM. 0:19:42.080 --> 0:19:45.680 And you know, Richard Vines is the one who who 0:19:45.680 --> 0:19:48.880 came to us from UM London to say, let's let's 0:19:48.880 --> 0:19:51.439 talk about restaurants here. So so Richard give us a 0:19:51.520 --> 0:19:53.760 sneak peak of kind of what's been happening in the 0:19:53.920 --> 0:19:57.800 UK and and London as uh, infections go up and 0:19:57.800 --> 0:20:02.320 and restaurants are are caught in the in in the vice. Yes, 0:20:02.359 --> 0:20:04.359 good evenings for none and well death has doubled in 0:20:04.400 --> 0:20:07.159 the UK in the past twelve days, so obviously the 0:20:07.160 --> 0:20:10.880 government's filely concerned. The last month he introduced the ten 0:20:10.960 --> 0:20:14.439 pm closing time for restaurants. It's quite serious. It's imagining 0:20:14.760 --> 0:20:17.320 sense want to eat and drink and ten o'quarck have 0:20:17.400 --> 0:20:19.480 to be out on the streets and that's been bad enough, 0:20:19.760 --> 0:20:21.920 but now they just need to use further instrictions. You 0:20:22.040 --> 0:20:26.200 can't eat at restaurants with people who not in your 0:20:26.240 --> 0:20:29.840 household or in your group. So I'm single, for example, beings, 0:20:29.840 --> 0:20:33.919 basically I can't go to restaurants, so quite a serious situation. 0:20:34.480 --> 0:20:39.439 Just I'm myself at home because where am I going 0:20:39.480 --> 0:20:40.720 to go? I'm not going down to the pub on 0:20:40.800 --> 0:20:43.320 my own. So Richard, I get the sense that last 0:20:43.320 --> 0:20:46.520 time around the subsidies really helped these restaurants, but obviously 0:20:46.640 --> 0:20:50.359 subsidies can't be too helpful if there are curfews in play, 0:20:50.680 --> 0:20:52.800 or if you just can't go out and eat at 0:20:52.840 --> 0:20:55.520 a restaurant, or there are higher restrictions when you speak 0:20:55.560 --> 0:20:58.639 with restaurateurs with restaurant owners, especially those that are more 0:20:58.680 --> 0:21:02.040 so local and mom and pop owned. What's their tone 0:21:02.080 --> 0:21:04.879 like right now? What's the feel? The tone is of 0:21:05.040 --> 0:21:08.600 total desolation and depression. I'm afraid Corbyn and King which 0:21:08.640 --> 0:21:10.400 one of the big restaurant groups in London. They own 0:21:10.400 --> 0:21:12.960 a place called the wolves Ley which is known internationally. 0:21:13.240 --> 0:21:15.800 When the latest restrictions came in, they had two thousand 0:21:15.840 --> 0:21:19.560 cancelations in twenty four hours. And the British government has 0:21:19.600 --> 0:21:23.560 actually even very help and supportives to restaurants or to 0:21:23.640 --> 0:21:27.280 businesses in general, paying for wage for SAPO further and 0:21:27.320 --> 0:21:31.000 so on. But those that subsidies easing down now and 0:21:31.040 --> 0:21:33.639 it looks like restrictions are coming back on more seriously. 0:21:34.240 --> 0:21:39.480 Whales just that it's on Friday's introducing total lockdown. Scotland 0:21:39.560 --> 0:21:42.880 introduced match strict measures and London, as I say, has 0:21:42.880 --> 0:21:45.240 come in the strict to measures. So I'd say the 0:21:45.280 --> 0:21:49.240