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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Intelligence

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Speaker 1: with Alex Steel and Paul Sweeney.

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Speaker 2: The real ap performance has been the US corporate high yield.

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Speaker 3: Are the companies lean enough? Have they trimmed all the fats?

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Speaker 2: The semiconductor business is a really cyclical.

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Speaker 1: Business, breaking market headlines and corporate news from across the globe.

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Speaker 3: Do investors like the M and A that we've seen?

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Speaker 2: These are two big time blue chip companies.

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Speaker 3: Window between the peak and cunt changing super fast.

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Speaker 1: Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.

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Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big

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Speaker 2: business stories impacting Wall Street and the global markets.

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Speaker 4: Each and every week we provide in depth research and

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Speaker 4: data on some of the two thousand companies and one

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Speaker 4: hundred and thirty industries our analysts cover worldwide.

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Speaker 2: Today, we'll look at how drug makers are being impacted

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Speaker 2: by policy in Washington, DC.

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Speaker 4: Plus, we'll discuss how one bank is abandoning its net

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Speaker 4: zero financed emission goals.

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Speaker 2: At first, we begin with the airlines industry. This week,

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Speaker 2: Delta Airlines withdrew its full year financial guidance due to

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Speaker 2: uncertainty surrounding global trade, and this comes despite the airline

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Speaker 2: reporting better than expected first quarter profit.

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Speaker 4: For more on this and the state of the airline industry,

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Speaker 4: we were drawn by George ferguson Bloomberg Intelligence in your Aerospace,

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Speaker 4: Defense and Airlines analyst.

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Speaker 2: We first asked George to break down what happened during

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Speaker 2: Delta's first quarter earnings call.

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Speaker 5: The call wasn't as bad I think as a lot feared.

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Speaker 5: You know, A lot of what we heard was the

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Speaker 5: premium markets are still good. Europe is still good, but

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Speaker 5: they're watching it very closely. Asia Pacific was a good

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Speaker 5: market as well. Non premium back of the airplane travel

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Speaker 5: in the domestic market is poor. And because of all that,

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Speaker 5: you know, they're gonna cap You're gonna flatline capacity, no

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Speaker 5: growth for the second half of the year. So it

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Speaker 5: sounded like things are okay. Maybe they're okay, but we're

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Speaker 5: watching things very close.

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Speaker 2: But I remember that Delta and the other US carriers

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Speaker 2: probably several weeks ago cut their guidance. This was before

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Speaker 2: I think an investor conference, so they've already cut guidance once.

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Speaker 2: Here agree, So where are we there? I mean, do

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Speaker 2: you feel like street estimates need to come down.

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Speaker 5: Here, agreed. Well, so when I looked at the preliminary

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Speaker 5: guidance for two Q, it did seem like street estimates

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Speaker 5: for two Q had to come down, right because Delta

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Speaker 5: gave some pretty broad ranges. But it looks like capacity

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Speaker 5: is going to rise five percent when I look at

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Speaker 5: schedules for them in the second quarter, and they said

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Speaker 5: revenue could be up to to down two and if

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Speaker 5: I did my math right, that means that I think

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Speaker 5: either way fares are softening again. It's we're definitely working

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Speaker 5: off lower expectations after they cut earnings expectations after the

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Speaker 5: JP Morgan conference. But so Caesar Trappie here, Georgia.

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Speaker 2: I know every year you take a boondoggle over to Europe,

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Speaker 2: either to London or Parish for these air shows, and

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Speaker 2: this is where these big airlines make place big orders

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Speaker 2: with the airplane suppliers bowing and airbus principally. Are we

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Speaker 2: going to get to a period, George where if they

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Speaker 2: even allow you to go to Paris of the French

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Speaker 2: late let you in, will European carriers buy Boeing planes

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Speaker 2: and vice versa. Will European carriers by or you know, Airbus.

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Speaker 5: I think they will. I think they will because the

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Speaker 5: queues for airplanes are so long you're not going to

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Speaker 5: get out of the queue you're in and go to

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Speaker 5: someone else's queue and wait longer. You'd have to wait

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Speaker 5: seven eight years for an A three twenty out of Airbus.

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Speaker 5: I think, as near as we could tell from the

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Speaker 5: backlog their show. But what I will tell you about

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Speaker 5: discussions with Ed Bastion about taking Airbus airplanes and who

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Speaker 5: pays a tariff? And he said he's not going to

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Speaker 5: pay a tariff, and he's not going to take any

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Speaker 5: deliveries or sorry, very few deliveries this year. So it

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Speaker 5: does sound like Delta has a tariff problem and isn't

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Speaker 5: ready to take new airplanes. Now I know, you know

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Speaker 5: their flatlining capacity for the back half of the year,

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Speaker 5: so maybe they don't need them. But if the market

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Speaker 5: was growing significantly right now, I think he'd have a problem.

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Speaker 2: So you mentioned kind of the weakness Delta was calling

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Speaker 2: out in the back of the plane, maybe some of

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Speaker 2: the more economy prices and seats. So does that mean

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Speaker 2: the discount airlines they're really going to face some trouble.

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Speaker 6: Yeah.

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Speaker 5: I mean the funny thing is again when sort of Delta,

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Speaker 5: United and American Ad justin earnings a month ago. The

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Speaker 5: low cost carriers did a little bit, but the moves

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Speaker 5: weren't as great, and the low cost carriers had already

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Speaker 5: been cutting capacity, right if you think about it. Spirit

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Speaker 5: Airlines went bankrupt. They cut forty percent out of their schedule,

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Speaker 5: or something like thirty percent of their schedule. Southwest significantly

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Speaker 5: slowed growth, they went close to zero. Jet Blue has

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Speaker 5: been cutting and now Delta came in today and said, look,

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Speaker 5: we're going to cut the back half of the year

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Speaker 5: to flat. So I feel like the full service have

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Speaker 5: to make up ground here because they had been growing

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Speaker 5: a little bit too fast. We had seen that at

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Speaker 5: the beginning of the year, we're going to see an

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Speaker 5: earning season. Whether or not maybe low cost got ahead

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Speaker 5: of the curve here. I still can't believe that Delta

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Speaker 5: can deliver a seat as cheap as a low cost carrier.

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Speaker 5: So I personally think the low cost carriers still have

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Speaker 5: a valid business here and they'll fill airplanes and do okay.

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Speaker 5: But when you get into times of trouble in this industry,

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Speaker 5: Trouble is big in this industry. Right, there's a lot

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Speaker 5: of operating leverage and so we're going to see, right, we're.

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Speaker 4: Gonna jetfield prices are coming down. I mean they are,

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Speaker 4: That's the thing. Thirty seconds top airline and to manage

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Speaker 4: all of this right now, what do you think.

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Speaker 5: I'd go with? Balance sheets?

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Speaker 6: Right?

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Speaker 5: And that's going to be companies like Southwest and Delta

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Speaker 5: that have strong balance sheets and weather storms.

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Speaker 2: Our Thanks to George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense

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Speaker 2: and Airlines Analyst.

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Speaker 4: We move next to the consumer goods industry. This week,

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Speaker 4: Constellation Brands issued downbeat guidance for the year as new

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Speaker 4: US tariffs im muted demand. Way on the beer, wine,

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Speaker 4: and spirits maker.

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Speaker 2: For more, We were joined by Ken Sha, Bloomberg Intelligence

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Speaker 2: Senior Consumer Products Analyst.

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Speaker 4: We first asked Ken for his take on Constellation's most

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Speaker 4: recent guidance.

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Speaker 7: There's so many moving parts to the Constellation storyline here.

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Speaker 7: It's really a challenge of analysts to put it all together.

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Speaker 7: But you touch on the right points, and that is

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Speaker 7: the near term challenge is facing a Constellation and other

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Speaker 7: brewers for that matter, is weak demand. A lot of

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Speaker 7: it is economic. Constellation would also point to their key

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Speaker 7: demographic is the Hispanic demographic, and they're having a little

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Speaker 7: tougher time with the employment situation and slow down, but

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Speaker 7: they have some longer term threats also. I mean, you

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Speaker 7: have more substitute products. You have legal cannabis. You have

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Speaker 7: the hemp based CBD THHC products that are now down

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Speaker 7: main street. You don't have to go to a dispensary

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Speaker 7: to buy THC anymore, you just go to the local

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Speaker 7: liquor store. You have the GLP one drugs where people

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Speaker 7: are Our studies show that are consuming less alcohol because

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Speaker 7: they're on those drugs. All those things are weighing on

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Speaker 7: the near term and perhaps longer term sales growth potential

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Speaker 7: for beer. And that's what the anamals are trying to

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Speaker 7: wrap our heads around right now.

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Speaker 2: What is the price elasticity on alcohol? Can these companies

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Speaker 2: pass along price increases?

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Speaker 7: Well, it depends on the product pole. The good news

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Speaker 7: among that other otherwise onerous outlook is that Constellation's Corona

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Speaker 7: and Medello brands lead the market in terms of growth.

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Speaker 7: Those products continue to command reamium prices. They're growing faster

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Speaker 7: than the market, so they're they're generating best in class

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Speaker 7: operating margins on those products, but you know, they're not

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Speaker 7: immune to the slowdown, and clearly they lowered their guidance.

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Speaker 7: Well the fourth their fiscal fourth quarter came in a

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Speaker 7: little better than expected. Some of the concerns out there

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Speaker 7: is they lowered their longer term sales growth projections. Used

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Speaker 7: to be, you know, a high single digit kind of

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Speaker 7: sales growing segment for many years. They came out and said,

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Speaker 7: you know, over the next few years, you're going to

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Speaker 7: see yeah, we're like low single digit. And the analysts

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Speaker 7: were a little taken aback by that. And to Alex's

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Speaker 7: question before, how much is that near term you know,

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Speaker 7: cyclical economic issues and how much is longer term demographic

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Speaker 7: things weighing on this category? So no one really knows.

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Speaker 7: So we'll find out.

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Speaker 4: Nobody knows, right, So then what does Constellation do about that? Like,

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Speaker 4: do they go build a beer plant in the US,

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Speaker 4: Do they look for some M and A, do they

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Speaker 4: pair back?

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Speaker 6: Like?

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Speaker 3: What do they do?

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Speaker 6: Well?

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Speaker 7: They're innovating. I would argue that Constellation is one of

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Speaker 7: the more innovative beer companies. So they're taking that that

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Speaker 7: base of a real good brand family of Corona and Medelo,

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Speaker 7: and they have Pacific go but they also are extending

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Speaker 7: into chiladas, which are very flavorful malt based products. They're

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Speaker 7: getting into the malt based seltzer markets a little bit.

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Speaker 7: They used to do it, but I'm going to come

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Speaker 7: back with a better product. Now they have a no

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Speaker 7: alcohol version Corona, So it's innovation. I think that they

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Speaker 7: believe can continue to drive sales growth. But there's no

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Speaker 7: silver bullet. I mean, there's no big acquisition out there.

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Speaker 7: I don't believe that they're going to make to enhance

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Speaker 7: their growth. I think they have a good brand and

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Speaker 7: a good asset to grow. But again, you're not going

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Speaker 7: to escape the long term headwinds facing alcoholic products, alcoholic

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Speaker 7: beverage products in general as a matter of fact.

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Speaker 2: So can you follow the beverages, the tobacco and the

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Speaker 2: cannabis companies? Is there a place to hide in your

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Speaker 2: sector here in a world where where you're going to

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Speaker 2: see potentially slower growth from some of these trade policies.

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Speaker 7: Well, of the ones you mentioned, Paul, I mean the tobacco,

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Speaker 7: particularly cigarette company lit cigarettes are some ninety percent of

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Speaker 7: that business. Still they are pretty much immune to the

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Speaker 7: tariff situation. It's pretty much a domestic business. Yes, there's

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Speaker 7: some tobacco leaf imports that come in and so on,

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Speaker 7: but by and large that's a domestic business. So if

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Speaker 7: if you're worried about tariffs, perhaps that's a place where

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Speaker 7: can can go in terms of, you know, beyond tariff threats.

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Speaker 7: Really the soft drink side of beverages is a good

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Speaker 7: place to be. I would argue that even the you know,

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Speaker 7: tried and true carbonated beverage sodas, you know, the diet sodas,

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Speaker 7: are still performing pretty well. They're innovating well. Cure Doctor

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Speaker 7: Pepper continues to come out with new innovation that's moving

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Speaker 7: that category. They're kind of leading that category's growth right now,

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Speaker 7: but they're doing a pretty good job doing it. So

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Speaker 7: that's a good place to go in terms of the

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Speaker 7: universe that I cover. Cannabis is tough. Cannabis. You know,

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Speaker 7: the regulation on cannabis is not easing. The Trump administration

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Speaker 7: is not being kind to the acadamist industry, and we're

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Speaker 7: not expecting much on the way of legalization liberalization near term,

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Speaker 7: with the exception of some states. Some states will probably

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Speaker 7: continue to legalize, but from a federal point of view,

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Speaker 7: I would wait for the next Administration.

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Speaker 2: Our thanks to Ken Shay, Bloomberg Intelligence senior consumer products analysts.

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Speaker 4: Coming up a conversation with Workday's chief technology officer on

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Speaker 4: artificial intelligence.

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Speaker 2: depth research and data on two thousand companies and one

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Speaker 2: bi go on the terminal.

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Speaker 4: I'm Paul Sweeney and a Malex Steel, and this is Bloomberg.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 4: We look at research from Bloomberg n EF previously known

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Speaker 4: as New Energy Finance. They're the team at Bloomberg that

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Speaker 4: tracks and analyzes the energy transition from commodities to power, transport, industries, buildings,

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Speaker 4: and the agricultural sectors.

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Speaker 2: We recently looked at the effect of President Donald Trump's

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Speaker 2: policies on clean energy markets. This week, President Trump announced

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Speaker 2: he's raising tariffs on Chinese goods.

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Speaker 4: Many critical minerals and energy products come from China and

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Speaker 4: are subject to these tariffs, and that could have a

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Speaker 4: big impact on clean energy moving forward.

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Speaker 2: Separately, a Trump administration executive order said it's exempting forty

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Speaker 2: seven coal fired power plants from stringent air pollution mandates

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Speaker 2: and the goal is to revitalize the coal industry.

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Speaker 4: For more on all of this, we are joined by

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Speaker 4: Derek flackl b any F, lead US policy analysts.

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Speaker 2: We first asked Derek what he makes of the executive

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Speaker 2: order on coal.

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Speaker 8: Well, the executive order is interesting because this is sort

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Speaker 8: of a replay of what Trump tried to do in

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Speaker 8: his first term.

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Speaker 6: Right.

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Speaker 8: He had previously talked about increasing payments to or using

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Speaker 8: emergency powers for preserving existing coal plants, maybe bringing old

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Speaker 8: ones back online, and as we can see from the

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Speaker 8: power generation data, that didn't really work out. Coal is

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Speaker 8: now fifteen percent of generation in the US per year,

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Speaker 8: down from considerably higher levels before. So there's a lot

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Speaker 8: of different moving parts to this. You might see more

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Speaker 8: say coal exports, more long term gathering of coal leases,

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Speaker 8: which have been sort of moving back and forth from

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Speaker 8: Obama to Trump one, to Biden and now to Trump two.

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Speaker 8: But in general it's hard to say that this will

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Speaker 8: be a huge boon to coal build out or restoration,

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Speaker 8: especially when you have tariffs weighing on any kind of

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Speaker 8: big capital project.

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Speaker 2: All right, so talk about, you know, the energy ecosystem.

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Speaker 2: Where do we get stuff for the energy ecosystem, whether

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Speaker 2: it's fossil fuels, clean energy, where do we get the

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Speaker 2: equipment and is that something that's going to be impacted

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Speaker 2: by these tariffs?

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Speaker 9: Oh, very heavily.

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Speaker 8: Even for fossil fuels, which are often a very domestically

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Speaker 8: extracted resource, there's reliance on steel, luminum, specialized equipment that's imported,

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Speaker 8: which is why you saw the Dallas Fed register such

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Speaker 8: negative opinions about the tariffs coming in generally, more broadly

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Speaker 8: in terms of say solar equipment that mostly comes from

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Speaker 8: Southeast Asia, because we've had batteries, we've had tariffs in

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Speaker 8: China for a long time. Batteries themselves tend to come

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Speaker 8: from China. Electric vehicles are imported from a variety of places,

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Speaker 8: but especially you know, it's very domestic, with the fair

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Speaker 8: amount of Canada and Mexico in there. And lastly, if

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Speaker 8: you're thinking about say offshore wind, that's pretty dependent on Europe.

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Speaker 8: The only thing that's really effectively on shore and minimally

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Speaker 8: dependent on trade is onshore wind in the US.

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Speaker 4: What is the future of offshore wind in the US?

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Speaker 4: I mean, if we're talking about ramping up coal and

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Speaker 4: sort of there's zero love from the administration on offshore wind.

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Speaker 4: Have we seen sort of I don't know, leases or

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Speaker 4: any contracts be broken or do you feel like companies

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Speaker 4: that are still are still committed to the longer term

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Speaker 4: world of offshore wind.

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Speaker 8: Well, I mean what the offshore win companies will tell you.

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Speaker 8: This is a multi year, long term process of building

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Speaker 8: that's beyond any one administration. We have seen one lease

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Speaker 8: be canceled by the federal government for an ongoing project,

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Speaker 8: but generally speaking, we haven't seen a lot more movement

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Speaker 8: for things that have already been permitted and leased. Now

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Speaker 8: that's important because the federal government has a lot of

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Speaker 8: leverage over that process. We're not seeing a lot more

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Speaker 8: being added to the pipeline. But the real issue is

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Speaker 8: going to come in the form of costs, inflation, and

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Speaker 8: also potentially interest rates. We saw a major slowan an

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Speaker 8: offshore win under Biden, which is a very supportive administration,

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Speaker 8: simply because the cost of inputs went up and as

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Speaker 8: inflation went up. The FED height rates and wind is

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Speaker 8: a very large capital intensive project category and especially sensitive

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Speaker 8: to those kinds of things. So if the terrorists lead

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Speaker 8: to those broader impacts, we might see some fairly negative

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Speaker 8: results for even the offshore win projects that are already

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Speaker 8: allowed to go forward.

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Speaker 2: Derek, I think even folks that are you know that

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Speaker 2: question the value of the economic value of tariff in general,

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Speaker 2: they kind of recognize that some of this strategically important

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Speaker 2: stuff maybe that we ourn was strategically important from the

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Speaker 2: pandemic when they trade the cycles were all disrupted, the

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Speaker 2: trade routes were disrupted. That makes some sense. Is a

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Speaker 2: clean energy did they have a focus on bringing this

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Speaker 2: stuff on shore as much as possible.

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Speaker 8: There's been a lot of discussion of that across multiple administrations.

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Speaker 8: The Bide administration was in favor of that. The Trump

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Speaker 8: administration is in favor of on shory manufacturing generally and

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Speaker 8: of energy security independence, even dominance, as they like to

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Speaker 8: say generally, but that's a hard thing to achieve with

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Speaker 8: tariffs alone. Ultimately, a lot of the solar factories, battery factories,

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Speaker 8: ev factories that are coming up in the US are

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Speaker 8: dependent on imports, whether those are imports of upstream components

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Speaker 8: or of the manufacturing equipment needed to make the final

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Speaker 8: products solar panels and batteries themselves. And right now we're

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Speaker 8: seeing costs go up on those across the board. Unless

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Speaker 8: you have more reliable revenue streams like tax credits, for example,

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Speaker 8: it's kind of hard to imagine new decisions to build

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Speaker 8: that stuff out. Even things that are already being built

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Speaker 8: are facing uncertainty not only from the Trump tariffs, from

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Speaker 8: other investigations into tariffs being run at the Department of

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Speaker 8: Commerce and US Trade Representative, but also on the fate

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Speaker 8: of those tax credits, which is going to help guarantee

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Speaker 8: their revenues in the long term.

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Speaker 4: Yeah, there's a great point which leads us to the IRA,

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Speaker 4: the Inflation Reduction Act, which I mean, clearly President Trump

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Speaker 4: hates that thing, but there are is a lot of

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Speaker 4: value in it through the tax credits and subsidies for

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Speaker 4: companies that supposedly he is a fan of, like the

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Speaker 4: oil industry for example. When do you think we're going

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Speaker 4: to know the fate of the IRA and those tax credits.

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Speaker 8: That's a great question, and I've been wondering at myself. Obviously,

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Speaker 8: we're seeing a lot of wrangling between the House and

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Speaker 8: Senate about the top lights on their big budget bill

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Speaker 8: they're going to try and pass by the end of

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Speaker 8: the year. Obviously, the end of the year is when

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Speaker 8: individual tax rates go up, and so that's one of

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Speaker 8: the big forcing functions. You also are seeing the x

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Speaker 8: state the debt ceiling occurring somewhere between July and maybe September,

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Speaker 8: and that's going to be a point where there's going

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Speaker 8: to be a lot of pressure to pass a big

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Speaker 8: budget package, raise the debt ceiling, and probably also get

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Speaker 8: some of this tax material done. But we've seen a

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Speaker 8: lot of debt lines blown already for when we were

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Speaker 8: allegedly going to get top line packages, which are a

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Speaker 8: preconditioned to figure out what's going to happen what tax

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Speaker 8: credit and we don't even know that yet at this point.

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Speaker 8: We don't even know if they're going to use this

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Speaker 8: particular budget commit called current Policy, which would really reduce

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Speaker 8: the pressures to cut more. And as they're trying to

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Speaker 8: use that, we're seeing a lot of blowback from physical

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Speaker 8: conservatives in both the Senate but especially in the House,

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Speaker 8: and so we'll see.

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Speaker 4: Thank you so much to Derek flackl bn EF lead

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Speaker 4: US policy analyst. BLOOMERIG Intelligence recently hosted its fourth Generative

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Speaker 4: Artificial Intelligence conference and there were some great lineups in

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Speaker 4: terms of how you apply and make AI for more.

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Speaker 2: Alex and I were joined by Jim Stratton Workday, chief

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Speaker 2: technology officer the AI platform. Workday trades under the NASDAK

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Speaker 2: ticker wday.

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Speaker 4: We first asked Jim where workday sits in the AI space.

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Speaker 9: Workday builds and deploys and serves enterprise finance and HR

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Speaker 9: for major corporations, for state higher ed for large institutions,

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Speaker 9: and AI really is built directly into the products that

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Speaker 9: we build. So if you think about the different types

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Speaker 9: of workflows around running a business, around running a major business,

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Speaker 9: all of that is right to be infused with AI

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Speaker 9: for automation, for ease of use, and that's really what

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Speaker 9: we're building into.

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Speaker 2: Pointing now, so to what extent, I guess a lot

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Speaker 2: of US lay people we're trying to get a sense

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Speaker 2: of this is just the next step in the evolution

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Speaker 2: of tech or is AI elite a step function? How

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Speaker 2: do you think about the technology of AI, the compute

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Speaker 2: that it and the applications coming from that.

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Speaker 9: It is the next step really the next evolution and technology.

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Speaker 9: But I think the leverage that we can get out

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Speaker 9: of AI, it really is a leap in terms of

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Speaker 9: it's in exponential growth, in terms of productivity, in terms

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Speaker 9: of enhancing humans and the capabilities of what we have

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Speaker 9: in the workplace. It really is an exponential leap for

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Speaker 9: us in the technology space.

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Speaker 4: So give me a use case. So some of your

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Speaker 4: client like GE or Visa, right, I come to you

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Speaker 4: and say, hey, Jim, what are you going to do

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Speaker 4: for me? And how does it help me and make

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Speaker 4: me more productive or something along those lines. What does

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Speaker 4: that use case look like?

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Speaker 9: So if you think about across I'll give you a

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Speaker 9: couple examples across HR and finance. So think about the

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Speaker 9: recruiting space a talent acquisition. You have in many cases

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Speaker 9: thousands of jobs, hundreds of thousands of jobs that are

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Speaker 9: open across even just the US. Here within a particular

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Speaker 9: company you may be sourcing for you know, ten fifty

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Speaker 9: one hundred jobs or literally thousands of jobs across a

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Speaker 9: large enterprise, and you're getting in some cases hundreds of thousands,

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Speaker 9: millions of resumes into those jobs. Literally that many resumes,

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Speaker 9: it's really hard to go through and source that. AI

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Speaker 9: is a terrific space, and actually we have a recruiting

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Speaker 9: agent out in the market now that helps significantly with

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Speaker 9: that sourcing problem in terms of weeding through who are

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Speaker 9: the best candidates, what are the best skills, depths of skills,

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Speaker 9: even some of those skills are hidden. AI is actually

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Speaker 9: really good at map that into a job requisition and saying,

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Speaker 9: you know what, these are probably your top ten candidates,

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Speaker 9: and then handing that off to a recruiter to then

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Speaker 9: go do the human engagement interacting with those candidates and

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Speaker 9: finding the best, the best one, the best fit that's

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Speaker 9: already out in the market. And we're seeing incredible improvements

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Speaker 9: in terms of talent acquisition efficiency, what the recruiters are

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Speaker 9: able to source, how quickly they can fill roles. On

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Speaker 9: the on the finance side, I'll give you a quick

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Speaker 9: example there as well. Our finance teams and every finance

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Speaker 9: team at every every major company out there spend tons

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Speaker 9: of time pouring over contracts to understand the details in

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Speaker 9: those contracts and how that maps directly into their into

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Speaker 9: their books, into their financials. AI is fantastic at not

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Speaker 9: only extracting information off of contracts, but summarizing that and

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Speaker 9: actually directly mapping that back into the gl of a

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Speaker 9: company that's also out in the market for us UH

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Speaker 9: and and we're seeing great gains in that in terms

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Speaker 9: of efficiency of what the legal and finance teams can do.

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Speaker 2: So with what love of confidence can you say that

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Speaker 2: all this money that's being spent on AI is generating

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Speaker 2: a positive return or will generate a positive return in

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Speaker 2: a reasonable time.

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Speaker 9: Actually, it's a great question. There's a huge amount of

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Speaker 9: money that's being spent just on the pure advancement of

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Speaker 9: frontier models of really research AI, and we are seeing

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Speaker 9: incredible gains in terms of those moving to what we

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Speaker 9: call reasoning models, so the ability to actually think through

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Speaker 9: a problem in multiple steps and then actually go action

440
00:22:24,040 --> 00:22:26,200
Speaker 9: against that. I think that's going to have really broad

441
00:22:26,240 --> 00:22:29,320
Speaker 9: application across lots of things, not just enterprise software, but

442
00:22:29,760 --> 00:22:32,119
Speaker 9: just how we interact with everything in the world. But

443
00:22:32,359 --> 00:22:36,280
Speaker 9: directly within the enterprise world. We're now very much focused

444
00:22:36,280 --> 00:22:37,760
Speaker 9: and I spent a lot of my time talking with

445
00:22:37,840 --> 00:22:40,800
Speaker 9: CIOs out in the community, and they're thinking about this

446
00:22:40,880 --> 00:22:43,560
Speaker 9: exactly the same way. It is, how do we we've

447
00:22:43,600 --> 00:22:46,440
Speaker 9: already spent a bunch of money trying to trying things out,

448
00:22:46,480 --> 00:22:49,360
Speaker 9: playing around. Now we need to show direct ROI back

449
00:22:49,359 --> 00:22:51,720
Speaker 9: in those investments. And that's the part where we are

450
00:22:51,840 --> 00:22:54,760
Speaker 9: now is the products that are being built. The problems

451
00:22:54,760 --> 00:22:57,960
Speaker 9: that people like Workday, Companies like work Day are focused

452
00:22:58,000 --> 00:23:00,960
Speaker 9: on solving are direct ROI. How do we get efficiency

453
00:23:01,000 --> 00:23:03,080
Speaker 9: back into the business. How do we reduce risk in

454
00:23:03,119 --> 00:23:05,960
Speaker 9: the business. Those are the primary areas where we're going now.

455
00:23:06,280 --> 00:23:09,800
Speaker 2: Thanks to Jim Stratton, Workday's chief technology officer.

456
00:23:09,560 --> 00:23:11,240
Speaker 4: Coming up on the program, We're going to break down

457
00:23:11,240 --> 00:23:14,320
Speaker 4: how drug makers are being impacted by policy in Washington, DC.

458
00:23:14,640 --> 00:23:17,359
Speaker 2: You're listening to the Bloomberg Intelligence on Bloomberg Radio, providing

459
00:23:17,359 --> 00:23:19,760
Speaker 2: in depth research and data on two thousand companies and

460
00:23:19,760 --> 00:23:22,720
Speaker 2: one hundred and thirty industries. You can access Bloomberg Intelligence

461
00:23:22,800 --> 00:23:24,080
Speaker 2: via Bigo on the terminal.

462
00:23:24,200 --> 00:23:27,160
Speaker 4: I'm Paul Sweeney and am Alex Steele, and this is Bloomberg.

463
00:23:34,720 --> 00:23:38,640
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch the program

464
00:23:38,720 --> 00:23:42,160
Speaker 1: live weekdays at ten am Eastern on Applecarplay and Android

465
00:23:42,160 --> 00:23:45,159
Speaker 1: Auto with the Bloomberg Business app. You can also listen

466
00:23:45,240 --> 00:23:48,520
Speaker 1: live on Amazon Alexa from our flagship New York station

467
00:23:49,040 --> 00:23:51,720
Speaker 1: Just say Alexa play Bloomberg, eleven thirty.

468
00:23:52,640 --> 00:23:54,960
Speaker 4: We move next to the drug and pharmaceutical space.

469
00:23:55,000 --> 00:23:57,639
Speaker 2: The Trump administration recently rejected a plan to pay for

470
00:23:57,720 --> 00:23:59,200
Speaker 2: OBCD drugs for Medicare.

471
00:23:59,200 --> 00:24:02,520
Speaker 4: Patients may now need to rely on Congress to expand

472
00:24:02,520 --> 00:24:06,120
Speaker 4: OBC drug coverage, with a potential scale down expansion possibly

473
00:24:06,160 --> 00:24:07,960
Speaker 4: emerging in a future Republican bill.

474
00:24:08,240 --> 00:24:10,080
Speaker 2: For more on this and the latest news in the

475
00:24:10,119 --> 00:24:13,160
Speaker 2: obesity drug space, we were joined by Sam Fazzelli, Bloomberg Intelligence,

476
00:24:13,280 --> 00:24:16,560
Speaker 2: Director of Research for Global Industries and senior pharmaceuticals analysts.

477
00:24:16,640 --> 00:24:19,760
Speaker 4: We first asked Sam how President Trump projecting obesity coverage

478
00:24:19,760 --> 00:24:20,800
Speaker 4: impacts that market.

479
00:24:21,160 --> 00:24:23,200
Speaker 10: Of course, what happened is that this has been something

480
00:24:23,240 --> 00:24:27,240
Speaker 10: that was put together in the Biden era in terms

481
00:24:27,280 --> 00:24:31,520
Speaker 10: of trying to get Medicare coverage for these obesity drugs. Remember,

482
00:24:31,920 --> 00:24:34,359
Speaker 10: medicare are folks that are over sixty five years old

483
00:24:35,160 --> 00:24:37,840
Speaker 10: and more likely to be overweight.

484
00:24:38,080 --> 00:24:39,480
Speaker 6: Not necessarily right.

485
00:24:39,800 --> 00:24:41,960
Speaker 10: But more likely to be overweight and more likely to

486
00:24:42,040 --> 00:24:44,720
Speaker 10: have issues to do with overweight.

487
00:24:45,920 --> 00:24:46,760
Speaker 6: So it's a.

488
00:24:46,760 --> 00:24:51,480
Speaker 10: Very important group of individuals to have this products available for.

489
00:24:52,119 --> 00:24:53,960
Speaker 10: But I think there is a general sense and I

490
00:24:53,960 --> 00:24:55,960
Speaker 10: think we had expected this, So this is not an

491
00:24:56,040 --> 00:25:02,160
Speaker 10: unexpected outcome that the Secretary of the HHS Human Health

492
00:25:02,200 --> 00:25:05,719
Speaker 10: Services in the US is not necessarily a fan of

493
00:25:06,480 --> 00:25:10,840
Speaker 10: obesity drugs. However, there's a little aspect here that's important.

494
00:25:11,359 --> 00:25:14,359
Speaker 10: These drugs are also covered by Medicare for those who

495
00:25:14,400 --> 00:25:20,239
Speaker 10: suffer from sleep apnea and cardiovascular morbidities, those indications, and

496
00:25:20,359 --> 00:25:23,160
Speaker 10: that usage has not been withdrawn. It's just the use

497
00:25:23,200 --> 00:25:26,399
Speaker 10: for obesity that's been withdrawn or at least is not

498
00:25:26,480 --> 00:25:27,600
Speaker 10: being proposed anymore.

499
00:25:28,160 --> 00:25:30,520
Speaker 4: So what I mean, can that be real? That doesn't

500
00:25:30,520 --> 00:25:33,120
Speaker 4: make any sense to me, And like, the whole point

501
00:25:33,119 --> 00:25:36,479
Speaker 4: of these drugs is to help obesity. How are they

502
00:25:36,480 --> 00:25:37,600
Speaker 4: going to keep that distinction?

503
00:25:39,480 --> 00:25:42,960
Speaker 10: Yeah, but Alex, not that I'd like to necessarily agree

504
00:25:42,960 --> 00:25:44,840
Speaker 10: with the kind of decisions that are being made or

505
00:25:44,840 --> 00:25:48,240
Speaker 10: disagree with them. If you think about it, if everybody

506
00:25:48,320 --> 00:25:53,720
Speaker 10: who has a comorbidity, for example, cardiovascular disease, kidney disease,

507
00:25:54,359 --> 00:25:56,760
Speaker 10: sleep apnea, and the only people who are not going

508
00:25:56,800 --> 00:25:58,439
Speaker 10: to be able to get it other people who just

509
00:25:58,520 --> 00:26:02,359
Speaker 10: overweight nothing else, that's a little bit easier to swallow

510
00:26:02,400 --> 00:26:04,040
Speaker 10: than if they were they said, Okay, we're just going

511
00:26:04,080 --> 00:26:07,840
Speaker 10: to ban it. Because those elements of protecting patients that

512
00:26:08,040 --> 00:26:11,280
Speaker 10: is important for health. Now, if these other obius people

513
00:26:11,760 --> 00:26:15,040
Speaker 10: ended up the ones who are now not being included,

514
00:26:15,200 --> 00:26:19,000
Speaker 10: just obs and no comobidities having one of these issues,

515
00:26:19,000 --> 00:26:19,880
Speaker 10: they would be included.

516
00:26:20,640 --> 00:26:21,720
Speaker 6: So I think the.

517
00:26:21,760 --> 00:26:24,920
Speaker 10: Issue here is some folks believe that all of these

518
00:26:24,960 --> 00:26:28,399
Speaker 10: things should be solved by eating better. Of course, we

519
00:26:28,480 --> 00:26:30,639
Speaker 10: all want to do that and not eating too.

520
00:26:30,520 --> 00:26:31,560
Speaker 6: Much, et cetera, et cetera.

521
00:26:32,000 --> 00:26:35,760
Speaker 10: However, society shows us that that's clearly not possible for

522
00:26:35,800 --> 00:26:37,280
Speaker 10: a lot of people, and they end up in a

523
00:26:37,280 --> 00:26:40,000
Speaker 10: situation where they gain weight and they put in more

524
00:26:40,119 --> 00:26:43,639
Speaker 10: energy and then they spend That's where the problems arise.

525
00:26:43,880 --> 00:26:46,680
Speaker 10: But so I don't think it's really as bad as

526
00:26:46,720 --> 00:26:48,480
Speaker 10: it sounds when you first look at it.

527
00:26:48,880 --> 00:26:53,080
Speaker 2: Novo Nordisk is down. Is that just the obesity play

528
00:26:53,240 --> 00:26:54,840
Speaker 2: unwinding for this name.

529
00:26:55,480 --> 00:26:57,919
Speaker 10: Well, you would think to yourself, but why would it

530
00:26:58,000 --> 00:27:00,160
Speaker 10: for this name and not for Eeli living right. We've

531
00:27:00,160 --> 00:27:03,000
Speaker 10: always believed that Lily obviously has a lot more going on,

532
00:27:03,119 --> 00:27:06,159
Speaker 10: but we all know that Lily is particularly driven with

533
00:27:06,200 --> 00:27:07,360
Speaker 10: the obesity aspect.

534
00:27:07,640 --> 00:27:10,000
Speaker 6: We also know that the obesity.

535
00:27:09,560 --> 00:27:14,080
Speaker 10: Drug from Lily, zip Bound, has outperformed NOVAL noticsts Bigov.

536
00:27:14,720 --> 00:27:17,560
Speaker 10: We also know that Novo Nordics is based in Denmark,

537
00:27:17,600 --> 00:27:20,920
Speaker 10: and there's this fight going on between or at least

538
00:27:20,920 --> 00:27:25,000
Speaker 10: a heated conversations going on between the US administration and

539
00:27:25,040 --> 00:27:28,520
Speaker 10: the and the Denmark Danish authorities. So I think you

540
00:27:28,560 --> 00:27:30,440
Speaker 10: can pilo these things up on top of each other

541
00:27:30,440 --> 00:27:32,520
Speaker 10: and worry about NOVO more than you would about.

542
00:27:33,880 --> 00:27:36,199
Speaker 4: All right, fair enough, what about the rest of the sector.

543
00:27:36,560 --> 00:27:37,520
Speaker 3: What are what are some.

544
00:27:37,600 --> 00:27:38,800
Speaker 4: Themes that are on your mind?

545
00:27:40,320 --> 00:27:43,680
Speaker 10: Yeah, so vaccines continue to be a theme on our mind, which,

546
00:27:43,720 --> 00:27:47,359
Speaker 10: of course there there's there's always words that get that

547
00:27:47,440 --> 00:27:51,760
Speaker 10: are spoken or statements that are written that seem to suggest.

548
00:27:51,400 --> 00:27:52,560
Speaker 6: That vaccines are a good thing.

549
00:27:52,840 --> 00:27:55,919
Speaker 10: MMR is a good way of stopping measles, But they

550
00:27:55,920 --> 00:27:57,600
Speaker 10: don't say you got to go out there.

551
00:27:57,520 --> 00:27:59,280
Speaker 6: And get it. That's what's missing.

552
00:27:59,560 --> 00:28:01,480
Speaker 10: On the other hand, we also have an issue with

553
00:28:01,600 --> 00:28:06,160
Speaker 10: regards to what I feel like is a I don't

554
00:28:06,160 --> 00:28:09,080
Speaker 10: want to call it an attack, but an undermining of

555
00:28:09,160 --> 00:28:12,399
Speaker 10: research in areas which are infectious diseases, which I just

556
00:28:12,440 --> 00:28:16,480
Speaker 10: do not understand why a tuber closest expert would lose

557
00:28:16,520 --> 00:28:20,600
Speaker 10: their funding. These are not diseases that no virus has

558
00:28:20,640 --> 00:28:25,400
Speaker 10: been annihilated. Maybe smallpox, but I think if you think

559
00:28:25,400 --> 00:28:27,639
Speaker 10: about it, measles, we didn't have any debts.

560
00:28:27,640 --> 00:28:28,360
Speaker 6: We have them now.

561
00:28:28,560 --> 00:28:30,560
Speaker 10: As soon as you let your guard down a little bit,

562
00:28:31,040 --> 00:28:33,720
Speaker 10: it all explodes. So that is I am worried about

563
00:28:33,720 --> 00:28:36,720
Speaker 10: that because I love the United States, I love coming there,

564
00:28:36,920 --> 00:28:40,400
Speaker 10: and that is something that clearly is a worrisome aspect

565
00:28:40,400 --> 00:28:40,640
Speaker 10: for me.

566
00:28:40,840 --> 00:28:43,360
Speaker 2: Is it shared to any extent in Europe?

567
00:28:43,440 --> 00:28:44,840
Speaker 6: Sam Oh?

568
00:28:45,000 --> 00:28:50,560
Speaker 10: I mean, of course vaccine hesitancy isn't a specific US issue.

569
00:28:50,920 --> 00:28:53,080
Speaker 10: The thing is that what you don't want is that

570
00:28:53,120 --> 00:28:57,440
Speaker 10: hesitancy to be fed from top healthcare efficients.

571
00:28:57,720 --> 00:29:00,000
Speaker 6: Over Here we have that hesitancy.

572
00:29:00,120 --> 00:29:03,400
Speaker 10: Don't forget the person who put together the MMR study

573
00:29:03,480 --> 00:29:08,720
Speaker 10: for and the discredited MMR study and Autism Link is

574
00:29:08,720 --> 00:29:13,760
Speaker 10: a UK individual but that's been discredited. But the UK

575
00:29:14,840 --> 00:29:18,640
Speaker 10: government and health services have continued to push that this

576
00:29:18,800 --> 00:29:22,000
Speaker 10: is the best way to get folks protected.

577
00:29:23,240 --> 00:29:25,680
Speaker 6: So it's not. Hesitancy is not just a US issue,

578
00:29:25,680 --> 00:29:28,600
Speaker 6: it's everywhere. What you need is health officials to be pushing.

579
00:29:28,320 --> 00:29:30,960
Speaker 2: It our Thanks to Sam Fazelli, Bloomberg Intelligence, Director of

580
00:29:31,000 --> 00:29:33,920
Speaker 2: Research for Global Industries and senior pharmaceuticals analyst.

581
00:29:34,200 --> 00:29:35,760
Speaker 4: We move next to the banking sector.

582
00:29:36,000 --> 00:29:38,640
Speaker 2: Wells Fargo recently became the first bank to abandon its

583
00:29:38,680 --> 00:29:41,760
Speaker 2: climate goals as political sentiment in Washington, DC shifts.

584
00:29:41,880 --> 00:29:44,480
Speaker 4: The firm's abandonment of net zero finance and mission goals

585
00:29:44,480 --> 00:29:46,920
Speaker 4: puts around five times of one percent of its market

586
00:29:46,960 --> 00:29:49,600
Speaker 4: value held by ESG and climate funds at risk should

587
00:29:49,640 --> 00:29:51,480
Speaker 4: investors choose to divest.

588
00:29:51,200 --> 00:29:53,160
Speaker 2: And for more, we were joined by Shaheen Contract of

589
00:29:53,160 --> 00:29:57,080
Speaker 2: Bloomberg Intelligence. Senior ESG strategist refers to ask Shaheen for

590
00:29:57,120 --> 00:29:58,840
Speaker 2: more context on what Wells Fargo did.

591
00:29:59,120 --> 00:30:03,680
Speaker 11: So, wes Fargo abandoned its climate financing goal in particular,

592
00:30:03,720 --> 00:30:06,880
Speaker 11: So that's the emissions from its loan book. Typically it's

593
00:30:06,920 --> 00:30:10,680
Speaker 11: a much bigger emissions chunk than it's sort of operations.

594
00:30:10,680 --> 00:30:12,440
Speaker 11: So just to give you a sense of scale, it's

595
00:30:12,480 --> 00:30:15,760
Speaker 11: about let'ld say ninety five percent of its total emissions.

596
00:30:16,000 --> 00:30:19,640
Speaker 11: So that's what well Fago did. Other banks like HSBC

597
00:30:20,040 --> 00:30:23,920
Speaker 11: have delayed their operational emissions. Again that's about five percent,

598
00:30:23,960 --> 00:30:25,440
Speaker 11: So that's a much smaller piece.

599
00:30:25,680 --> 00:30:28,680
Speaker 4: So how do we distinguish between, you know, headlines where

600
00:30:28,680 --> 00:30:31,600
Speaker 4: it's like forgetting climate goals and just sort of changing

601
00:30:31,600 --> 00:30:33,640
Speaker 4: climate goals for some of these things.

602
00:30:33,760 --> 00:30:36,440
Speaker 11: Well, you have to dig in. I think it's the

603
00:30:36,520 --> 00:30:41,920
Speaker 11: difference is again that operation versus financed. It's not as

604
00:30:42,400 --> 00:30:45,600
Speaker 11: how do I say this as binary? Binary as like

605
00:30:45,720 --> 00:30:48,360
Speaker 11: diversity where they can dilute the language a little bit.

606
00:30:48,480 --> 00:30:50,000
Speaker 11: Carbon goales are either there or not there.

607
00:30:50,560 --> 00:30:51,800
Speaker 3: It is actually binary.

608
00:30:52,120 --> 00:30:54,479
Speaker 2: Are they walking away? Are they saying, we're not going

609
00:30:54,520 --> 00:30:58,560
Speaker 2: to restrict our lending to companies that have to fossil

610
00:30:58,560 --> 00:31:00,000
Speaker 2: fuel companies. We're not going to do that anyway.

611
00:31:00,080 --> 00:31:02,360
Speaker 11: Correct, So that's in a way what they're saying, because

612
00:31:02,640 --> 00:31:04,960
Speaker 11: what a finance goal would mean is we're going to

613
00:31:05,000 --> 00:31:07,360
Speaker 11: reduce the emissions small loone book from X to Z,

614
00:31:07,880 --> 00:31:11,320
Speaker 11: and that would probably come with reducing to these sectors.

615
00:31:11,800 --> 00:31:15,880
Speaker 2: Okay, now, what's JP Morgan, whatis City? What's Bank of America?

616
00:31:15,960 --> 00:31:16,160
Speaker 6: Said?

617
00:31:17,040 --> 00:31:21,400
Speaker 11: Nothing yet so far, so they have exited the nets

618
00:31:21,560 --> 00:31:25,600
Speaker 11: zero Alliance. That being said, they've still been on track

619
00:31:25,680 --> 00:31:28,920
Speaker 11: with their goals. They've still reduced to missions that is

620
00:31:28,960 --> 00:31:31,800
Speaker 11: in line with their targets. What's also interesting is West

621
00:31:31,800 --> 00:31:34,800
Speaker 11: Fago has also done that, but it's still abandoned its goals.

622
00:31:34,880 --> 00:31:36,800
Speaker 11: So what's to come We'll see.

623
00:31:36,560 --> 00:31:39,760
Speaker 4: What's interesting talking about abandoning goals like Airbus was just

624
00:31:39,800 --> 00:31:42,000
Speaker 4: saying that they still want to get to that net

625
00:31:42,120 --> 00:31:45,280
Speaker 4: zero by twenty fifty, but they're constrained by like infrastructure

626
00:31:45,360 --> 00:31:48,120
Speaker 4: and technology, et cetera. How much of that is wrapped

627
00:31:48,120 --> 00:31:50,640
Speaker 4: into the conversation, how much of that is aploaded not them?

628
00:31:51,240 --> 00:31:54,040
Speaker 11: So west Fago and his statement actually said that they

629
00:31:54,120 --> 00:31:57,520
Speaker 11: attribute this to changing custom behavior, to politics, to a

630
00:31:57,880 --> 00:32:02,120
Speaker 11: number of things. However, given that they're quite on track

631
00:32:02,200 --> 00:32:04,880
Speaker 11: to achieving this goal, which is also an analysis we've done,

632
00:32:04,960 --> 00:32:06,600
Speaker 11: we've attributed it to politics.

633
00:32:07,360 --> 00:32:09,960
Speaker 2: So the politics in the US are different from the

634
00:32:10,000 --> 00:32:14,480
Speaker 2: politics obviously in Europe for example. So are we seeing

635
00:32:14,520 --> 00:32:18,760
Speaker 2: any of the big European companies or sectors of companies

636
00:32:19,000 --> 00:32:23,480
Speaker 2: walk back some of the ESG goals so in a.

637
00:32:23,560 --> 00:32:27,320
Speaker 11: Much smaller way, yes, So again HSBC and UBS have

638
00:32:27,520 --> 00:32:31,600
Speaker 11: delayed their operational missions goal. Again, that's I would call

639
00:32:31,640 --> 00:32:34,800
Speaker 11: that almost insignificant for a bank. So they have the

640
00:32:34,840 --> 00:32:38,400
Speaker 11: bigger pieces of financed mission goals, which we'll see.

641
00:32:38,520 --> 00:32:41,160
Speaker 2: So if I'm a shareholder, if I'm an ESG fund

642
00:32:41,600 --> 00:32:43,960
Speaker 2: and I own Wells fargar, do I just sell my

643
00:32:44,000 --> 00:32:44,680
Speaker 2: position here?

644
00:32:45,040 --> 00:32:47,960
Speaker 11: So it could be at risk. Yes, I mean climate

645
00:32:48,200 --> 00:32:52,000
Speaker 11: is quite high up in ESG funds agenda, and we've

646
00:32:52,000 --> 00:32:55,480
Speaker 11: done the analysis. So for Wells Fargo, about zero point

647
00:32:55,640 --> 00:32:58,120
Speaker 11: five percent of its market value is held in these

648
00:32:58,360 --> 00:33:02,640
Speaker 11: ESG and climate funds. Honestly quite small, right, So the

649
00:33:02,760 --> 00:33:04,800
Speaker 11: risk lies in other more expost peers.

650
00:33:05,120 --> 00:33:07,040
Speaker 2: So just give me a sense once again. I know

651
00:33:07,080 --> 00:33:09,720
Speaker 2: we've gone over this number million times how much money

652
00:33:09,840 --> 00:33:11,760
Speaker 2: is in ESG funds roughly.

653
00:33:12,120 --> 00:33:14,760
Speaker 11: So if we look at ETFs, which is the analysis

654
00:33:14,800 --> 00:33:17,560
Speaker 11: I've done, it's about I would say, close to six

655
00:33:17,680 --> 00:33:18,880
Speaker 11: hundred billion.

656
00:33:19,000 --> 00:33:19,120
Speaker 6: Ok.

657
00:33:19,360 --> 00:33:21,320
Speaker 11: Now, let me go back. So I did this analysis

658
00:33:21,320 --> 00:33:23,880
Speaker 11: two years back. At that point, all ESG label funds

659
00:33:23,960 --> 00:33:26,280
Speaker 11: was about two point three trillion. So that's to give

660
00:33:26,280 --> 00:33:27,120
Speaker 11: you a sense of scale.

661
00:33:27,160 --> 00:33:31,880
Speaker 2: Now that's really fine in funds funds flowing out of ESG.

662
00:33:32,240 --> 00:33:34,640
Speaker 11: No, sorry, So I go back to the two point

663
00:33:34,640 --> 00:33:37,800
Speaker 11: three trillion number, which is all ESG funds. The atfs

664
00:33:37,800 --> 00:33:41,840
Speaker 11: are much smaller share, So I would say that we've

665
00:33:41,840 --> 00:33:43,880
Speaker 11: not done that analysis more recently, but it is two

666
00:33:43,920 --> 00:33:46,480
Speaker 11: point three trillion is quite large substantial share.

667
00:33:46,680 --> 00:33:46,880
Speaker 6: Yep.

668
00:33:47,200 --> 00:33:50,560
Speaker 4: When you talk about the amount of assets that are

669
00:33:50,560 --> 00:33:53,680
Speaker 4: in broader funds, not just ETFs, which is broader funds.

670
00:33:53,760 --> 00:33:55,960
Speaker 3: What the numbers that we're talking about here, So that.

671
00:33:55,960 --> 00:33:58,240
Speaker 11: Will be the two point three trillion that I mentioned.

672
00:33:58,240 --> 00:34:01,120
Speaker 11: So this is all funds with words, yes, she climate,

673
00:34:01,320 --> 00:34:01,760
Speaker 11: et cetera.

674
00:34:01,920 --> 00:34:02,560
Speaker 3: Yeah.

675
00:34:02,600 --> 00:34:05,120
Speaker 11: I would say a lot of those funds are changing names, so.

676
00:34:05,720 --> 00:34:07,040
Speaker 4: Okay, so we don't know if they're going to be

677
00:34:07,120 --> 00:34:08,759
Speaker 4: labeled that later on down the road.

678
00:34:08,800 --> 00:34:11,840
Speaker 3: Okay, okay, what's your biggest call for this industry for

679
00:34:11,880 --> 00:34:12,239
Speaker 3: this year?

680
00:34:12,239 --> 00:34:13,560
Speaker 4: Like, what do you think the biggest change is going

681
00:34:13,640 --> 00:34:13,799
Speaker 4: to be?

682
00:34:14,040 --> 00:34:16,640
Speaker 11: I think, given the recent headlines, I think a lot

683
00:34:16,680 --> 00:34:19,600
Speaker 11: of it is divestment tists, which I don't think people realize.

684
00:34:19,640 --> 00:34:22,360
Speaker 11: I don't think people realize ESG investor base that is

685
00:34:22,360 --> 00:34:24,880
Speaker 11: in a company. So if a company is like State Street,

686
00:34:24,920 --> 00:34:25,920
Speaker 11: for example.

687
00:34:25,560 --> 00:34:26,040
Speaker 6: They've.

688
00:34:27,400 --> 00:34:31,000
Speaker 11: Acts the diversity policyes the example, and three percent, well

689
00:34:31,560 --> 00:34:34,040
Speaker 11: up to three percent of their investor base is actually

690
00:34:34,080 --> 00:34:39,000
Speaker 11: in ESG funds. So I would say that's quite an exposure.

691
00:34:38,920 --> 00:34:44,200
Speaker 4: Our Thanks to Shieting contractor, Bloomberg Intelligence senior ESG strategist.

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00:34:43,400 --> 00:34:48,080
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693
00:34:48,280 --> 00:34:51,759
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00:34:55,640 --> 00:34:59,200
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