Speaker 1: This is Bloomberg Business Wait inside from the reporters and
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Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: We go to a story that is the most read
Speaker 2: on the Bloomberg or among the most read all day today.
Speaker 3: Yeah, it broke after the close yesterday. It raises the question,
Speaker 3: is Jamie Diamond possibly setting up to really finally, finally,
Speaker 3: could it be actually say goodbye?
Speaker 4: Carol?
Speaker 5: I don't know. I don't know.
Speaker 2: It looks like it the actual news by the way,
Speaker 2: JP Morgan Chase Jamie Diamond. Of course, the CEO there
Speaker 2: moved some of his top lieutenants into new senior roles,
Speaker 2: positioning them for more experience running the firm's operations.
Speaker 5: As he prepares potential successors.
Speaker 2: That's how we reported it out. It does look like
Speaker 2: he's giving people some more experience, or bigger experiences, if
Speaker 2: you will.
Speaker 5: So what does it mean?
Speaker 2: Bloomberg New Senior Finance reporter Shtrina Rajan is here in
Speaker 2: our radio studio, shre what does it mean? Two and
Speaker 2: a half years left, is he kind of getting ready.
Speaker 4: Let's be clear that two and a half years is
Speaker 4: just the five year retention package you got. That doesn't
Speaker 4: necessarily put an end line for the Jamie Diamond tenure
Speaker 4: or a JP Morgan chase. Look, it is the latest
Speaker 4: edition of the musical chairs at JP Morgan where Jamie
Speaker 4: Diamond is conducting this move. We've seen this before, we're
Speaker 4: seeing it again. And the thing is any organizational reshuffle
Speaker 4: that we see now this many years into Diamond's tenure
Speaker 4: atop the country's largest bank, the most profitable bank, obviously
Speaker 4: begs the question as to what are the tea leaves
Speaker 4: we can read from it about succession, who is best placed?
Speaker 4: So actually, just let's look at what's reason. Let's look
Speaker 4: at the names here here you have till now, till yesterday,
Speaker 4: people would have argued Jen Peepsak and Marianne Lake are
Speaker 4: the two executives who've seemed best positioned to be the
Speaker 4: successor to Jamie Diamond. So what does this show do
Speaker 4: You're taking Gen Peepsack from the consumer and community banking
Speaker 4: side of it, one of the largest parts of this
Speaker 4: giant bank with a fortrillan dollar balance sheet, and moving
Speaker 4: her to the commercial and investment bank site alongside Troy Roorberg,
Speaker 4: who's that trading head who now gets expanded responsibilities, and
Speaker 4: by virtue of this promotion, gets added into the mix
Speaker 4: of potential successes in a serious way. You have Mary
Speaker 4: and Lake who's getting expanded responsibilities in the consumer and
Speaker 4: community bank side, and Chase still is the big beast,
Speaker 4: big component of JP Morgan Chase. My read of it,
Speaker 4: you have three contenders. Gen Peepsack gets to now have
Speaker 4: run all the important parts of JP Morgan, So I
Speaker 4: would put her a hair ahead of Mary and Lake,
Speaker 4: who's still very solid contender, But Troy Roorberg now suddenly
Speaker 4: leaps into the mix as a long short contender. But
Speaker 4: it all ultimately depends on how much more time Jamie
Speaker 4: Diamond wants to spend holding the reins a JP Morgan Chase.
Speaker 2: I just got to say, I'm just loving that there
Speaker 2: are two women who are strong contenders potentially to take
Speaker 2: over for Jamie Diamond at JP Morgan. Is that something
Speaker 2: that has certainly been important to him in terms of
Speaker 2: the role of advancing women at that firm, And then
Speaker 2: maybe you know, getting ready to set somebody to lead it.
Speaker 4: I'm sure he would say it's been important to him.
Speaker 4: I'm also sure that he'd probably said that at the
Speaker 4: end of the day, the success that he picks, or
Speaker 4: he helps the board pack, or the board decides, is
Speaker 4: not going to be decided based on whether it's a
Speaker 4: woman or not. He's had two contenders in the mix.
Speaker 4: A few years ago the move would have been extremely
Speaker 4: symbolic and valuable, But the fact that Jane Fraser became
Speaker 4: cu as City Group sort of stole the thunder from
Speaker 4: JP Morgan. For the longest time, we always thought that
Speaker 4: maybe twelve thirteen, fourteen years into Jamie Diamonds tenil, when
Speaker 4: he's ready to hand over the reins, it would be
Speaker 4: a woman running the country's largest bank. But Jamie's still there,
Speaker 4: and Jane Fraser's now the CEO City Group.
Speaker 3: And that's what I wanted to talk about. Jamie's still there.
Speaker 3: He has at least two and a half years left
Speaker 3: on this, on this portion, what do we know about
Speaker 3: it seems like he has a lot of fun doing this.
Speaker 3: It really does. I mean, he's been doing this since
Speaker 3: two thousand and five.
Speaker 4: He seems to be having more fun than ever before.
Speaker 4: He still has a spring in his step. He's still
Speaker 4: ready to be the you know, the sort of the
Speaker 4: dean of Wall Street CEOs. This is the speaker of
Speaker 4: the caucus, if you may. He's representing the industry in DC.
Speaker 4: He's speaking his mind. Look, that's been true of Jamie
Speaker 4: Diamond forever, but more so now than ever before. And
Speaker 4: the stock's been up twenty five percent in the last year.
Speaker 4: That's called winning and that does not make anyone feel
Speaker 4: bored or tired.
Speaker 2: So two thousand and five he became president CEO. So
Speaker 2: would twenty twenty five be a nice round number to
Speaker 2: come off of this position?
Speaker 4: Well, you know, if you could read into his mind,
Speaker 4: show that sounds like a nice round number. Yes, he's
Speaker 4: closer to the end of his ten than not. But
Speaker 4: at the same time he's playing his cards very cool.
Speaker 3: So you could argue that twenty thirty also sounds like
Speaker 3: a good round number. Twenty fifty what about? What about?
Speaker 5: When do they have they moved into the new building?
Speaker 5: Forgive me if I don't know that.
Speaker 4: Oh no, it's still Verry. What is that done?
Speaker 5: When is that done?
Speaker 6: You know?
Speaker 4: That's that's the other favorite partner game. At least I've
Speaker 4: had a bed with at least some JP Morgan executives,
Speaker 4: and I said, a good time to call time on
Speaker 4: his time at wow? I said time four times and
Speaker 4: six words. Okay, But a good time to call time
Speaker 4: on his tenure JP Morgan would be when the new
Speaker 4: building is completed, call it the Jamie Diamond Building and
Speaker 4: say goodbye. But I have been definitively told that if
Speaker 4: I were to make that bet, I would lose it.
Speaker 3: Three twenty seconds left. Is there anything else we need
Speaker 3: to know about the people moves announced yesterday? Because it
Speaker 3: wasn't just these three individuals you named.
Speaker 4: There were other moves beneath that top layer. But the
Speaker 4: most important news for all of us is it clearly
Speaker 4: puts the spotlight on these three individuals. And when we
Speaker 4: think about succession and when we think about who will
Speaker 4: run the tree's most profitable bank, it's these three names
Speaker 4: we have to look at right now.
Speaker 2: Really fascinating and it certainly popped when the news crossed yesterday.
Speaker 2: Shere always making sense of the comings and goings on
Speaker 2: Wall Street, Thank you so much, really appreciate it. That is,
Speaker 2: of course, Bloomberg New Senior finance reporter Strina A. Rajan
Speaker 2: here in our studio at Bloomberg Headquarters. Shares of JP Morgan.
Speaker 2: By the way, they're up about one point four percent
Speaker 2: so far this year, just down a little bit in
Speaker 2: this trade. You are listening and watching Bloomberg Business Week,
Speaker 2: Carol Master, Tim Stenovic, this is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from two to five pm Eastern Listen
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Speaker 5: Well, real estate continues to be on our radar.
Speaker 2: Yesterday you might recall we've got a great check on
Speaker 2: commercial real estate. We talked with Michael Levy, who's the
Speaker 2: CEO of Crow Holdings. What he talked about, Tim was
Speaker 2: top tier office. I got a problem. In fact, he's
Speaker 2: still building office space in places such as Doubt.
Speaker 7: I know.
Speaker 3: I pushed back on it. He said, it's got to
Speaker 3: be top tier. Yeah, I mean they building so much. Yeah,
Speaker 3: it's struggling right now. So we wondered too about the
Speaker 3: hospitality side of the business. The Bloomberg reat Hotels indexes
Speaker 3: rallied twenty six percent since late October, and we had
Speaker 3: the perfect guest with us. Kevin Davis is CEO America's
Speaker 3: hotel and Hospitality at JL Jones Langlas Soli's, the publicly
Speaker 3: held real estate and investment management consultancy. It trades under
Speaker 3: the ticker JL. Kevin's here in our studio at Bloomberg
Speaker 3: Headquarters in New York. Good to have you with us
Speaker 3: this afternoon. Welcome back, Great to be here. You know,
Speaker 3: our Bloomberg Pursuits team called it already, they said, twenty
Speaker 3: twenty four is going to be a record setting year
Speaker 3: when it comes to travel on the tourism side, on
Speaker 3: the business travel side. First up, though at JLL you're
Speaker 3: involved in office, industrial, retail, give us size and scope
Speaker 3: here when it comes to the hotel and hospitality business
Speaker 3: that you're in charge of.
Speaker 6: Yeah, So our business relative to some of the other
Speaker 6: asset classes is relatively small, but certainly our impact on
Speaker 6: g GDP is relatively large given the number of people
Speaker 6: that work in hotels and hospitality and leisure around the country.
Speaker 6: So's a business that has a pretty significant impact on
Speaker 6: the economy.
Speaker 8: Yeah.
Speaker 2: Absolutely, And you guys obviously want to get into because
Speaker 2: why and want you assume you can grow to how
Speaker 2: much of your business.
Speaker 6: Look, we have aggressive and ambitious growth goals, and so
Speaker 6: our hope is that we continue to move the business
Speaker 6: forward and make significant strides in terms of growth.
Speaker 3: I mean, is it going to grow faster? Is it
Speaker 3: going to grow faster than office, industrial and retail?
Speaker 6: You know, it's Look, it's hard to say. Certainly, some
Speaker 6: of those sectors have been challenged and are in the
Speaker 6: midst of recovering. I will tell you one of the
Speaker 6: things that we're super optimistic about as it relates to hospitality,
Speaker 6: it has proven to be a strong inflation hedge, and
Speaker 6: while inflation looks like it's in the rear view mirror,
Speaker 6: as a result of that, it's attracted a lot of
Speaker 6: institutional investors into the space. And also hospitality typically offers
Speaker 6: incremental yield relative to other asset classes, and so as
Speaker 6: a result of that, investors are coming into the space.
Speaker 2: Kevin, you talk about investor interests, quantify that give us
Speaker 2: an idea of how it was maybe pre pandemic. I mean,
Speaker 2: tell us, what how long have you guys been building
Speaker 2: up this business.
Speaker 6: I mean, we've been in the hospitality business at JLL
Speaker 6: for over twenty five years. So this is a core
Speaker 6: business for US, and we are leaders in the space.
Speaker 6: So just by a order of magnitude, and I'll give
Speaker 6: you global numbers. I mean generally globally hospitality, it's typically
Speaker 6: between seventy five and one hundred billion dollars worth of
Speaker 6: transactions that take place in a given year. Last year, globally,
Speaker 6: we had about fifty billion dollars worth of transactions, so
Speaker 6: we were down about thirty percent relative to twenty twenty two.
Speaker 6: But we expect that it will likely increase sales volume.
Speaker 6: Transaction volume will likely increase fifteen to twenty five percent
Speaker 6: this year, so we are on the way back. We
Speaker 6: don't expect to get all the way back this year,
Speaker 6: but we think we're on a great trajectory toward stronger transactions.
Speaker 2: What's feeling that you talk about investor demand? Is it
Speaker 2: because we're expecting a lower rate environment? Is because you
Speaker 2: expect the economy and I'm curious when you look at
Speaker 2: the economies, I'm assuming it's the US and elsewhere or
Speaker 2: is it the US specifically?
Speaker 6: Yeah, it's strong growth in the US, strong growth in
Speaker 6: Europe globally, though relatively speaking, we actually expect more growth
Speaker 6: in Asia, which has been slow to emerge out of
Speaker 6: the pandemic Japan. Japan has actually started, but more specifically China,
Speaker 6: which has recently opened up much more so, we expect
Speaker 6: that you'll see strong growth in China. Also inbound travel
Speaker 6: from China to the US, which is something that certainly
Speaker 6: has not it's not close to recovering to what it
Speaker 6: was pre pandemic.
Speaker 3: Hey, talk a little more about that, because we've talked
Speaker 3: a lot on our program about the struggles that China
Speaker 3: faces internally, the struggles that they face with their own
Speaker 3: property market, with the economy, with youth unemployment, with demographic challenges.
Speaker 3: Why are you bullish on China?
Speaker 6: Well, I'm bullish relative to what we've seen over the
Speaker 6: past couple of years. I'm bullish in terms of Chinese
Speaker 6: travelers getting out and traveling. I mean, you ultimately have
Speaker 6: an emerging and growing middle class in China, and as
Speaker 6: the middle class grows, we expect that more people will
Speaker 6: travel and will travel specifically to the US into Europe
Speaker 6: as well.
Speaker 2: So what type of hospitality properties do you think investors
Speaker 2: are investors kind of clamoring for or asking for of you?
Speaker 6: Guys, Absolutely, it's really the two poles. If you will
Speaker 6: it's luxury, which has performed exceptionally well coming out of
Speaker 6: the pandemic, and it's select service and extended stay assets,
Speaker 6: which have also performed well.
Speaker 5: What's select service?
Speaker 6: Select service? So typically you don't have extensive food and beverage.
Speaker 6: It's primarily rooms, and you typically don't have a lot
Speaker 6: of meeting space, so you wouldn't if you're going to
Speaker 6: a big conference, you're generally not the meetings are not
Speaker 6: going to be at a select service hotel. You'll typically
Speaker 6: go to a full service hotel that has meeting space
Speaker 6: and banquets and catering, et cetera. Part of the reason
Speaker 6: why the select service space has grown though, particularly extended stay,
Speaker 6: is people have a lot more flexibility now post COVID
Speaker 6: as it relates to work, and you've seen a bit
Speaker 6: of the blended business and leisure travel, the so called
Speaker 6: bleisure travel. So because people have a lot more flexibility
Speaker 6: to travel when they are frequently on the road, they
Speaker 6: want a bit more homelike amenities. So extended stay, which
Speaker 6: typically have kitchens, are attractive and that's a sector where
Speaker 6: we expect to see a lot of growth.
Speaker 3: What about regional differences here in the US, you talked
Speaker 3: about where you're seeing action globally, but what about here
Speaker 3: in the US.
Speaker 6: Yeah, So in the US, it's interesting and it's changing.
Speaker 6: In the first couple of years out of COVID, we
Speaker 6: saw strong growth in the Sun Belt and the resort markets,
Speaker 6: which we expect to continue. We saw meaningful contraction in
Speaker 6: the urban markets New York, Boston, Chicago, Los Angeles, San Francisco.
Speaker 6: But the trend that we started to notice last year,
Speaker 6: which picked up steam and we expect will continue over
Speaker 6: the course of this year, is really improving performance in
Speaker 6: urban markets, so again the New York's, the Boston's, Chicago, etc.
Speaker 6: The reason really threefold. You've had return of leisure travelers.
Speaker 6: For many years, people were concerned to go to an
Speaker 6: urban city, to an urban market because the pandemic. So
Speaker 6: you've had leisure comeback. You've also had group travel comeback,
Speaker 6: so people coming to the cities for meetings. And then
Speaker 6: you've also had a sector called business business transient, which
Speaker 6: are business people coming to meet with clients and colleagues,
Speaker 6: et cetera. So that segment is all coming back. The
Speaker 6: other part, the last component though, is the global which
Speaker 6: is early days of coming back. But we expect that
Speaker 6: that will pick up in earnest and that's going to
Speaker 6: drive performance in markets like New York, Boston, San Francisco.
Speaker 2: Go move a little bit more on San Francisco because
Speaker 2: I feel like Tim, we've had some different guests who
Speaker 2: are it's fine, it's coming back.
Speaker 3: Others say no way, we're not touching it, and that
Speaker 3: they make.
Speaker 2: It so hard to build or do anything in that city.
Speaker 2: So you see opportunities there.
Speaker 6: Look, San Francisco is a gateway market, it's a top
Speaker 6: five market. It's not going anywhere. Certainly, it's having its
Speaker 6: challenges now they're political issues, social issues.
Speaker 1: Et cetera.
Speaker 6: But we certainly believe that longer term, San Francisco is
Speaker 6: going to be a great place to invest. So, yes,
Speaker 6: the market is challenged today, but we think this is
Speaker 6: a short, medium term issue which over time San Francisco
Speaker 6: will recover.
Speaker 5: You sound really optimistic.
Speaker 3: I have bottom lined.
Speaker 5: So what's the risk at there?
Speaker 2: I mean, we have spent so much of January, you know,
Speaker 2: laying out quite a long list of risks for folks
Speaker 2: out there, whether it's geopolitical politics here in the US
Speaker 2: and elsewhere. What if the FED gets it wrong, just
Speaker 2: got about thirty seconds. What's your number one risk that
Speaker 2: could kind of upend this optimism.
Speaker 6: Number one risk is if the FED doesn't cut rates
Speaker 6: as aggressively as the market expects, so six ' five
Speaker 6: or or look, I think it's at least three, okay,
Speaker 6: Or or if the rate cuts get pushed to later
Speaker 6: in the year. I think if one or both of
Speaker 6: those things happen, that will take some, not all, some
Speaker 6: of the optimism out of the market, and we may
Speaker 6: be on a slightly different trajectory. But ultimately we feel
Speaker 6: very good about twenty twenty four.
Speaker 2: All right, well, this was a fun check up. Thank
Speaker 2: you so much.
Speaker 6: Thank you, I appreciate it.
Speaker 2: Kevin Davis, He's chief executive officer of America's Hotels and
Speaker 2: Hospitality over it. Jones Lang LaSalle joining us here in
Speaker 2: our studio at Bloomberg Headquarters. All right, folks, you are
Speaker 2: listening and watching Bloomberg Business with Carol Master Tim Steedvik.
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Speaker 1: A welcome glass. Here is something to be.
Speaker 3: And now to the cover story of the new issue
Speaker 3: of Bloomberg Business Week, featuring none other than Sean Fain,
Speaker 3: the president of the United Auto Workers, who earlier this
Speaker 3: week made quite a bit of news when the UAW
Speaker 3: endorsed Joe Biden's twenty twenty four reelection bid. But Carol,
Speaker 3: that's not why we're talking about Sean Fain today, No.
Speaker 1: It is it.
Speaker 2: We're talking about Sean Fayn because after making historic gains
Speaker 2: for autoworkers last year, he's now got his site set
Speaker 2: on a company we talked about a lot this week.
Speaker 3: Tesla Well, Josh Idelson, and Gabriella Coppola write all about
Speaker 3: Sean Fayne and the new issue of Business Week magazine,
Speaker 3: available on newsstands, on the Bloomberg terminal and at Bloomberg
Speaker 3: dot com slash BusinessWeek. Josh Idelson is Bloomberg News Labor reporter.
Speaker 3: He joins us on Zoom from Washington, DC. So, Josh,
Speaker 3: before we get to what exactly Faine is trying to
Speaker 3: do and the UAW are trying to do. It's not
Speaker 3: just Tesla, by the way, there are a lot of
Speaker 3: companies in the US that are trying to organize beyond
Speaker 3: the Big Three. Talk a little bit about the wins
Speaker 3: that he had last year and how big of a
Speaker 3: deal it was that he was able to get those
Speaker 3: concessions for the UAW workers from the Big Three.
Speaker 7: The contract victory that the UAW pulled off this fall
Speaker 7: has no precedent in the set past several decades of
Speaker 7: the union's history. The union one raises that with cost
Speaker 7: of living increases will be a third over the next
Speaker 7: four and a half years for many workers. Some workers
Speaker 7: will see their pay more than double if they were
Speaker 7: previously classified as temps. The union also won some key
Speaker 7: victories in areas like making it easier for workers at
Speaker 7: the joint ventures of General Motors and Stilantis to unionize,
Speaker 7: join the OW, and join the existing union contract over
Speaker 7: the coming years. And so this was both a reversal
Speaker 7: of a trend where auto workers have been losing ground
Speaker 7: to inflation and also a big step towards securing the
Speaker 7: union's future as the auto industry changes. But to continue
Speaker 7: to do that is going to take a lot more
Speaker 7: work and in fact climbing more difficult mountains for this union.
Speaker 2: All Right, it sounds like one of those mountains is
Speaker 2: named Tesla. So talk to us about he set his
Speaker 2: sights on Tesla and what his goal mission and how
Speaker 2: he thinks about it.
Speaker 7: So the union is trying to organize thirteen companies non
Speaker 7: union plants to organize one hundred and fifty thousand workers,
Speaker 7: double the number of automaker employees that are in the UAW,
Speaker 7: a union that has lost the majority of its membership
Speaker 7: in the past several decades. And Tesla is one of
Speaker 7: those thirteen companies. It's a particularly alluring and difficult target.
Speaker 7: It's the company that is synonymous for many people with EVS.
Speaker 7: It's the most valuable automaker in the world. But it's
Speaker 7: a company whose CEO, Elon Musk, has shown that he's
Speaker 7: staunched the anti union and willing to put up with
Speaker 7: embarrassing media and lengthy legal battles in order to get
Speaker 7: what he wants. The US National Labor Relations Board is
Speaker 7: found that Tesla repeatedly violated the law in response to
Speaker 7: prior UAW organizing, including by firing an activist who still
Speaker 7: has not gotten his job back. Now seven years later,
Speaker 7: Tesla has denied wrongdoing, has made clear that he would
Speaker 7: see unionization in the plant as a failure on the
Speaker 7: company's part.
Speaker 3: So how then, why is it so difficult then for
Speaker 3: the UAW to organize? Because it's it's ultimately not up
Speaker 3: to Tesla as a company and not up to Elon Musk.
Speaker 3: Why is it so hard for the UAW two actually
Speaker 3: organize the folks who work at Tesla and get them
Speaker 3: on their side.
Speaker 7: So under US labor law, it is not easy to
Speaker 7: unionize a big company that is trying to stop workers
Speaker 7: from organizing. Companies have the ability to use tactics like
Speaker 7: mandatory anti union meetings that Labor Board precedent says are
Speaker 7: legal when there is retaliation. Although it's illegal to punish
Speaker 7: someone for organizing, the Labor Board does not have the
Speaker 7: authority to hold executives liable or to make companies pay
Speaker 7: punitive damages. And as we've talked to people, there is
Speaker 7: a real sense among a number of Tesla employees that
Speaker 7: if they challenged the company, it could lead to punishment
Speaker 7: for them or even to shutting down the plant. There,
Speaker 7: of course, other employees who don't see a reason to
Speaker 7: have the UAW. And over the years, the corruption scandals
Speaker 7: within the UAW have been one of the talking point
Speaker 7: greatly on Musk and other executives against the union. So
Speaker 7: Sean Fains worked hard to distinguish himself from the union's
Speaker 7: recent past, and he's been quite a vocal critic of
Speaker 7: the direction that the union was going until he took over.
Speaker 2: I kind of know the answer to this because I've
Speaker 2: read your story, But I mean, Tesla didn't respond, right,
Speaker 2: so they haven't weighed in on this, at least for
Speaker 2: you guys.
Speaker 7: Correct, Tesla did not respond to inquiries.
Speaker 2: So you know you've been watching this movement, and you
Speaker 2: know it's really fascinating in the auto industry because I
Speaker 2: do think, right, they have to be careful because you
Speaker 2: don't want to it's a global ev race specifically, and
Speaker 2: you want to make sure that the US automakers are
Speaker 2: winners as well, right, that they are part of this
Speaker 2: market going forward. How does he think about being fair
Speaker 2: and making sure that the automakers here in the US
Speaker 2: are still competitive globally And just got about twenty five
Speaker 2: thirty seconds.
Speaker 7: Sean Fain has argued the US should not be copying
Speaker 7: Chinese labor standards. There should not be a race to
Speaker 7: the bottom to try to match how cheap labor may
Speaker 7: be some other places. If anything, he suggested us, it's
Speaker 7: the fact that China has a strong industrial policy that
Speaker 7: the US should learn from and that trade policy has
Speaker 7: a role here. But also he's working to raise the
Speaker 7: floor by organizing the non union companies, which of course
Speaker 7: would make it easier to continue to win more at
Speaker 7: the Big three in the future, so that the union
Speaker 7: is not an island in Detroit.
Speaker 2: Well, we talk about themes to watch, We talk about
Speaker 2: AI definitely, we're watching the new class of diet drugs
Speaker 2: if you will, or weight loss drugs, and I feel
Speaker 2: like union organizations that too.
Speaker 5: This is the cover.
Speaker 2: Josh Idelson, thank you so much. He is Bloomberg News
Speaker 2: Labor reporter.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from two to five pm Eastern Listen
Speaker 1: on Apple car Play and then brout Auto with a
Speaker 1: Bloomberg Business app, or watch us live on YouTube.
Speaker 2: Well engageing minding us existing sales rebandaged sharply in December
Speaker 2: to a five month high, suggesting the recent drop in
Speaker 2: mortgage rates is helping to stabilize the resale market.
Speaker 5: That recent drop, by the way.
Speaker 2: In mortgage rates also helping to bring sales of new
Speaker 2: homes in the US past forecasts in December. We got
Speaker 2: that data yesterday, and in general, we've been thinking a
Speaker 2: lot about real estate and talking to different voices in
Speaker 2: different sectors of the industry.
Speaker 3: Yes, some sectors that we've covered in recent days have
Speaker 3: been office, hospitality, hotel, industrial, but it got us thinking
Speaker 3: more about so called alternative real estate assets. We're talking
Speaker 3: about senior housing, self storage, student housing, and more. It's
Speaker 3: top of mind at Harrison Street, a company that focuses
Speaker 3: exclusively on so called alternative real assets. The company has
Speaker 3: fifty five a billion dollars in assets under management with
Speaker 3: more than five hundred institutional investors around the world.
Speaker 2: Christopher Merrill is CEO of the Chicago based Harrison Street.
Speaker 2: He's in town and he joins us here in our
Speaker 2: Bloomberg Interactive Broker studio. So great to have you here.
Speaker 2: We like to start big broad It's a new year.
Speaker 2: How are you looking at twenty twenty four and how
Speaker 2: it compares to coming off of the pandemic and then
Speaker 2: even pre pandemic.
Speaker 8: Sure, well, thank you for having me. It's great to
Speaker 8: be here. You know, we look at this year and
Speaker 8: we're absolutely excited about the alternative segments. To us, this
Speaker 8: is now sort of the second black Swan event we've
Speaker 8: been through as a firm. We were the first move
Speaker 8: and alternaive real estate, starting the business in five so
Speaker 8: we saw how these alternative assets did in the global
Speaker 8: financial crisis, and then we saw how they performed the pandemic.
Speaker 8: So coming out of this environment going to twenty twenty four,
Speaker 8: what you have as a situation where demographics are solid,
Speaker 8: they're strong, but supply has been choked off. So many
Speaker 8: asset classes that you mentioned have a ton of headwinds.
Speaker 8: When you think about what's happening in student housing, senior housing, medical,
Speaker 8: life science, tremendous tail ones right now is demands increasing,
Speaker 8: enrollments are up at schools, aging population, and there's no supply.
Speaker 8: So we look at this as some of the greatest
Speaker 8: vintage hears we're going to see for some time.
Speaker 3: I understand that for life sciences, medical, senior housing, student housing,
Speaker 3: but self storage isn't there a glut?
Speaker 8: You know, it's interesting self storage is a fantastic asset class,
Speaker 8: and it's really is one that you have to look
Speaker 8: market by market. It's a sort of not in my
Speaker 8: backyard asset. But the great thing about storage is people
Speaker 8: use it in good and bad times. It's life events.
Speaker 3: People never get rid of their They don't ever get.
Speaker 5: Rid of I have ever seen storage.
Speaker 3: It's so uniquely but it's it's isn't there a glut
Speaker 3: of it?
Speaker 8: I mean the way we do how we invest in
Speaker 8: all terms, because there's a lot of different ways to
Speaker 8: invest in terms, we like to invest in asset by asset,
Speaker 8: create portfolios and then sell to the larger players. So
Speaker 8: for us, there's a huge demand in owning these assets.
Speaker 8: It's consistent cash flow month to month leases, so in
Speaker 8: a inflationary environment you can really reprice. And so what
Speaker 8: we like to do is do the hard work, build
Speaker 8: portfolios and then sell to those groups that are really
Speaker 8: trying to get exposure to the asset class.
Speaker 3: Is it nice that self storage also as zero employees,
Speaker 3: so their overhead is so.
Speaker 8: Low it's amazing. It's the lowest default asset class. You
Speaker 8: get about the same rent per square foot as an apartment,
Speaker 8: but you really don't have a tenant. When someone leaves,
Speaker 8: you roll it up, you sweep it. So it's a
Speaker 8: great business. But the challenge with it is it's an
Speaker 8: easy asset class to build, so you have to go
Speaker 8: into markets where it's hard entitlements because it's not in
Speaker 8: my backyard. So you've got to find high barrier entry
Speaker 8: markets once you own those assets. Fantastic what happened.
Speaker 5: During the pandemic to all of those assets.
Speaker 8: So what happened it was fantastic, you know during the
Speaker 8: pandemic because at first people were nervous, what's going to
Speaker 8: happen to student housing, what is online learning? What's going
Speaker 8: to happen to your off campus housing environment?
Speaker 5: And self storage particularly?
Speaker 8: Yeah, I mean what happened with all these asset class
Speaker 8: is just consistent, consistent. People that were doing businesses online
Speaker 8: were using storage facilities. People were you know, when you
Speaker 8: thought about people moving, there was more flexibility. So people
Speaker 8: were starting to move into other markets.
Speaker 1: Right.
Speaker 8: You saw a lot of remote working, so people are traveling,
Speaker 8: moving and so they were using storage.
Speaker 5: And student housing. Same thing.
Speaker 8: Student housing was fantastic because really the students didn't want
Speaker 8: to be in mom or dad's basement. They wanted to
Speaker 8: stay in their off campus.
Speaker 5: Apartment with Nieces.
Speaker 2: My daughter wasn't in college yet, but my Nieces didn't
Speaker 2: care if she was on college. I think it was
Speaker 2: her first year, she was a freshman, and I think
Speaker 2: after having to stay home for a little bit, was like,
Speaker 2: I think, very happy to be at least on campus
Speaker 2: and had a whole dorm room to herself.
Speaker 8: And that's what's happening that you look at the Power
Speaker 8: five universities, enrollments are up, You're seeing rent increases eight
Speaker 8: to ten percent a year. There's just no supply.
Speaker 3: Talk to me about the type of student housing you do,
Speaker 3: because not all student housing is created equal. I know
Speaker 3: that the student housing that I experience and student housing
Speaker 3: that I experience isn't necessarily the same student housing that
Speaker 3: other folks have experienced.
Speaker 8: You know, it really is a different level of quality
Speaker 8: a lot of us experience.
Speaker 3: But is that what you say.
Speaker 5: Well, it's what it is.
Speaker 3: It's come with a beer soaked couch outside. You're couch outside.
Speaker 6: You know.
Speaker 8: I think that the key, the key with the business
Speaker 8: is it's all a bed bath parody. So it's like multifamily,
Speaker 8: but really what it is is not bed bath parody,
Speaker 8: three bedroom, three bath, But it's a real focus on gated,
Speaker 8: well lit. Safe safety is a big issue, So that's
Speaker 8: really a focus is creating an environment where you are
Speaker 8: providing safe environment study rooms, amenities, health clubs, et cetera.
Speaker 3: So what are these are? These? Are these student housing?
Speaker 3: Are these student houses that are multi multi unit that
Speaker 3: are affiliated with a college or university so a or
Speaker 3: is it are you essentially building like a huge building
Speaker 3: of apartments?
Speaker 8: So a big part of our business. We're sort of
Speaker 8: the largest owner of off campus housing, so that's not
Speaker 8: really affiliated with university. It's off campus, but the school
Speaker 8: loves it because it becomes an amenity to the school.
Speaker 8: They can say to a student when you're a sophomore, junior, senior,
Speaker 8: this is where you can live. So the schools like
Speaker 8: working with good managers. We also have a part of
Speaker 8: our business what we call our P three business where
Speaker 8: we're doing public to private partnerships with universities where we're
Speaker 8: working with and helping them build dormitory because a lot
Speaker 8: of these big universities don't have the capital. So we're
Speaker 8: going we've probably got thirty to thirty five universities that
Speaker 8: we are actually helping them with their housing.
Speaker 3: Hey, security deposits in student housing, Like, what's the average
Speaker 3: rate that you actually keep from those is these people
Speaker 3: just destroy their rooms.
Speaker 8: You know what, It's fascinating that if you provide a nice,
Speaker 8: high quality product and you walk the units on a
Speaker 8: regular basis and you have the willingness to kick children
Speaker 8: out if they're not taking care of it, and you're
Speaker 8: building their parents. Actually they're taking very good care of
Speaker 8: the units. And you know, we have a higher percentage
Speaker 8: of women a lot of times in these units, and
Speaker 8: so you're actually seeing it's not the type of thing.
Speaker 8: And that's when we started the business. It was student
Speaker 8: housing is an institucial asset class. It's animal house. There's
Speaker 8: no way this is going to be institutional. But I
Speaker 8: think people have seen how the industry has really developed
Speaker 8: and it's really become an asset class where insurance costs
Speaker 8: are lower than multifamily. We have better rent growth than multifamily,
Speaker 8: and you have really sticky, strong demand drivers.
Speaker 5: Well, and you have parents who are footing the bill, and.
Speaker 8: You have parents who are footing the bill. So from
Speaker 8: a credit standpoint, you think of owning a multifamily versus
Speaker 8: student housing, we have great credit.
Speaker 3: Sticky, not because you've spilled jello shots everywhere.
Speaker 5: I have to tell you, like I go and.
Speaker 8: I hang out with you too.
Speaker 5: There's a story there.
Speaker 2: I've helped my daughter move out and I am amazed
Speaker 2: at like some of the haroommates or like you will
Speaker 2: just leave that in the fridge. I'm like, nope, You're
Speaker 2: cleaning it all out. It's going to be clean because
Speaker 2: I want the security to posit right.
Speaker 1: That's right.
Speaker 3: I'm a tough good bringing me back, Carol. What's senior housing?
Speaker 5: So senior senior we're just getting older.
Speaker 8: People are getting older. But the challenge is, and there's
Speaker 8: different ways to invest in senior housing is.
Speaker 5: People getting older.
Speaker 8: But we're having memory issues, assisted dementia. So where we
Speaker 8: focus is on independent living, memory care, dementia, rental for
Speaker 8: and private pay. We don't focus on skilled nursing. That's
Speaker 8: more public pay issues. But when you look at what's happening,
Speaker 8: five million people turning eighty by more turning eighty by
Speaker 8: you know twenty thirty, there is not near enough supply
Speaker 8: right now. So we're going to wake up in four
Speaker 8: and five years and wonder where are we going to
Speaker 8: house all of the folks that have memory and health issues.
Speaker 8: It's almost impossible to take care of a loved one
Speaker 8: that has Alzheimer's dementia. So it is a very important
Speaker 8: assa class. It's hard, it's not easy. You need great
Speaker 8: operating partners. But it's a business that we're very bullsh
Speaker 8: on and we're seeing occupancies back to pre pandemic levels
Speaker 8: right now.
Speaker 3: How do you design for that just in the last
Speaker 3: thirty seconds that we have, you know, I.
Speaker 8: Think what you do is we have folks that have
Speaker 8: been taking care of dimension all se repairers for decades.
Speaker 8: So it's really about what paint colors you use, you know,
Speaker 8: how do you do how do you do carpets, how
Speaker 8: do you do the right caregivers? And so really for us,
Speaker 8: it's about choosing great local partners to work with.
Speaker 2: I've seen it firsthand. And there's safety issues, so you
Speaker 2: can't somebody can't just walk out. There's a lot of
Speaker 2: safety measures in place. Favorite favorite market right now, geography
Speaker 2: real quick.
Speaker 8: You know, I think right now we're active in the US,
Speaker 8: Canada and Europe, and so we love all those markets.
Speaker 8: So for us, if I'm near a great university, or
Speaker 8: near a great hospital system. You know, that's where we
Speaker 8: want to be, and so we can be really diversified
Speaker 8: the US and Europe, and so it's hard to pick
Speaker 8: a favorite market. We just love some of the fundamentals
Speaker 8: right now, all.
Speaker 5: Right, I can leave it there. Real fun.
Speaker 2: Thank you so much, a great trip back home to Chicago.
Speaker 2: Chris Christopher Merrill. He's the chief executive officer at Harrison Street.
Speaker 2: Joining us here in our Bloomberg Interactive Broker studio.
Speaker 3: What was your student housing like in college? Like old?
Speaker 2: I was here in New York City, so it's some
Speaker 2: old New York apartment buildings once I went off campus,
Speaker 2: but it was owned by the school. Yeah, yeah, there
Speaker 2: were some roaches.
Speaker 3: Okay, well, more stories to come.
Speaker 1: Romco Journal.
Speaker 5: How about you let me drive?
Speaker 3: No, no, no, no, alright please, I'll gravels.
Speaker 2: I want to try.
Speaker 8: It's a good question.
Speaker 1: Good This is the drive to the globe. Well Yoda
Speaker 1: don on Blueberg Radio.
Speaker 2: All right, everybody coming up on eighteen minutes left in
Speaker 2: today's training session, getting ready to wrap up the Friday
Speaker 2: trade here, wrap up the trading week. That's it around
Speaker 2: a little bit on the equity side of things today
Speaker 2: but our next guest says, the market is trading in
Speaker 2: an erratic mode.
Speaker 5: So it's like like you knew exactly the.
Speaker 3: Day it's going to be at exactly.
Speaker 5: It's kind of what we got to do a little bit.
Speaker 3: Yeah, it's a fair characterization.
Speaker 2: Let's get to it with Vance Howard. He's CEO at
Speaker 2: Howard Capital Management. He's on Zoom from Texas. Hey, Howard,
Speaker 2: it's so great to have you, Advance. Rather, it's great
Speaker 2: to have you back with us. I think I've done
Speaker 2: that to you before. You know, you got a name
Speaker 2: that's got I could call you Vance where I could
Speaker 2: call you Howard and it would work.
Speaker 9: How are you?
Speaker 1: You and me?
Speaker 5: Both, you and me both. It's good to have you here.
Speaker 5: Happy New Year.
Speaker 2: It is kind of a bouncing around kind of day,
Speaker 2: certainly on the equity side of things. I think we
Speaker 2: get some cross currents when it comes to earning, some
Speaker 2: cross currents when it comes to some of the economic
Speaker 2: data points. Talk to us a little bit about how
Speaker 2: you are seeing things, because you know, if you're a
Speaker 2: bunch of your mutual funds and your ETFs, they continue
Speaker 2: to really outperform. Tell us about the markets and what
Speaker 2: interesting trends you're seeing right now.
Speaker 9: Well, you know, our proprietary trend indicated HC on byline's positive,
Speaker 9: So that's telling us that the trend is clearly up.
Speaker 9: And you know, when I wrote that little article about
Speaker 9: the markets being a radic, you know, it's just just
Speaker 9: some throth that needs to kind of come off the market.
Speaker 9: You know, we had a great last quarter of twenty
Speaker 9: twenty three, and then the first the first three weeks
Speaker 9: going into four of twenty twenty four has been really
Speaker 9: robust and positive. So to have a little modest pullback
Speaker 9: and some volatilities is normal and it's going to happen.
Speaker 9: And of course Tesla dropping twelve percent didn't help anything either.
Speaker 3: Okay, we'll get to Tesla in a second, but I
Speaker 3: want to know how the proprietary technology that you have
Speaker 3: is giving you a bya signal even though you're seeing froth.
Speaker 9: Well, you know, even though you've got enough trending market,
Speaker 9: you're going to still have the markets that want to
Speaker 9: pull back two, three, four percent, and five percent or
Speaker 9: whatever the case may be. That's not going to change
Speaker 9: the trend. The trend's still going to be up. And
Speaker 9: all pullbacks as we see it right now, as long
Speaker 9: as the trend's up or vibe. So you know, any
Speaker 9: of this throwt that wants to work its way off.
Speaker 9: And you know a little bit of sell offs here
Speaker 9: in some market, some stocks that are selling off more
Speaker 9: than others. You really need to take a look at
Speaker 9: those because those are going to be some really great
Speaker 9: opportunities into twenty twenty four. I'm very bullish on twenty twenty.
Speaker 2: Four because of the trends that you are seeing and
Speaker 2: your trend lines.
Speaker 5: Yes, yeah, does it ever go wrong?
Speaker 9: Oh absolutely, it's wrong thirty percent of the time, but
Speaker 9: it's usually right seven also, so it has a good
Speaker 9: hit ratio. But you know, Carol, there's so much cash
Speaker 9: on the sidelines too. I mean, everybody's sitting on a
Speaker 9: mountain of cash, and these one and three treasuries. I mean,
Speaker 9: my goodness, if any of that money starts to come
Speaker 9: back into the market, you'll see it move higher.
Speaker 3: Where do you think that money goes?
Speaker 1: Though?
Speaker 3: Because Carol and I have had this debate over the
Speaker 3: past few months quite a bit. Yeah, is that money
Speaker 3: going to go to fixed income or is it going
Speaker 3: to go to equities? Because it's in cash right now
Speaker 3: for a reason, and that reason is that these money
Speaker 3: market funds are paying five percent and you can still
Speaker 3: get fixed income round there.
Speaker 8: You can.
Speaker 9: And let's say you're getting five percent on a money
Speaker 9: market but he drops rates. Now you're down to maybe
Speaker 9: four and a half or four three and seven, three
Speaker 9: and three, three and seven eighths or something. But if
Speaker 9: you think about that, if you're getting two and a
Speaker 9: half or three on a dividend paying stock with upside appreciation,
Speaker 9: all of a sudden, that cash becomes a little less
Speaker 9: attractive and dividend paying stocks become more attractive. But the
Speaker 9: market's also broadening out. Guys. One thing that we noticed
Speaker 9: in the last quarter of twenty twenty four is how
Speaker 9: small caps started to finally move up. And you know
Speaker 9: they when I say the throwt that was kind of
Speaker 9: the throt I was talking about, is because we did
Speaker 9: very well in the small caps, they ran out and
Speaker 9: we're seeing a pullback. But that pullback's nothing more than
Speaker 9: technical and healthy, that's what. That's what. That's just a
Speaker 9: period of consolidation. So lots of opportunity out there this year.
Speaker 2: So we what kind of though consolidation or do what
Speaker 2: kind of move to the downside? Do we need to
Speaker 2: see to get some of the froth out of the market.
Speaker 2: And I'm assuming you're looking specifically at the S and
Speaker 2: P five hundred, or maybe you're looking at it at
Speaker 2: that as well as the Nasdaq.
Speaker 9: Mainly looking at the Nasdaq. The S and P P
Speaker 9: five hundred has been trading, you know, quite well. But
Speaker 9: you know, when you take certain sectors like the small casts,
Speaker 9: because of the massive run up they had in the
Speaker 9: last quarter of last year in a couple of weeks
Speaker 9: in the beginning of this year, you know, some of
Speaker 9: this pullback and small caps are needed and warranted. They
Speaker 9: just can't go straight up. They've got a saw tooth
Speaker 9: their way up. So this is a Bible opportunity in
Speaker 9: small caps. And you know, we saw an explosive rally
Speaker 9: in the Semiconductor index, and you know when you have
Speaker 9: that big of an explosive rally, there's going to be
Speaker 9: a pullback's people are going to start to take profits.
Speaker 9: And that's kind of what we mean by throwf here
Speaker 9: is some of these sectors that have really done really,
Speaker 9: really well, you know they're due for a pullback, and
Speaker 9: they're Bible pullbacks too.
Speaker 3: Okay, let's talk Tesla now, because we are just under
Speaker 3: a month in two the start of the year, and
Speaker 3: already Tesla has lost twenty six and a half percent
Speaker 3: just this year. What are your thoughts on Tesla?
Speaker 9: Fortunately, and I'm very grateful, we didn't known any Tesla
Speaker 9: going into that sell off, so you know, we feel it.
Speaker 9: So that's great. So we got a lot of cash
Speaker 9: to work with. It's going to be a great stock
Speaker 9: to buy down here. And the way to trade this stock,
Speaker 9: guys is you're going to see it run up a
Speaker 9: little bit and then it'll come back and retest the
Speaker 9: lowst then you know that the bottom is pretty much
Speaker 9: set on Tesla. But it's a great company. I mean,
Speaker 9: the thing is is it's a true It's truly a
Speaker 9: wonderful company. If they start selling cars at twenty five
Speaker 9: or twenty six thousand, what they're talking about doing later
Speaker 9: this year and into next, you'll see a lot of
Speaker 9: revenue flow back into Tesla. But for a long term
Speaker 9: trader or investor, I'm sorry, Tesla I think is just
Speaker 9: an outstanding play. Especially why do you.
Speaker 3: Like it so much? Why do you think it's such
Speaker 3: a great company.
Speaker 2: Well, you talked about selling lower priced cars, if and
Speaker 2: nuts were candy BUTTSOO, don't have fun at Christmas is
Speaker 2: what I like to say. But I mean that has
Speaker 2: been kind of the goal, and they've cut prices a lot,
Speaker 2: but that's impacted margin. So I mean you feel comfortable
Speaker 2: enough that they're going to get there?
Speaker 9: Oh I do. And you know, don't ever bet against
Speaker 9: Elon Musk. I mean, some people hating, some people loving,
Speaker 9: but well, I sure would hate to bet against the
Speaker 9: guy because he's a true innovator. And the guy's young
Speaker 9: and still got a lot of energy, so there's a
Speaker 9: lot that he can do with the company like Tesla.
Speaker 2: You don't think he's distracted by Twitter, you don't worry
Speaker 2: about it and being distracted by something like our X.
Speaker 9: That guy is always going to be distracted by something.
Speaker 9: That's just the way his mind works. But when he
Speaker 9: stays focused on something, it usually usually comes out to
Speaker 9: be a very very good outcome and he'll be back
Speaker 9: into Tesla. He hasn't quit running Tesla. He's still all in.
Speaker 9: Was reading other day that he'd like doing more of it.
Speaker 9: But you know, you can't hardly you can't short Elon Musk.
Speaker 9: I just wouldn't do it.
Speaker 5: Okay, what about salesforce up six percent this year.
Speaker 2: We just got news that they're going to cut some
Speaker 2: more workers, are going to cut about seven hundred workers.
Speaker 2: And this is on top of what a year ago
Speaker 2: they cut their headcut by about ten percent.
Speaker 9: I love that. I love companies have recurring revenue, Carol,
Speaker 9: because this one is great. I mean, they've got a
Speaker 9: monthly subscription base, so they have recurring revenue coming each
Speaker 9: and every month. They don't have to sell a new
Speaker 9: product every month. Steep their head above water. And a
Speaker 9: lot of what they're doing financially is they're becoming more
Speaker 9: profitable by reducing overhead because they've had a lot of
Speaker 9: activist investors that are really sniffing around and sort of
Speaker 9: getting on top of them. And so this reduction sales
Speaker 9: in their salesforce I think is warranted needed. I think
Speaker 9: that was now that was throw off they could get
Speaker 9: rid of. So I think salesforce, from a technical standpoint
Speaker 9: and from a financial standpoint, I think it looks really
Speaker 9: attractive this year.
Speaker 2: So it's interesting. And then your other things that you
Speaker 2: like is something you've talked about. The small cap are
Speaker 2: the small growth area as well as the Russell you
Speaker 2: think that the small cap is an area of the
Speaker 2: market that you think investors have to continue to focus
Speaker 2: on and plow new money into. Just got about thirty seconds.
Speaker 9: I do. I think you buy that on a pullback,
Speaker 9: and I think it's pulled back now, like if you're
Speaker 9: looking at VBK, you're looking at the rustle two thousand.
Speaker 9: Either one, it's pulled back now or it's a bible opportunity.
Speaker 9: And as the market spreads out, which is going to
Speaker 9: this year, you're going to see other areas like small
Speaker 9: and midcamp start to move higher and start to regain
Speaker 9: some traction and look a lot more attractive going into
Speaker 9: twenty twenty four.
Speaker 5: Fans real quickly. Fifteen seconds. Do you care what the
Speaker 5: Fed does next week?
Speaker 9: Absolutely? I do, And I don't think they're going to
Speaker 9: do anything that it's going to surprise anybody. But I'm
Speaker 9: watching the FED very closest like everybody else.
Speaker 5: All Right, We're going to leave it there.
Speaker 2: Always get so much you pack it in and so
Speaker 2: appreciate it. That's Vance Howard, of course, he is CEO
Speaker 2: at Howard Capital Management, joining us on Zoom from Texas.
Speaker 2: Just got a few minutes left in the trade folks,
Speaker 2: and we've got the SMP down about four points. It's
Speaker 2: the Dow up about fifty two, and the NAZAG down
Speaker 2: just about sixty. This is Bloomberg.
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