1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you. 2 00:00:05,360 --> 00:00:07,680 Speaker 1: Along with my co host Lisa Brahma wits. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:21,040 Speaker 1: at Bloomberg dot com. Here we are again today, more 8 00:00:21,280 --> 00:00:23,560 Speaker 1: green on the screen. What else is knew? This has 9 00:00:23,600 --> 00:00:26,400 Speaker 1: been a fantastic year for risk assets, whether you're looking 10 00:00:26,440 --> 00:00:30,040 Speaker 1: at equities, investment grade, high yield, even municipal bonds having 11 00:00:30,080 --> 00:00:33,120 Speaker 1: a fantastic performance this year. The question obviously now turns 12 00:00:33,159 --> 00:00:35,959 Speaker 1: to what do we do? Marvin low are good friend, 13 00:00:36,080 --> 00:00:39,360 Speaker 1: senior global macro strategist for State Street uh joins us 14 00:00:39,360 --> 00:00:41,920 Speaker 1: here on our Bloomberg Interactive Broker Studio. So, Marvin, I 15 00:00:41,920 --> 00:00:43,879 Speaker 1: guess the question is for a lot of investors is 16 00:00:43,920 --> 00:00:47,040 Speaker 1: even if I look at the market's performance in versus 17 00:00:47,320 --> 00:00:50,440 Speaker 1: say the peak in September last year, I forget about 18 00:00:50,440 --> 00:00:53,680 Speaker 1: the return in tu we had that big swoon in December. 19 00:00:53,840 --> 00:00:56,560 Speaker 1: I'm still up double digits from that peak to peak. 20 00:00:57,160 --> 00:00:59,680 Speaker 1: What do I do in do I pull some risk 21 00:00:59,840 --> 00:01:02,480 Speaker 1: off the table where I just kind of keep everything 22 00:01:02,520 --> 00:01:04,760 Speaker 1: in the game. You know what, UM, I think the 23 00:01:04,760 --> 00:01:07,360 Speaker 1: animal spirits are pretty strong. UM. You know, I think 24 00:01:07,440 --> 00:01:11,559 Speaker 1: what we've seen is that um our worst fears about 25 00:01:11,640 --> 00:01:15,039 Speaker 1: growth UM certainly didn't come to fruition. And if anything, 26 00:01:15,240 --> 00:01:18,280 Speaker 1: we're entering with a little bit more clarity than we 27 00:01:18,319 --> 00:01:20,680 Speaker 1: had in the middle of the year. So UM, I think. 28 00:01:20,760 --> 00:01:23,680 Speaker 1: I think UM steady as she goes is a decent 29 00:01:23,840 --> 00:01:26,600 Speaker 1: way to look at the start of at this point, 30 00:01:26,640 --> 00:01:29,319 Speaker 1: and I don't see much to shake that apple cart 31 00:01:29,600 --> 00:01:31,720 Speaker 1: at this point. The still a lot of risk out there, 32 00:01:31,959 --> 00:01:34,800 Speaker 1: but we've really taken a lot of the biggest concerns 33 00:01:34,800 --> 00:01:36,880 Speaker 1: off the table. I think one of the biggest issues, 34 00:01:36,880 --> 00:01:39,040 Speaker 1: as you and I were talking before the segment that 35 00:01:39,680 --> 00:01:42,840 Speaker 1: really kind of a year ago today, what was spooking 36 00:01:42,880 --> 00:01:45,040 Speaker 1: the market where a number of factors, but probably first 37 00:01:45,080 --> 00:01:47,199 Speaker 1: and foremost was the FED. And it was in a 38 00:01:47,280 --> 00:01:51,240 Speaker 1: you know, hiking mode here. What is your expectation for 39 00:01:51,280 --> 00:01:54,760 Speaker 1: the FED here as we go through? Yeah, you know what, UM, 40 00:01:55,000 --> 00:01:57,000 Speaker 1: And I think that I think kind of the outlook 41 00:01:57,080 --> 00:01:59,120 Speaker 1: for the FED as well as kind of the Central 42 00:01:59,160 --> 00:02:02,760 Speaker 1: Bank contingent to you will UM is supportive of this market. Ultimately, 43 00:02:02,800 --> 00:02:07,200 Speaker 1: it's asymmetric. UM. They have for the most part set 44 00:02:07,200 --> 00:02:11,080 Speaker 1: a pretty high bar in terms of cutting UM. Additionally, 45 00:02:11,120 --> 00:02:13,360 Speaker 1: but they said that they're certainly watching everything. But the 46 00:02:13,400 --> 00:02:15,800 Speaker 1: bar I think is even higher for hiking UM. And 47 00:02:15,800 --> 00:02:17,600 Speaker 1: I think that not only is true for the FED, 48 00:02:17,639 --> 00:02:19,680 Speaker 1: but it's true for a lot of central banks around 49 00:02:19,760 --> 00:02:22,600 Speaker 1: the world, which gives investors, you know, a little bit 50 00:02:22,639 --> 00:02:24,400 Speaker 1: of a tail when when you don't have to worry 51 00:02:24,400 --> 00:02:27,200 Speaker 1: about the risk UM. Clearly that we saw at the 52 00:02:27,360 --> 00:02:31,000 Speaker 1: end of eighteen from an overly aggressive hiking cycle. Okay, 53 00:02:31,000 --> 00:02:35,200 Speaker 1: so we have global central banks generally in an easing mode. 54 00:02:35,600 --> 00:02:38,120 Speaker 1: Uh jeeus, we got negative interest rates quite frankly a 55 00:02:38,160 --> 00:02:41,200 Speaker 1: number of the big markets around the world. What asset 56 00:02:41,240 --> 00:02:43,600 Speaker 1: classes should I be thinking about now, given that I 57 00:02:43,639 --> 00:02:46,600 Speaker 1: am ten or eleven years into this economics cycle. Do 58 00:02:46,720 --> 00:02:50,440 Speaker 1: I equities, investment grade, high emerging markets? How do I 59 00:02:50,440 --> 00:02:52,120 Speaker 1: think about it? Yeah? You know, so, so I think 60 00:02:52,120 --> 00:02:54,360 Speaker 1: interest rates are going to remain low. Um. You know, 61 00:02:54,400 --> 00:02:56,760 Speaker 1: I'm not in the camp that we're gonna all of 62 00:02:56,800 --> 00:02:59,239 Speaker 1: a sudden reinflate to a three to four percent tenure 63 00:02:59,280 --> 00:03:01,320 Speaker 1: in the US. So if we kind of are looking 64 00:03:01,360 --> 00:03:03,760 Speaker 1: at rates somewhere around here, I think the reach for 65 00:03:03,840 --> 00:03:06,760 Speaker 1: yield still UM is strong. Uh, there is a lot 66 00:03:06,760 --> 00:03:08,880 Speaker 1: of cash on the sidelines, so I think that that 67 00:03:08,919 --> 00:03:13,280 Speaker 1: makes its way back into risk assets equities UM. Despite valuations, 68 00:03:13,520 --> 00:03:17,160 Speaker 1: UM continue to look attractive. But I also even like 69 00:03:17,200 --> 00:03:18,800 Speaker 1: credit in this in this market, I think you have 70 00:03:18,840 --> 00:03:21,160 Speaker 1: to reach for it UM. I don't think that it's 71 00:03:21,200 --> 00:03:23,280 Speaker 1: as you know, certainly the a lot of the low 72 00:03:23,320 --> 00:03:25,480 Speaker 1: hanging food has been picked this year UM, but you know, 73 00:03:25,520 --> 00:03:28,600 Speaker 1: people demographics are still going to need that income. So 74 00:03:28,840 --> 00:03:31,200 Speaker 1: that leads me to UM, to high yield to a 75 00:03:31,200 --> 00:03:33,400 Speaker 1: certain degree, and it doesn't lead me to EM particularly 76 00:03:33,400 --> 00:03:35,640 Speaker 1: if we see a more stable environment when it comes 77 00:03:35,680 --> 00:03:38,040 Speaker 1: to the FX market. All right, let's start with kind 78 00:03:38,080 --> 00:03:41,680 Speaker 1: of the riskier side of the credit markets, high yield 79 00:03:41,760 --> 00:03:45,120 Speaker 1: leverage loans. There's been some concern that you know, maybe 80 00:03:45,200 --> 00:03:47,880 Speaker 1: credit quality starting to get a little tepid or certainly 81 00:03:48,160 --> 00:03:50,280 Speaker 1: let's just start with the evaluation that high yield has 82 00:03:50,280 --> 00:03:52,560 Speaker 1: had a great run here, that yields of titan do 83 00:03:52,600 --> 00:03:54,440 Speaker 1: you have to be really selective and how yield are 84 00:03:54,440 --> 00:03:57,000 Speaker 1: There's certain sectors you have to focus on or can 85 00:03:57,000 --> 00:03:59,480 Speaker 1: you just kind of have a ladder across high yield. Yeah. No, 86 00:03:59,640 --> 00:04:01,360 Speaker 1: I think you have to be more selective this year, 87 00:04:01,400 --> 00:04:03,240 Speaker 1: and and and next year, I should say, but even 88 00:04:03,240 --> 00:04:06,120 Speaker 1: this year you needed to be selective. Triple C certainly underperformed, 89 00:04:06,160 --> 00:04:10,120 Speaker 1: the leverage loans certainly underperformed. So there were recession risk 90 00:04:10,320 --> 00:04:12,880 Speaker 1: um that we're building, and I think that remains out 91 00:04:12,880 --> 00:04:15,200 Speaker 1: there given that work. Like you said, we're eleven years 92 00:04:15,520 --> 00:04:19,080 Speaker 1: into this expansion um. Having said that, the fact that 93 00:04:19,200 --> 00:04:21,520 Speaker 1: we're pushing recession concerns you know a little bit in 94 00:04:21,520 --> 00:04:24,520 Speaker 1: the future. Again, an active central bank kind of keeps 95 00:04:24,520 --> 00:04:27,680 Speaker 1: those recession concerns at bay. You could get into that 96 00:04:27,760 --> 00:04:31,000 Speaker 1: single B category and start picking your way around it 97 00:04:31,360 --> 00:04:34,800 Speaker 1: because it would take a recession um to really push 98 00:04:34,880 --> 00:04:38,080 Speaker 1: that into kind of the more bankruptcy bankruptcy type concern. 99 00:04:38,320 --> 00:04:41,719 Speaker 1: You certainly can get um spread widening, but in terms 100 00:04:41,720 --> 00:04:44,960 Speaker 1: of cutting coupons at about five, you know, it sounds 101 00:04:44,960 --> 00:04:47,000 Speaker 1: pretty good. It does. I think a lot of people 102 00:04:47,040 --> 00:04:49,080 Speaker 1: would take that. This year have an emerging markets that's 103 00:04:49,080 --> 00:04:53,040 Speaker 1: an area that's chronically underperformed, and uh, I'm wondering an 104 00:04:53,040 --> 00:04:55,800 Speaker 1: accescenario or maybe we do get some phase one kind 105 00:04:55,800 --> 00:04:58,520 Speaker 1: of trade deal. Tensions kind of pulled back a little 106 00:04:58,520 --> 00:05:00,520 Speaker 1: bit in terms of global trade. Can E I'm finally 107 00:05:00,800 --> 00:05:04,279 Speaker 1: perform UM E M E M as as an asset 108 00:05:04,279 --> 00:05:08,479 Speaker 1: class is always tricky because it encompasses so much UM. 109 00:05:08,520 --> 00:05:11,120 Speaker 1: I think by definition you have to be choosing. You 110 00:05:11,160 --> 00:05:13,480 Speaker 1: have to kind of know what the underlying aspects of 111 00:05:13,600 --> 00:05:16,280 Speaker 1: UM each one of those countries economies are. But having 112 00:05:16,279 --> 00:05:18,440 Speaker 1: said that, I do think again, going back to this 113 00:05:18,520 --> 00:05:22,560 Speaker 1: lower interest rate environment, potentially less volatility will put you 114 00:05:22,600 --> 00:05:27,840 Speaker 1: into certain UM em carry trades where uh you know, uh, 115 00:05:27,960 --> 00:05:30,119 Speaker 1: I guess the risk of kind of going into em 116 00:05:30,200 --> 00:05:33,080 Speaker 1: unheedged is certainly well known. But if you don't have 117 00:05:33,160 --> 00:05:36,080 Speaker 1: volatility and you're and you are able to UM clip 118 00:05:36,120 --> 00:05:38,839 Speaker 1: those local currency coupons, uh, it's something that you should 119 00:05:38,839 --> 00:05:42,040 Speaker 1: think about real quickly. Trade deal. It seems like we're 120 00:05:42,040 --> 00:05:45,080 Speaker 1: moving towards a phase one type of deal. How important 121 00:05:45,120 --> 00:05:48,159 Speaker 1: is that to the market UM. I don't think it's 122 00:05:48,160 --> 00:05:50,679 Speaker 1: that important because I think most of it's priced in already. 123 00:05:51,120 --> 00:05:54,640 Speaker 1: I think that ultimately what UM is important for the 124 00:05:54,720 --> 00:05:58,359 Speaker 1: data is if it gets companies comfortable in terms of 125 00:05:58,360 --> 00:06:01,479 Speaker 1: starting to reinvest. You know, I think at was a 126 00:06:01,560 --> 00:06:04,760 Speaker 1: challenge given how massive the cross winds around trade were. 127 00:06:05,200 --> 00:06:07,400 Speaker 1: If we actually get to a point where some of 128 00:06:07,440 --> 00:06:10,680 Speaker 1: the tensions um reduce and we move more towards an 129 00:06:10,680 --> 00:06:13,440 Speaker 1: election kind of environment where we don't have as many headlines, 130 00:06:13,800 --> 00:06:16,919 Speaker 1: businesses um very well could start to invest in a 131 00:06:16,920 --> 00:06:19,560 Speaker 1: way that they haven't, and then that just provides additional 132 00:06:19,560 --> 00:06:22,640 Speaker 1: tail winto what seems to be a fairly strong consumer. Hey, Marvin, 133 00:06:22,680 --> 00:06:24,599 Speaker 1: thanks so much for joining us. I appreciate you coming 134 00:06:24,600 --> 00:06:27,880 Speaker 1: in here. Marvin Lowe, senior global macro strategist for states 135 00:06:27,920 --> 00:06:29,960 Speaker 1: Re based on Boston, but joining us here in his 136 00:06:30,000 --> 00:06:33,720 Speaker 1: Bloomberg eleven three oh studio with his faithful sidekick as well, 137 00:06:33,920 --> 00:06:36,279 Speaker 1: sitting in here in the studio forward. We appreciate you, Marvin, 138 00:06:36,320 --> 00:06:52,560 Speaker 1: coming in with your thoughts. Well, it has been a 139 00:06:52,680 --> 00:06:55,440 Speaker 1: fantastic year for risk assets. You need take a one 140 00:06:55,560 --> 00:06:57,880 Speaker 1: take a look at one of the riskier stocks out there, 141 00:06:57,880 --> 00:07:00,320 Speaker 1: one of the more volatile stocks out there, Tesla. It's 142 00:07:00,440 --> 00:07:04,000 Speaker 1: really an interesting tape. The stock is up thirty percent 143 00:07:04,120 --> 00:07:05,640 Speaker 1: year to date, but when you take a look from 144 00:07:05,640 --> 00:07:08,719 Speaker 1: it's June low it's up a hundred and forty. There's 145 00:07:08,720 --> 00:07:10,520 Speaker 1: a time back in June where it looked like the 146 00:07:10,560 --> 00:07:13,880 Speaker 1: Bears were finally getting their due, but they've been punished 147 00:07:13,920 --> 00:07:16,080 Speaker 1: since then again a stock up hundred forty percent off 148 00:07:16,120 --> 00:07:18,160 Speaker 1: that June low. To get a sense of what comes next, 149 00:07:18,200 --> 00:07:20,240 Speaker 1: we welcome to good friend Dan Ives. He's a managing 150 00:07:20,280 --> 00:07:24,240 Speaker 1: director equity research for Webush Securities. Is also a Penn 151 00:07:24,320 --> 00:07:27,080 Speaker 1: State Nitney Lion alumnus. We will talk about the Cotton 152 00:07:27,120 --> 00:07:29,800 Speaker 1: Bowl coming up, certainly, but Dan, let's start with Tesla. 153 00:07:30,440 --> 00:07:33,680 Speaker 1: What's your make here of this company? This stock? It 154 00:07:33,720 --> 00:07:37,240 Speaker 1: has been all over the map in Yeah. I mean, look, 155 00:07:37,240 --> 00:07:39,560 Speaker 1: there were some dark days earlier this year and it 156 00:07:39,600 --> 00:07:42,040 Speaker 1: really came down to demand in the US that was 157 00:07:42,080 --> 00:07:44,960 Speaker 1: starting to wayne. And you've got to give Musk and 158 00:07:45,080 --> 00:07:48,080 Speaker 1: Testler credit. I mean, you've seen a rebound in Europe. 159 00:07:48,800 --> 00:07:51,920 Speaker 1: The China growth story now looks to be alive and 160 00:07:52,000 --> 00:07:55,880 Speaker 1: well with gig at three and the most importantly positability, 161 00:07:55,960 --> 00:07:59,120 Speaker 1: and that sort of combination has caused not just a 162 00:07:59,160 --> 00:08:02,720 Speaker 1: massive would squeeze, but I think right now starting to 163 00:08:02,840 --> 00:08:06,560 Speaker 1: maybe see a real turnaround going. All right, So let's 164 00:08:06,560 --> 00:08:09,720 Speaker 1: start with the production side first. That's always been a 165 00:08:09,720 --> 00:08:12,960 Speaker 1: concern here. Yes, it's a great technology, it's a great car, 166 00:08:13,680 --> 00:08:16,360 Speaker 1: um but can they ever built it at scale on 167 00:08:16,400 --> 00:08:18,800 Speaker 1: a profitable basis? Do we have any more color there? 168 00:08:20,280 --> 00:08:22,600 Speaker 1: I think right now that's why Gigga three is so 169 00:08:22,680 --> 00:08:27,000 Speaker 1: important in terms of China because from production standpoint, that 170 00:08:27,280 --> 00:08:32,559 Speaker 1: along with Europe, could really significantly incuruse production and actually 171 00:08:32,600 --> 00:08:36,360 Speaker 1: get them to maybe susteem possibility. And to your point, 172 00:08:36,400 --> 00:08:39,720 Speaker 1: it's been a one step forward, two step backstory for 173 00:08:39,760 --> 00:08:42,240 Speaker 1: a number of years. Now it feels like maybe they're 174 00:08:42,240 --> 00:08:44,719 Speaker 1: starting to finally turn the corner. And that's what you're 175 00:08:44,720 --> 00:08:47,360 Speaker 1: seeing with the stock. I mean, it's a massive rerating 176 00:08:47,840 --> 00:08:50,560 Speaker 1: that's starting to happen because not just the demand but 177 00:08:50,720 --> 00:08:54,679 Speaker 1: the production capacity with Giga for three front and center. 178 00:08:55,160 --> 00:08:57,800 Speaker 1: Do we have a sense of let' let's switch to 179 00:08:57,800 --> 00:09:00,760 Speaker 1: that demand story because for a while they're just as 180 00:09:00,760 --> 00:09:03,800 Speaker 1: a late person watching this stock, I never doubted the 181 00:09:03,880 --> 00:09:06,800 Speaker 1: demand story because it was just again such a great car, 182 00:09:06,920 --> 00:09:09,760 Speaker 1: great technology, so much ahead of everybody else. But then 183 00:09:09,760 --> 00:09:12,959 Speaker 1: there really was uh some concern about you know, what's 184 00:09:13,040 --> 00:09:16,360 Speaker 1: really the demand for electric cars out there? What's your 185 00:09:16,360 --> 00:09:19,760 Speaker 1: sense of kind of the market demand for this test 186 00:09:19,800 --> 00:09:24,520 Speaker 1: Tesla product? Damon look right now? E V two percent 187 00:09:24,679 --> 00:09:28,400 Speaker 1: overall automobile sold and we we think that could be 188 00:09:28,440 --> 00:09:31,640 Speaker 1: seven percent in the next four or five years. You know, 189 00:09:31,760 --> 00:09:35,000 Speaker 1: last strong demand from Model three, especially on the price points. 190 00:09:35,040 --> 00:09:37,120 Speaker 1: So if you look at action act those are higher 191 00:09:37,160 --> 00:09:40,640 Speaker 1: and price points Model three demands strong. Look right now, 192 00:09:40,760 --> 00:09:45,720 Speaker 1: it looks like sustainably four to four hundred fifty thousand units. 193 00:09:45,720 --> 00:09:48,600 Speaker 1: That might be the line to stand going forward in 194 00:09:48,720 --> 00:09:50,880 Speaker 1: terms of what pastor can see in terms of demand. 195 00:09:51,160 --> 00:09:53,920 Speaker 1: But now it's going global and that's the key Europe 196 00:09:54,000 --> 00:09:57,400 Speaker 1: in China, that's key of the growth story. I'm actually 197 00:09:57,400 --> 00:09:59,280 Speaker 1: a little bit surprised again as a late person, not 198 00:09:59,440 --> 00:10:04,000 Speaker 1: seeing a more concerted effort in the EV market from 199 00:10:04,280 --> 00:10:08,439 Speaker 1: uh some of the existing auto manufacturers. Are you surprised 200 00:10:08,440 --> 00:10:12,000 Speaker 1: that we haven't seen a bigger production and marketing push 201 00:10:12,040 --> 00:10:15,160 Speaker 1: into this space. Yeah, I think it's sort of been 202 00:10:15,200 --> 00:10:17,320 Speaker 1: a toe in the water. I mean, you've seen obviously 203 00:10:17,440 --> 00:10:22,240 Speaker 1: BMW and PORES and and GM and forward go after 204 00:10:22,320 --> 00:10:24,480 Speaker 1: the market, but right now it's really been test last 205 00:10:24,600 --> 00:10:27,600 Speaker 1: where they've sort of built the big mode. I think 206 00:10:27,600 --> 00:10:29,720 Speaker 1: a lot of it comes down to price points and 207 00:10:29,760 --> 00:10:32,440 Speaker 1: overall demand, and I think you're gonna start to see 208 00:10:32,480 --> 00:10:35,560 Speaker 1: that stepped up in terms of the e V push 209 00:10:35,640 --> 00:10:38,920 Speaker 1: over the coming years that goes global, but I think 210 00:10:38,960 --> 00:10:42,040 Speaker 1: it has been slower than expected, and I think that's 211 00:10:42,080 --> 00:10:45,800 Speaker 1: something where you'll see a lot more competition going for 212 00:10:46,160 --> 00:10:48,160 Speaker 1: this area of the market where I think you know, 213 00:10:48,280 --> 00:10:51,560 Speaker 1: ultimately e V sALS probably double over the next three 214 00:10:51,600 --> 00:10:56,679 Speaker 1: to four years. Interesting. Yeah, it's is the product advancing 215 00:10:56,679 --> 00:10:59,040 Speaker 1: in terms of quality, in terms of like maybe you know, 216 00:10:59,160 --> 00:11:01,640 Speaker 1: distance and so on, and so where there's a reliability 217 00:11:02,040 --> 00:11:05,960 Speaker 1: improving because again we know the technology is really cool. Yeah, 218 00:11:06,040 --> 00:11:11,319 Speaker 1: but but it really comes down to with stable gas prices. 219 00:11:11,360 --> 00:11:15,240 Speaker 1: That's ultimately actually been a negative really for t V 220 00:11:15,400 --> 00:11:20,439 Speaker 1: shouse and I think that's something where Pesto's obviously been 221 00:11:20,440 --> 00:11:24,520 Speaker 1: the one that's really benefit from overall EV and if 222 00:11:24,559 --> 00:11:27,280 Speaker 1: you look in the U S, e D has trailed 223 00:11:27,400 --> 00:11:30,000 Speaker 1: Europe and others. Now the beat A lot of big 224 00:11:30,040 --> 00:11:32,760 Speaker 1: growth's gonna be China. That's why Tessa has been so 225 00:11:32,920 --> 00:11:35,880 Speaker 1: big on the Giggas three build out there, which they're 226 00:11:35,920 --> 00:11:39,480 Speaker 1: factory in Shanghai, as well as overall demand China, and 227 00:11:39,559 --> 00:11:44,440 Speaker 1: that's how you either have a five stock or two 228 00:11:44,480 --> 00:11:46,840 Speaker 1: to two fifty and so much of that is going 229 00:11:46,920 --> 00:11:51,360 Speaker 1: to be relying on the China growth story. All right, Dan, 230 00:11:51,440 --> 00:11:54,439 Speaker 1: let's switch gears Penn State football going up against the 231 00:11:54,480 --> 00:11:56,839 Speaker 1: University of Memphis in the cotton Ball Friday Night. You're 232 00:11:56,960 --> 00:12:01,280 Speaker 1: proud p s U alumnus what you're called there? Yeah? 233 00:12:01,320 --> 00:12:06,360 Speaker 1: I think Penn State by ten. I think fundamentally, you know, 234 00:12:06,440 --> 00:12:09,280 Speaker 1: this continues to be one that uh it's gonna be 235 00:12:09,320 --> 00:12:11,839 Speaker 1: all Penn State. And just given that offense that they 236 00:12:11,840 --> 00:12:15,199 Speaker 1: have to be comprom Memphis to stay with them excellent. 237 00:12:15,240 --> 00:12:17,240 Speaker 1: I'm I'm not an alumni, but I just I write 238 00:12:17,280 --> 00:12:19,560 Speaker 1: tuition checks the Penn State. So I've become a de 239 00:12:19,640 --> 00:12:22,080 Speaker 1: facto fan um so I will be rooting for Penn 240 00:12:22,080 --> 00:12:24,040 Speaker 1: State as well. Dan, I thanks so much for joining us. 241 00:12:24,200 --> 00:12:28,080 Speaker 1: Dan's I'm managing director Equity research at Wedbush Securities talking 242 00:12:28,120 --> 00:12:30,400 Speaker 1: to us about Tesla. He's got a hold on the stock, 243 00:12:30,440 --> 00:12:33,440 Speaker 1: but it sounds like he's getting a little bit more 244 00:12:33,520 --> 00:12:36,440 Speaker 1: upbeat about the story and is as Dan was mentioning, 245 00:12:36,480 --> 00:12:39,439 Speaker 1: the big probably the next big catalyst for the stock 246 00:12:39,559 --> 00:12:42,560 Speaker 1: one way or the other is China. Can they produce 247 00:12:42,640 --> 00:12:46,040 Speaker 1: cars in China profitably? What is the demand for the 248 00:12:46,080 --> 00:13:05,360 Speaker 1: Tesla product in China? You know, I eat out a 249 00:13:05,360 --> 00:13:08,920 Speaker 1: lot full disclosure, a lot of restaurants. Um. I always 250 00:13:08,920 --> 00:13:10,520 Speaker 1: think that every time I got the restaurant seemed pretty 251 00:13:10,520 --> 00:13:13,040 Speaker 1: packed in me. But our next guest, Mike Halen, senior 252 00:13:13,080 --> 00:13:15,679 Speaker 1: restaurant anals Bloomberg Intelligence, joining us here in a Bloomberg 253 00:13:15,720 --> 00:13:19,080 Speaker 1: Interactor broker studio. He says, might be a tough year 254 00:13:19,240 --> 00:13:22,800 Speaker 1: for restaurants. So what's your thoughts about the restaurant business 255 00:13:22,920 --> 00:13:24,120 Speaker 1: right now? Mike? What are you seeing out there in 256 00:13:24,120 --> 00:13:26,920 Speaker 1: the marketplace. Well, this has been a pretty good year, 257 00:13:27,160 --> 00:13:31,280 Speaker 1: you know, um, in general. So so the um, you know, 258 00:13:31,360 --> 00:13:34,000 Speaker 1: fast food chains have done pretty well. Most of it, 259 00:13:34,040 --> 00:13:36,520 Speaker 1: THO has been done through price increases. I mean those 260 00:13:36,640 --> 00:13:39,280 Speaker 1: we know, those are you know, unsustainable because as as 261 00:13:39,360 --> 00:13:42,240 Speaker 1: you continue to raise prices, eventually the lower income and 262 00:13:42,280 --> 00:13:44,719 Speaker 1: middle income consumers are gonna start to pull back a 263 00:13:44,760 --> 00:13:46,439 Speaker 1: little bit, maybe shop a little bit more at the 264 00:13:46,440 --> 00:13:50,080 Speaker 1: grocery store. Um. The other thing is casual dining. So 265 00:13:50,120 --> 00:13:53,400 Speaker 1: casual dining had a tough nineteen and we think that's 266 00:13:53,440 --> 00:13:56,760 Speaker 1: going to continue in they're seeing a lot of competition 267 00:13:56,800 --> 00:14:01,400 Speaker 1: from independent chains, fast casual chains, grocery stores that are 268 00:14:01,400 --> 00:14:05,559 Speaker 1: picking up there. They're in store food experience, whether it's 269 00:14:05,559 --> 00:14:09,719 Speaker 1: grab and grow, um, you know, hot food, pick up, 270 00:14:10,480 --> 00:14:15,360 Speaker 1: you name it. So a lot of competition there, um, 271 00:14:15,400 --> 00:14:18,000 Speaker 1: you know. And then also we're going to see breakfast 272 00:14:18,000 --> 00:14:20,840 Speaker 1: wars breakfast fast food first coming in now with somebody's 273 00:14:20,880 --> 00:14:22,880 Speaker 1: coming in with the breakfast. Yeah, Wendy's is coming in. 274 00:14:22,920 --> 00:14:25,520 Speaker 1: So they were breakfast before. They were not. They failed 275 00:14:25,680 --> 00:14:28,360 Speaker 1: three times prior, so why is this what's gonna be 276 00:14:28,360 --> 00:14:31,800 Speaker 1: different this time? So it's interesting. I think part of 277 00:14:31,840 --> 00:14:34,520 Speaker 1: the problem has been they've just been in locations that 278 00:14:34,560 --> 00:14:37,760 Speaker 1: are better for uh, lunch and dinner right there on 279 00:14:37,800 --> 00:14:40,680 Speaker 1: your drive home when you're driving home after work. But 280 00:14:40,680 --> 00:14:42,760 Speaker 1: aren't they always in the same or similar spot than 281 00:14:42,920 --> 00:14:47,040 Speaker 1: McDonald's are burger King typically, but sometimes on the opposite 282 00:14:47,040 --> 00:14:48,720 Speaker 1: side of the street, which when you have to make 283 00:14:48,720 --> 00:14:52,400 Speaker 1: a U turn on you know, Room East and then 284 00:14:52,560 --> 00:14:54,600 Speaker 1: you know, make another you turn to make your way 285 00:14:55,520 --> 00:14:57,800 Speaker 1: and that's that's a that's a big change. So we 286 00:14:57,880 --> 00:14:59,560 Speaker 1: think that's part of the reason why it's failed in 287 00:14:59,560 --> 00:15:01,920 Speaker 1: the past. Management talks about how they had a whole 288 00:15:01,920 --> 00:15:05,240 Speaker 1: lot of um items on the menu before and it 289 00:15:05,360 --> 00:15:08,360 Speaker 1: was just hard to execute, uh, and it caused you know, 290 00:15:08,560 --> 00:15:10,480 Speaker 1: it caused them to need a lot of labor in 291 00:15:10,520 --> 00:15:13,320 Speaker 1: the restaurant, so now they're doing a more limited menu. 292 00:15:13,440 --> 00:15:15,840 Speaker 1: It's only going to be available through the drive through. 293 00:15:15,880 --> 00:15:18,440 Speaker 1: There's only gonna be two or three employees in the store, 294 00:15:18,600 --> 00:15:21,920 Speaker 1: so labor costs aren't gonna skyrocket. So they think for 295 00:15:21,960 --> 00:15:24,240 Speaker 1: all those reasons, it's gonna work this time. And they're 296 00:15:24,240 --> 00:15:28,000 Speaker 1: doing a national launch in January. But everyone knows this. 297 00:15:28,240 --> 00:15:30,000 Speaker 1: You know, twenty nine team is a big year for 298 00:15:30,000 --> 00:15:32,440 Speaker 1: Burger King. They said, you know, breakfast is only fifteen 299 00:15:32,480 --> 00:15:36,720 Speaker 1: percent of our sales McDonald's. We want to close that gap. 300 00:15:36,800 --> 00:15:39,800 Speaker 1: So they've been improving their offerings and well, that's been 301 00:15:39,800 --> 00:15:42,080 Speaker 1: a big, big positive for the McDonald's story over the 302 00:15:42,120 --> 00:15:44,640 Speaker 1: last seven years, is the breast breakfast menu, all day, 303 00:15:44,920 --> 00:15:47,320 Speaker 1: all day breakfast for sure, and that's been a positive, right, 304 00:15:47,800 --> 00:15:50,040 Speaker 1: traffic a very big positive for them. And then they're 305 00:15:50,080 --> 00:15:54,200 Speaker 1: also rolling out Chicken in January, so you know, everybody's 306 00:15:54,240 --> 00:15:59,440 Speaker 1: gonna be fighting very fiercely, uh in January for breakfast share. 307 00:15:59,480 --> 00:16:03,040 Speaker 1: In January is when the the advertisements and the value 308 00:16:03,120 --> 00:16:05,600 Speaker 1: offerings are at their peak, because most people come out 309 00:16:05,640 --> 00:16:07,800 Speaker 1: of the new year saying, you know, a new media, 310 00:16:07,800 --> 00:16:09,840 Speaker 1: I'm going to the gym. I'm gonna eat healthier, I'm 311 00:16:09,840 --> 00:16:12,520 Speaker 1: not gonna eat at McDonald's and Wendy's. So, you know, 312 00:16:12,600 --> 00:16:15,680 Speaker 1: discounting is very aggressive to begin with, and we expect 313 00:16:15,720 --> 00:16:19,440 Speaker 1: some more aggressive discounting to kick off. And what is 314 00:16:19,440 --> 00:16:21,680 Speaker 1: the whole thing about this whole chicken thing out there 315 00:16:21,720 --> 00:16:24,200 Speaker 1: with you got chick fil A going against know Popeyees? 316 00:16:24,280 --> 00:16:25,760 Speaker 1: Is that is it just kind of like a little 317 00:16:25,800 --> 00:16:29,000 Speaker 1: marketing fat or is there actually some segment of the 318 00:16:29,000 --> 00:16:32,160 Speaker 1: market that's changing. Well, chickens growing faster than burgers, and 319 00:16:32,240 --> 00:16:34,880 Speaker 1: it has for a while. So um, you know, we've 320 00:16:34,880 --> 00:16:36,800 Speaker 1: seen it with this huge growth of chick fil A 321 00:16:36,880 --> 00:16:39,960 Speaker 1: over the last decade, um. But it's not just chick 322 00:16:39,960 --> 00:16:41,440 Speaker 1: fil A. And chick fil A does a great job 323 00:16:41,440 --> 00:16:43,480 Speaker 1: and they offer a great product, but you know, it's 324 00:16:43,560 --> 00:16:46,480 Speaker 1: chains like Popeye Shop. Popeyes has been growing stores at 325 00:16:46,480 --> 00:16:49,880 Speaker 1: about a six percent clip now since I've been covering 326 00:16:49,920 --> 00:16:54,080 Speaker 1: the company in around uh so, yeah, chickens becoming more popular. 327 00:16:54,080 --> 00:16:57,360 Speaker 1: People are eating more chicken and less beef. So we're 328 00:16:57,400 --> 00:17:00,120 Speaker 1: seeing it, you know, make its way onto a lot 329 00:17:00,120 --> 00:17:03,280 Speaker 1: of menus. All right, you mentioned beef. What's the whole 330 00:17:03,600 --> 00:17:05,880 Speaker 1: scam on this plant based meats. I just thought. I mean, 331 00:17:06,440 --> 00:17:09,520 Speaker 1: I see a lot of you know, network television ads 332 00:17:09,560 --> 00:17:12,160 Speaker 1: now for from Burger King, the the whatever it's called, 333 00:17:12,200 --> 00:17:14,879 Speaker 1: the Unbelievable market burger whatever it is. Is this a 334 00:17:14,920 --> 00:17:17,280 Speaker 1: fat or is this real? What are the company's telling you? Well, 335 00:17:17,280 --> 00:17:20,959 Speaker 1: we think it's here to stay, you know, Um, right 336 00:17:21,040 --> 00:17:23,679 Speaker 1: now there's a lot of questions about you know, is 337 00:17:23,720 --> 00:17:26,080 Speaker 1: the trial you know, right now we're seeing huge trial. 338 00:17:26,119 --> 00:17:28,240 Speaker 1: Burger King sales were at five percent in the US 339 00:17:28,400 --> 00:17:30,399 Speaker 1: last quarter, and a lot of that was people trying 340 00:17:30,440 --> 00:17:34,600 Speaker 1: the impossible whopper? Is that the impossible whopper? But is 341 00:17:34,640 --> 00:17:38,400 Speaker 1: that McDonald's have a product they're they're testing one of Canada. 342 00:17:38,480 --> 00:17:42,000 Speaker 1: They're called it's called the p LT p LT plant 343 00:17:42,040 --> 00:17:43,800 Speaker 1: Lettus And so they're a little bit behind, which is 344 00:17:43,840 --> 00:17:46,359 Speaker 1: un characteristic for them. Yeah, they've been ahead of the 345 00:17:46,359 --> 00:17:48,600 Speaker 1: curve on a lot of things over the last few years. 346 00:17:48,720 --> 00:17:50,720 Speaker 1: I think part of the issue with them is just 347 00:17:50,840 --> 00:17:53,720 Speaker 1: their scale. You have fourteen thousand stay stores in the 348 00:17:53,800 --> 00:17:56,760 Speaker 1: United States. I don't know if beyond Meat or Impossible 349 00:17:56,840 --> 00:18:01,560 Speaker 1: can actually supply fourteen thousand stores at their current Bigger 350 00:18:01,960 --> 00:18:04,240 Speaker 1: the bigger food companies haven't just gotten in there and 351 00:18:04,280 --> 00:18:07,080 Speaker 1: just satisfied the market if there's that demanding, well, they're 352 00:18:07,119 --> 00:18:10,400 Speaker 1: they're starting to you know, we're seeing the UM. We're 353 00:18:10,440 --> 00:18:13,760 Speaker 1: seeing Hormel, We're seeing Nestley has a product that McDonald's 354 00:18:13,760 --> 00:18:16,879 Speaker 1: is actually selling already in Europe. UM. We're seeing a 355 00:18:16,880 --> 00:18:19,879 Speaker 1: lot of these large package food companies get into this 356 00:18:19,920 --> 00:18:22,800 Speaker 1: space because it's growing like wildfire. You know. We're we're 357 00:18:22,800 --> 00:18:26,520 Speaker 1: trying to get some real reads on UM purchasing and 358 00:18:27,000 --> 00:18:30,080 Speaker 1: we have some third party companies kind of looking into 359 00:18:30,119 --> 00:18:31,560 Speaker 1: some things for us, and they're like, you know what, 360 00:18:32,080 --> 00:18:36,239 Speaker 1: there's just such UM trial and so many chains are 361 00:18:36,240 --> 00:18:38,600 Speaker 1: signing on to start selling these things for the first time. 362 00:18:38,800 --> 00:18:41,439 Speaker 1: It's hard to trying to parse out what's repeat and 363 00:18:41,480 --> 00:18:44,639 Speaker 1: what's just chains lining up to start selling this party 364 00:18:44,720 --> 00:18:47,480 Speaker 1: just quickly thirty seconds. How the stocks performed in what 365 00:18:47,520 --> 00:18:51,240 Speaker 1: you're outlook for sector. Yeah, so stocks have performed very 366 00:18:51,280 --> 00:18:53,639 Speaker 1: well this year. Uh. Like I said, it was a 367 00:18:53,720 --> 00:18:58,920 Speaker 1: decent year for market UM not about in line about 368 00:18:58,960 --> 00:19:03,040 Speaker 1: in line UM, but the companies are training up premium 369 00:19:03,160 --> 00:19:04,720 Speaker 1: on an e vd E. But dat basis to a 370 00:19:04,760 --> 00:19:07,360 Speaker 1: ten year until last ten years in terms of evaluations, 371 00:19:07,440 --> 00:19:10,960 Speaker 1: So for for an industry richer than the market for sure, 372 00:19:11,000 --> 00:19:13,720 Speaker 1: and it's not generating much traffic right now, so we 373 00:19:13,760 --> 00:19:16,359 Speaker 1: have concerns, have concerned about I got it, okay, so 374 00:19:16,359 --> 00:19:19,720 Speaker 1: we're rich uh in the market fundamentals may not support that. 375 00:19:19,760 --> 00:19:21,920 Speaker 1: I kind of get the call there. Mike Kalin, Senior rees, 376 00:19:22,080 --> 00:19:24,600 Speaker 1: a restaurant analyst for Bloomberg Intelligence, joining us here in 377 00:19:24,640 --> 00:19:27,560 Speaker 1: the Bloomberg and Director Broker studio, talking about the restaurant 378 00:19:27,640 --> 00:19:30,560 Speaker 1: business plant based meat. I don't you know, I actually 379 00:19:30,600 --> 00:19:32,919 Speaker 1: full the sculture. I have not tried it yet. I 380 00:19:33,000 --> 00:19:34,399 Speaker 1: must try it at some point so I can have 381 00:19:34,440 --> 00:19:50,399 Speaker 1: an a formed opinion. I'm taking a look at Brent 382 00:19:50,560 --> 00:19:54,560 Speaker 1: crude right here up about thirty percent year today to 383 00:19:54,640 --> 00:19:57,600 Speaker 1: get a sense of kind of what's driving global oil 384 00:19:57,920 --> 00:19:59,880 Speaker 1: UH in nine and what we can look forward to. 385 00:20:00,680 --> 00:20:03,440 Speaker 1: Welcome our good friend Dr Ellen Wald. She's a President 386 00:20:03,480 --> 00:20:06,639 Speaker 1: of Transversal Consulting Non Residents, Senior Fellow at the Atlantic 387 00:20:06,680 --> 00:20:11,159 Speaker 1: Council's Global Energy UH Center, and also a Bloomberg Opinion contributor. 388 00:20:11,480 --> 00:20:14,239 Speaker 1: UH So we welcome Dr Wald. So, Ellen, give us 389 00:20:14,240 --> 00:20:17,119 Speaker 1: a sense again Brent up thirty year to date. I 390 00:20:17,119 --> 00:20:19,520 Speaker 1: guess my question is, you know kind of what's been 391 00:20:19,640 --> 00:20:21,439 Speaker 1: driving then and kind of how do you kind of 392 00:20:21,520 --> 00:20:25,360 Speaker 1: carry that into Yeah, I think the big driver right 393 00:20:25,400 --> 00:20:27,840 Speaker 1: now for oil prices and and that's it's really the 394 00:20:27,840 --> 00:20:30,439 Speaker 1: same thing that's been driving oil prices all year is 395 00:20:30,560 --> 00:20:36,159 Speaker 1: demand growth perception. And for most of the perception that 396 00:20:36,320 --> 00:20:39,560 Speaker 1: was that demand growth was going too slow, and so 397 00:20:39,640 --> 00:20:43,000 Speaker 1: that led to a lot of volatility we saw in 398 00:20:43,040 --> 00:20:45,320 Speaker 1: oil prices. But also every time there was something that 399 00:20:45,359 --> 00:20:48,960 Speaker 1: pushed prices up, that um that perception that demand growth 400 00:20:49,040 --> 00:20:52,240 Speaker 1: was going to decrease pushed it down. And so right 401 00:20:52,280 --> 00:20:55,000 Speaker 1: now we've got a lot of optimism in terms of 402 00:20:55,040 --> 00:20:58,919 Speaker 1: demand growth I think for the future, and a lot 403 00:20:58,960 --> 00:21:02,800 Speaker 1: of that is being driven by this Phase one trade 404 00:21:02,840 --> 00:21:06,720 Speaker 1: deal by the US and China, which which is very 405 00:21:06,720 --> 00:21:10,080 Speaker 1: interesting because now that we've we've got that sentiment baked 406 00:21:10,080 --> 00:21:12,680 Speaker 1: into the market, baked into oil prices, they've got to 407 00:21:12,720 --> 00:21:15,359 Speaker 1: get the deal done. And so this is something to 408 00:21:15,440 --> 00:21:18,520 Speaker 1: really keep a close eye on in the first quarter 409 00:21:18,920 --> 00:21:23,159 Speaker 1: of because if something derails that trade deal, then we 410 00:21:23,200 --> 00:21:26,720 Speaker 1: could really see a lot more volatility and prices. What 411 00:21:26,840 --> 00:21:28,600 Speaker 1: do you think oil could pull back to it? In fact, 412 00:21:29,240 --> 00:21:32,440 Speaker 1: this deal does not get put on paper, I mean 413 00:21:32,480 --> 00:21:35,320 Speaker 1: we could we could see it you know, for w T, 414 00:21:35,440 --> 00:21:38,760 Speaker 1: I certainly back into the fifties. Uh, and I wouldn't 415 00:21:38,760 --> 00:21:40,800 Speaker 1: be surprised to see Brent as well fall a lot 416 00:21:41,160 --> 00:21:43,720 Speaker 1: if things really fall apart between the US and China, 417 00:21:43,800 --> 00:21:46,240 Speaker 1: because a lot is writing on this deal. Now. The 418 00:21:46,280 --> 00:21:48,520 Speaker 1: interesting thing about it, though, is so it does go 419 00:21:48,680 --> 00:21:51,320 Speaker 1: through uh and and everything goes as planned, We're not 420 00:21:51,359 --> 00:21:55,480 Speaker 1: even gonna see oil demand pick up immediately because these 421 00:21:55,480 --> 00:21:57,679 Speaker 1: things take time to kind of trickle through the system. 422 00:21:57,720 --> 00:22:02,119 Speaker 1: It's really all about the perception that economic growth is 423 00:22:02,160 --> 00:22:07,080 Speaker 1: going to continue and to grow. So Ellen, give us 424 00:22:07,119 --> 00:22:09,160 Speaker 1: a sense that's the kind of the demand equation again, 425 00:22:09,280 --> 00:22:12,240 Speaker 1: very much leveraged to what happens with the global trade 426 00:22:12,240 --> 00:22:14,840 Speaker 1: agreement between the US and China. Just give us an 427 00:22:14,880 --> 00:22:16,680 Speaker 1: update on kind of what you're hearing. I know you're 428 00:22:16,720 --> 00:22:19,080 Speaker 1: in VN several weeks ago. Give us your thoughts on 429 00:22:19,160 --> 00:22:21,560 Speaker 1: kind of how OPEC is going to market and maybe 430 00:22:21,680 --> 00:22:26,400 Speaker 1: plus Russia. Yeah, so the supply side of the equation 431 00:22:26,520 --> 00:22:29,760 Speaker 1: is is also Uh, it's also about some some volatility 432 00:22:29,840 --> 00:22:33,280 Speaker 1: in it. Uh. This this deal between OPEC and OPEC 433 00:22:33,320 --> 00:22:36,680 Speaker 1: plus to cut production even further really hinges right now, 434 00:22:36,960 --> 00:22:40,320 Speaker 1: mostly on Saudi Arabia. Which is committed to cutting even 435 00:22:40,440 --> 00:22:44,040 Speaker 1: more production than it has to UH and so that 436 00:22:44,200 --> 00:22:48,680 Speaker 1: was supposed to be an incentive to these overproducers Iraq 437 00:22:49,119 --> 00:22:52,960 Speaker 1: and Nigeria and Russia in particular to get inline and 438 00:22:53,080 --> 00:22:55,679 Speaker 1: UH and follow the deal and and cut production. But 439 00:22:56,080 --> 00:22:59,960 Speaker 1: now we're hearing that Russia is really kind of cooling 440 00:23:00,080 --> 00:23:03,400 Speaker 1: off on its commitments UH and and Novak in particular, 441 00:23:03,520 --> 00:23:06,120 Speaker 1: saying you know, well, we're gonna we're gonna reevaluate in March. 442 00:23:06,280 --> 00:23:09,639 Speaker 1: We may not you know, continue these UH production cuts, 443 00:23:09,880 --> 00:23:12,720 Speaker 1: keeping in mind that they haven't actually cut production yet. 444 00:23:12,920 --> 00:23:15,560 Speaker 1: So the supply side of the equation is really hinging 445 00:23:15,600 --> 00:23:19,119 Speaker 1: on Saudi Arabia and whether Saudi Arabia just decides, hey, 446 00:23:19,280 --> 00:23:21,880 Speaker 1: we're gonna, you know, take the hit on this one 447 00:23:22,200 --> 00:23:26,160 Speaker 1: and cut our production. Meanwhile, you've got the shale oil equation, 448 00:23:26,680 --> 00:23:29,400 Speaker 1: which is really a big question mark going forward. Yeah, 449 00:23:29,440 --> 00:23:31,439 Speaker 1: that's kind of where I wanted to go. Um. You know, 450 00:23:31,480 --> 00:23:33,560 Speaker 1: it's I guess for those of us who weren't, we 451 00:23:33,600 --> 00:23:35,960 Speaker 1: don't live and breathe the energy day to day. The 452 00:23:36,000 --> 00:23:37,720 Speaker 1: one thing we can certainly recognize has been a c 453 00:23:37,960 --> 00:23:40,480 Speaker 1: change in the global energy business is the growth of 454 00:23:40,520 --> 00:23:43,520 Speaker 1: the US shale production and supply and what that's meant 455 00:23:43,560 --> 00:23:45,960 Speaker 1: to the global marketplace. Give us a sense of what's 456 00:23:46,000 --> 00:23:48,399 Speaker 1: going on in the shale patch today and kind of 457 00:23:48,440 --> 00:23:52,840 Speaker 1: what your expectations are for It's it's really it's still 458 00:23:52,880 --> 00:23:55,720 Speaker 1: a very big, big question because you've got on one side, 459 00:23:55,720 --> 00:23:59,400 Speaker 1: you've got um the e i A predicting that, uh, 460 00:23:59,560 --> 00:24:01,960 Speaker 1: the u US is going to average over thirteen million 461 00:24:02,000 --> 00:24:05,760 Speaker 1: barrels per day of production in which is a huge number. 462 00:24:05,960 --> 00:24:09,680 Speaker 1: I think in November the number was twelve point eight 463 00:24:09,720 --> 00:24:11,639 Speaker 1: million barrels per day, which it makes the US the 464 00:24:11,720 --> 00:24:14,640 Speaker 1: largest oil producer in the world. Now, on the other hand, 465 00:24:14,720 --> 00:24:17,080 Speaker 1: you've got kind of the naysayers who are saying, look, 466 00:24:17,240 --> 00:24:19,880 Speaker 1: there's a lot of issues going on. There's decline, there's 467 00:24:19,880 --> 00:24:24,560 Speaker 1: well declined, there's financial issues, and we're gonna see slowing 468 00:24:25,000 --> 00:24:28,359 Speaker 1: growth rate, possibly even slowing production in the Permian. And 469 00:24:28,400 --> 00:24:30,800 Speaker 1: I think that that's really what Opek is banking on, 470 00:24:31,440 --> 00:24:33,199 Speaker 1: is that is that things are going to going to 471 00:24:33,240 --> 00:24:35,920 Speaker 1: start to slow. But then you've got people saying, look, 472 00:24:36,520 --> 00:24:39,280 Speaker 1: the shale producers have ways to deal with this. They're 473 00:24:39,320 --> 00:24:43,800 Speaker 1: drilling longer laterals, we've got more pipelines coming online, and uh, 474 00:24:43,840 --> 00:24:46,720 Speaker 1: and you know, they're really very doing very targeted drilling, 475 00:24:46,800 --> 00:24:49,040 Speaker 1: such that they're drilling only in areas that are really 476 00:24:49,080 --> 00:24:51,919 Speaker 1: profitable to them. So I think we've we've kind of 477 00:24:52,000 --> 00:24:55,320 Speaker 1: got uh two sides of the argument here, and we're 478 00:24:55,320 --> 00:24:59,120 Speaker 1: just gonna have to see what pans out in Before 479 00:24:59,119 --> 00:25:00,440 Speaker 1: I let you go, I want to talk to get 480 00:25:00,480 --> 00:25:02,760 Speaker 1: your thoughts on A Ramco Saudi A Ramco the stock 481 00:25:03,200 --> 00:25:06,199 Speaker 1: as we know. I pod on December eleventh at thirty 482 00:25:06,320 --> 00:25:11,040 Speaker 1: to UH Saudi Rails. I guess um per share it's 483 00:25:11,040 --> 00:25:14,240 Speaker 1: now at thirty five and change. What is the feedback 484 00:25:14,320 --> 00:25:16,520 Speaker 1: you've been hearing within the energy circles? I mean it 485 00:25:16,640 --> 00:25:19,280 Speaker 1: was this was such a limited deal in terms of 486 00:25:19,560 --> 00:25:24,080 Speaker 1: you know, kind of really confined to the UH Saudi 487 00:25:24,080 --> 00:25:27,440 Speaker 1: Arabian some neighboring countries. It didn't really get any real 488 00:25:27,440 --> 00:25:30,199 Speaker 1: exposure in the West. Is there a sense that we 489 00:25:30,240 --> 00:25:33,720 Speaker 1: really still don't know what this company's worth. Yeah, I 490 00:25:33,720 --> 00:25:36,120 Speaker 1: think that there's there's a sense that whatever is being 491 00:25:36,160 --> 00:25:39,560 Speaker 1: treated for on the market right now is not necessarily 492 00:25:39,920 --> 00:25:42,840 Speaker 1: the market value or what what a real market would 493 00:25:42,880 --> 00:25:45,440 Speaker 1: would say the value of the company is. It's very 494 00:25:45,440 --> 00:25:47,640 Speaker 1: hard to say, because, first of all, it's got very 495 00:25:47,720 --> 00:25:51,240 Speaker 1: low trading volume. I mean extremely low volume in terms 496 00:25:51,240 --> 00:25:54,840 Speaker 1: of trading. Tadawal caps movement at ten percent per day, 497 00:25:54,880 --> 00:25:57,200 Speaker 1: so you're never going to see upper down more than 498 00:25:57,280 --> 00:26:00,000 Speaker 1: ten percent for a Ramco. But then you've also got 499 00:26:00,000 --> 00:26:02,840 Speaker 1: had a lot of government intervention going on here, and 500 00:26:03,000 --> 00:26:05,760 Speaker 1: we know that the Saudis do this for other stocks 501 00:26:05,760 --> 00:26:08,800 Speaker 1: and to Dowald to try to stabilize prices, and so 502 00:26:08,920 --> 00:26:11,200 Speaker 1: we can assume that they're also doing this with a 503 00:26:11,320 --> 00:26:13,879 Speaker 1: Ramco to try to prevent a whole lot of volatility. 504 00:26:14,000 --> 00:26:15,920 Speaker 1: So right now we're kind of in a I would say, 505 00:26:15,920 --> 00:26:18,840 Speaker 1: in a holding position. They hit their two trillion dollar valuation, 506 00:26:19,080 --> 00:26:21,879 Speaker 1: they since backed off from that, which I think was 507 00:26:21,920 --> 00:26:26,000 Speaker 1: something that everyone expected. The real question, I think is 508 00:26:26,119 --> 00:26:29,480 Speaker 1: what's going to happen uh in June, because in June 509 00:26:29,520 --> 00:26:32,399 Speaker 1: that's when the lock up period ends, and it wouldn't 510 00:26:32,400 --> 00:26:35,480 Speaker 1: be surprising to see more people selling their shares that 511 00:26:35,560 --> 00:26:37,639 Speaker 1: they bought at the I p O. We'll see more 512 00:26:37,960 --> 00:26:41,359 Speaker 1: of trading volumes starting to happen with a Ramco, and 513 00:26:41,520 --> 00:26:43,280 Speaker 1: that's when we may get a real sense of what 514 00:26:43,440 --> 00:26:46,840 Speaker 1: this company is actually worth. Dr Ellen Wall, thank you 515 00:26:46,880 --> 00:26:50,840 Speaker 1: so much for joining US. Dr waldis president of Transversal Consulting. 516 00:26:51,400 --> 00:26:54,080 Speaker 1: She's also a nonresident Senior Fellow at the Atlantic Council's 517 00:26:54,080 --> 00:26:58,000 Speaker 1: Global Energy Sector Center, and also Bloomberg opinion contributors. So 518 00:26:58,040 --> 00:27:00,520 Speaker 1: we appreciate Dr Wald coming on. She's our expert when 519 00:27:00,520 --> 00:27:02,760 Speaker 1: it comes to global energy markets, giving us a sense 520 00:27:02,760 --> 00:27:05,520 Speaker 1: of supply and demand. Thanks for listening to the Bloomberg 521 00:27:05,520 --> 00:27:07,720 Speaker 1: P and L podcast. You can subscribe and listen to 522 00:27:07,760 --> 00:27:11,000 Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer. 523 00:27:11,400 --> 00:27:14,160 Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa 524 00:27:14,160 --> 00:27:16,800 Speaker 1: abram Woyds. I'm on Twitter at Lisa abram Woyits one 525 00:27:17,040 --> 00:27:19,639 Speaker 1: before the podcast. You can always catch us worldwide. I'm 526 00:27:19,680 --> 00:27:20,520 Speaker 1: Bloomberg Radio