WEBVTT - Nasdaq's Dillard: The SPACs, IPO Pipeline Remains Strong 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.560 at Bloomberg dot com slash podcast. I want to get 0:00:22.640 --> 0:00:27.440 to a NASDAK guest. Lauren Dillard joins us now. She's 0:00:27.480 --> 0:00:30.960 head of Intelligence investment Intelligence at at NASDAC, where she's 0:00:31.280 --> 0:00:34.080 an executive vice president. And Lauren, You've got a lot 0:00:34.120 --> 0:00:38.200 of great experience, including um working at the Carlisle Group. 0:00:38.640 --> 0:00:41.720 But you know, the the NASDAC name jumped out at 0:00:41.720 --> 0:00:44.879 me today because of UM, the rotation that we've been 0:00:44.920 --> 0:00:47.479 seeing lately and then the huge jump today. Do you 0:00:47.520 --> 0:00:51.840 have any thoughts on value versus growth, Nasdaq versus Dow, 0:00:52.320 --> 0:00:57.800 um Tech versus old economy. Well, first of all, thank 0:00:57.800 --> 0:01:00.040 you for having me, and I am am Apell, a 0:01:00.120 --> 0:01:02.800 time user and they joined the Nazack one hundred at 0:01:02.800 --> 0:01:04.400 the end of last year, so let's make sure we 0:01:04.640 --> 0:01:07.600 speak to that first. UM. Look, I think a couple 0:01:07.640 --> 0:01:13.200 of things, UM, what you're certainly seeing our investors expressing, 0:01:13.760 --> 0:01:18.520 you know, concerns around rates UM frankly, some uncertainty and 0:01:18.600 --> 0:01:21.639 moving maybe into more cyclical sectors that were out of favor. 0:01:21.720 --> 0:01:24.880 If you look back to March of last year, UM, 0:01:25.000 --> 0:01:28.880 the NAZAK composite has almost doubled. So UM. That was 0:01:28.920 --> 0:01:31.360 certainly an expression of a belief in what we would 0:01:31.440 --> 0:01:34.240 call the you know, the digital economy that people certainly 0:01:34.280 --> 0:01:37.759 believe in. NAZAC one hundred represents UM. We saw position 0:01:37.840 --> 0:01:40.839 degree brillion of influence. But I think what you're seeing 0:01:40.840 --> 0:01:43.200 now is is a broadening expression with some of the 0:01:43.280 --> 0:01:47.480 uncertainty that's going on. So, Lauren, one of the things 0:01:47.560 --> 0:01:50.320 we've really seen over the last twelve months, it's really 0:01:50.320 --> 0:01:56.559 been fascinating, has been the really the surge in specs UM. 0:01:56.680 --> 0:01:59.040 They you know, started out with a trickle and we've 0:01:59.040 --> 0:02:01.440 seen specs over the years, but it's been really a 0:02:01.480 --> 0:02:03.880 small part of the market. It's just exploded over the 0:02:03.960 --> 0:02:06.120 last twelve months. What do you make at it from 0:02:06.120 --> 0:02:10.799 your perspective at the NASDAC, Yeah, Um, you're exactly right. 0:02:10.840 --> 0:02:12.919 I think in two thousand fourteen we had a stat 0:02:12.960 --> 0:02:15.679 that they counted for about three percent of the deals 0:02:15.720 --> 0:02:19.480 and year to date, in one we have welcomed a 0:02:19.560 --> 0:02:23.000 hundred and forties six packs once the NAJAC. So UM, 0:02:23.040 --> 0:02:26.800 it's definitely, ah, you know, a significant way that UM 0:02:26.919 --> 0:02:30.040 people are accessing the public markets. I mean as a 0:02:30.080 --> 0:02:33.680 market provider, I think, you know, we saw several years 0:02:33.720 --> 0:02:35.760 and the States back of course too to my time 0:02:35.800 --> 0:02:39.240 at the Carlover where companies were staying private longer UM 0:02:39.280 --> 0:02:41.440 they were in the hands of private investors, and that 0:02:41.560 --> 0:02:44.480 was certainly a trend we were seeing. Now you're seeing 0:02:44.480 --> 0:02:48.000 companies accessing the public markets, whether it's via I p 0:02:48.120 --> 0:02:50.760 O s, whether it's via direct listings. And then of 0:02:50.800 --> 0:02:54.119 course back I think, of course there's an important sort 0:02:54.120 --> 0:02:59.760 of education UM market understanding underpinning that that is there 0:02:59.840 --> 0:03:02.560 by it UM. I I actually believe if you think 0:03:02.600 --> 0:03:06.280 about value creation UM for companies, that accessing the public 0:03:06.280 --> 0:03:08.920 market and allowing those companies to be in the hands 0:03:08.919 --> 0:03:11.720 of investors during more of the value creation is a 0:03:11.760 --> 0:03:15.240 long term a good thing. I think it's theoretically to 0:03:15.320 --> 0:03:19.800 me it's so cool because it's like the democratization of 0:03:20.720 --> 0:03:23.799 earlier stage investing, or it's someone called it a poor 0:03:23.800 --> 0:03:27.440 man's UM pe uh you know, I'm not going to 0:03:27.560 --> 0:03:29.680 be able to get into a private equity deal. I'm 0:03:29.680 --> 0:03:32.359 not a sophisticated investors, so I think it'd be sweet 0:03:32.400 --> 0:03:35.120 to take a shot at a couple hundred of a spack. 0:03:35.680 --> 0:03:40.200 The thing is, Um, it's it's gone beyond Haywire at 0:03:40.200 --> 0:03:42.440 this point. I mean, there's a company called just another 0:03:42.560 --> 0:03:47.120 acquisition corps Um. The numbers that you named already, Laura, Laura, 0:03:47.200 --> 0:03:49.960 are are huge. And you know C C I V, 0:03:50.120 --> 0:03:54.040 for example, trading at like seventy dollars um for a 0:03:54.080 --> 0:03:57.520 while and then dropped like sixty the deal was announced 0:03:57.520 --> 0:04:01.560 with Lucid. Isn't this a problem for retail investors? I mean, 0:04:01.600 --> 0:04:04.800 aren't they getting in a little too deep? I mean, 0:04:05.040 --> 0:04:07.560 I think it goes back to market education. It will 0:04:07.560 --> 0:04:10.280 be interesting to see what our regulators decided to look 0:04:10.320 --> 0:04:13.160 at their obviously looking at some of the trends going 0:04:13.200 --> 0:04:16.680 on with lit markets, um with intelligent ticks if you 0:04:16.680 --> 0:04:18.800 want to get into some of the market structure. So 0:04:19.200 --> 0:04:23.000 you know, the regulators will have to decide where to look. Again. Um, 0:04:23.040 --> 0:04:25.400 I think you're probably right. There's a fine line between 0:04:25.520 --> 0:04:27.839 accessing the public market, which is a good thing. I 0:04:27.880 --> 0:04:31.920 mean our whole belief at Nasadak is championing inclusive growth 0:04:31.960 --> 0:04:34.680 and prosperity. So it aligns with market access, and it 0:04:34.720 --> 0:04:38.640 aligns with getting value creation into the hands of investors. 0:04:38.640 --> 0:04:41.920 But they are they are riskier and people have to 0:04:42.000 --> 0:04:45.480 understand their rights. Lauren, what's the outlook for I p 0:04:45.600 --> 0:04:49.000 O S in one. It looks like, um, you know, 0:04:49.040 --> 0:04:52.400 the stock markets at a near all time highs seems 0:04:52.400 --> 0:04:55.400 and we have an economy reopening. Seems like conditions will 0:04:55.400 --> 0:05:00.599 look pretty good. Yeah, the pipeline is incredible, really strong. 0:05:01.200 --> 0:05:06.080 Um And already, frankly, have we've seen more companies UM. 0:05:06.120 --> 0:05:07.800 I think it's a hundred and forty eight and I'm 0:05:07.839 --> 0:05:10.880 quoting that number UM Access actually the public the public 0:05:10.880 --> 0:05:14.400 markets year to date, so it's we've already are seeing that. 0:05:14.560 --> 0:05:17.200 I think that's a good thing. Again, going back to investors, 0:05:17.320 --> 0:05:19.760 UM And and certainly you would argue the window is 0:05:19.800 --> 0:05:24.080 open and we still have a strong pipeline. UM. I 0:05:24.120 --> 0:05:26.720 just want to quickly ask you about trading. What are 0:05:26.760 --> 0:05:31.960 your thoughts on the whole pay for order flow situation? 0:05:32.040 --> 0:05:35.240 Since we're talking about this already, might as well get 0:05:35.360 --> 0:05:39.040 get into it. UM. You're a market provider. This touches 0:05:39.279 --> 0:05:43.160 obviously everything that you do, UM does. Does that worry 0:05:43.200 --> 0:05:44.680 you or do you think we're going to be able 0:05:44.720 --> 0:05:48.720 to find a decent solution to it? So I mean, 0:05:48.760 --> 0:05:52.200 as a capital markets operator, we believe obviously in fair 0:05:52.320 --> 0:05:56.359 and open markets and form all market participants. So we 0:05:56.440 --> 0:05:59.000 have been saying that the rise of the retail investor 0:05:59.040 --> 0:06:03.000 participating in our markets is a good thing UM, and 0:06:03.240 --> 0:06:06.520 it's certainly reflected in UM in the numbers we've seen 0:06:06.600 --> 0:06:08.520 and frankly, in a time if you look back from 0:06:08.520 --> 0:06:11.760 a year from now, the volumes of that have that 0:06:11.800 --> 0:06:14.720 have transacted on the markets between equities and options, it's 0:06:14.760 --> 0:06:18.039 extraordinary and we as a market provider are very frankly 0:06:18.120 --> 0:06:21.200 proud of that resiliency. UM. It's something we've invested in 0:06:21.600 --> 0:06:24.240 as you look forward for retail, for retail trading and 0:06:24.240 --> 0:06:27.320 the discussions that the the SEC and SENERA are looking at. 0:06:27.600 --> 0:06:30.000 You know, we've engaged with our regulators for close to 0:06:30.040 --> 0:06:34.680 two decades on you know, very arguably esoteric but really 0:06:34.720 --> 0:06:40.960 important market structure concepts, having lip markets, having price discovery UM. 0:06:40.960 --> 0:06:45.159 We're obviously subject to regulatory oversight. UM Intelligent tixs you 0:06:45.240 --> 0:06:49.880 heard in the SEC discussions around tick sizes, um and 0:06:50.000 --> 0:06:53.080 all of that is with with the lens of making 0:06:53.480 --> 0:06:58.160 you know, price discovery. Financial markets serve all investors, including 0:06:58.200 --> 0:07:01.400 retail investors, so without into the nuances of payment for 0:07:01.520 --> 0:07:04.239 order flows. I think broadly speaking, we as a capital 0:07:04.320 --> 0:07:07.400 markets provider want there to be fair and transparent markets. 0:07:07.520 --> 0:07:10.160 We would like these investors to stay in the market 0:07:10.200 --> 0:07:13.640 long term. I think that's very important to us. Hey, Lauren, 0:07:13.680 --> 0:07:15.720 thanks so much for joining us. We appreciate it. We 0:07:15.760 --> 0:07:17.960 always like speaking to smart people that come out of 0:07:17.960 --> 0:07:20.360 the Robin School of Business at the University of Richmond, 0:07:20.760 --> 0:07:23.280 my alumn I'm an alumnus there, so it's great to 0:07:23.280 --> 0:07:25.480 speak with you. Lauren. Lauren is the e d P 0:07:25.960 --> 0:07:30.320 Head of Investment Intelligence at the NASTAC Private What a 0:07:30.360 --> 0:07:32.680 cool title. What a cool I mean, what that's an 0:07:32.680 --> 0:07:34.560 awesome title. I'd love to have that, But also what 0:07:34.600 --> 0:07:36.480 a cool career. I mean she managed more than thirty 0:07:36.480 --> 0:07:41.080 billion dollars in assets across six international offices at the 0:07:41.120 --> 0:07:44.320 Carlisle Group, which is already an incredible name, and then 0:07:44.800 --> 0:07:47.760 moving on to Nasdaq, which is kind of the you know, 0:07:47.920 --> 0:07:51.560 the modern story of equity markets. I mean, the old 0:07:51.600 --> 0:07:53.760 stuff is like old. And you know I was talking 0:07:53.760 --> 0:07:56.960 about the Dow Jones Industrial Index earlier. The kids don't 0:07:56.960 --> 0:07:59.560 even don't even talk about that. John Farrell, Yeah, you 0:07:59.640 --> 0:08:02.000 can't talk about you can't quote the down joys industrials 0:08:02.080 --> 0:08:04.320 to John Ferrey gets all upset. So we'll have more 0:08:04.400 --> 0:08:11.280 coming up. This is Bloomberg, all right, Matt Miller. I'm 0:08:11.280 --> 0:08:13.160 gonna tell you one of my bucket list items which 0:08:13.160 --> 0:08:15.760 you probably wouldn't guess, and that is to take a 0:08:15.800 --> 0:08:18.560 trip on one of those big ocean going cargo ships, 0:08:18.560 --> 0:08:19.760 you know, the ones to see out there on the 0:08:19.760 --> 0:08:23.000 ocean with a container ships stacked like twenty high. I 0:08:23.000 --> 0:08:25.240 have no idea how those things float, how they don't 0:08:25.240 --> 0:08:27.520 tip over, how the cargo doesn't fall into the sea. 0:08:27.600 --> 0:08:30.120 But maybe our next guest can help me hit your 0:08:30.200 --> 0:08:34.240 ride there. Gary Vogel, CEO and director of Eagle Bulk Shipping. 0:08:34.240 --> 0:08:37.040 They're based at Stanford, Connecticut. Boy, it's a public company 0:08:37.080 --> 0:08:39.240 trades on the nastac on aner the symbol e g 0:08:39.520 --> 0:08:42.280 l E. The stocks had a great run as economy 0:08:42.320 --> 0:08:44.640 start to open up, up eighty six percent year to date, 0:08:44.679 --> 0:08:47.800 up eleven percent over the trailing twelve months. Gary, thanks 0:08:47.840 --> 0:08:50.040 so much for joining us here. Boy. When we talk 0:08:50.080 --> 0:08:53.360 to you, Gary, we get a great, great bird's eye 0:08:53.440 --> 0:08:56.960 view of the global economy. What can you tell us 0:08:57.000 --> 0:08:59.360 about global shipping and what that's what that's telling you 0:08:59.360 --> 0:09:02.959 about the global reopening? Yeah, well, as you said, it's 0:09:03.040 --> 0:09:06.400 it's really is about this UM. This reopening, I mean 0:09:06.840 --> 0:09:09.839 was severely impacted. It was a tale of two halves 0:09:09.920 --> 0:09:12.680 the first half of the year, a real UM a 0:09:12.760 --> 0:09:16.000 real demand shock. Uh. You know, dry bulk is highly 0:09:16.040 --> 0:09:19.240 correlated to global GDP. We actually don't carry containers. Are 0:09:19.280 --> 0:09:24.160 ships carry you know, bulk cargoes commodities such as grain, minerals, cement, 0:09:24.720 --> 0:09:28.040 and fertilizer. But but really you know, building building products 0:09:28.040 --> 0:09:30.480 if you will, for the global economy. And so, but 0:09:30.559 --> 0:09:33.320 what we've seen is by the fourth quarter UM a 0:09:33.360 --> 0:09:36.040 real return and many many of our commodities to pre 0:09:36.120 --> 0:09:41.120 COVID levels. And uh, that's that's also continued to into 0:09:41.120 --> 0:09:43.560 the first quarter. And that's also on the back of 0:09:43.640 --> 0:09:47.080 what's been fairly muted supply growth as well. On terms 0:09:47.120 --> 0:09:49.040 of ships. So, but these are ships that I mean, 0:09:49.080 --> 0:09:50.760 you send them a long way, right, they go all 0:09:50.760 --> 0:09:54.920 the way around the world. Um not just like from 0:09:55.720 --> 0:10:01.440 uh Charlotte too. I don't know absolutely do you ever 0:10:01.559 --> 0:10:04.680 have stowaways or do you Is there a way for 0:10:05.440 --> 0:10:08.160 Paul to to just buy a ticket and take a 0:10:08.240 --> 0:10:11.720 ride from like the Horn of Africa to I don't know, 0:10:11.920 --> 0:10:15.760 Um Australia, is that is that a possibility? Well, we 0:10:15.840 --> 0:10:19.520 we don't. We don't take passengers. They're they're on occasion. 0:10:19.600 --> 0:10:22.439 There are issues with stowaways, but but the industry deals 0:10:22.480 --> 0:10:24.400 with that. But we don't take passengers on board our 0:10:24.400 --> 0:10:27.679 ships now, so sorry about that. Gary. You know, one 0:10:27.720 --> 0:10:30.400 of the things we've seen, and again I'm really fascinated 0:10:30.440 --> 0:10:33.000 by the global shipping business in the big ships that 0:10:33.040 --> 0:10:35.400 you guys operate. Uh, but I've seen, you know a 0:10:35.400 --> 0:10:37.480 lot of stories over the past a month or two 0:10:37.480 --> 0:10:40.679 about ships having a hard time unloading their goods in 0:10:40.800 --> 0:10:44.120 various ports around the world, perhaps due in part two, 0:10:44.480 --> 0:10:46.679 you know, that just aren't enough workers there, maybe due 0:10:46.720 --> 0:10:49.680 to COVID to to you know, unload things and load things. 0:10:49.800 --> 0:10:53.040 And what are you finding in that regard? Yeah, I 0:10:53.080 --> 0:10:56.040 think what you're speaking to again is the headline has 0:10:56.080 --> 0:10:59.439 been about the container industry and and and significant congestion. 0:10:59.800 --> 0:11:03.000 You fortunately dry balk we go to different terminals, and 0:11:03.200 --> 0:11:07.320 notwithstanding certain areas of congestion, in general, UM the trade 0:11:07.320 --> 0:11:10.280 flows have been fairly normal, and so we've been able 0:11:10.320 --> 0:11:13.600 to to meet demand, increase demand, and and and get 0:11:13.600 --> 0:11:16.480 cargoes on and off ships. Now with the exception really 0:11:16.520 --> 0:11:18.840 of the second quarter into the third quarter of last year, 0:11:19.240 --> 0:11:21.600 as as countries you know, send people home to stop 0:11:21.640 --> 0:11:25.000 the spread of COVID nineteen. But we're really operating, you know, 0:11:25.080 --> 0:11:27.920 quite efficiently. Now. You know, one of the one of 0:11:27.920 --> 0:11:30.839 the challenges last year, which if I can take a moment, 0:11:30.880 --> 0:11:34.840 it was the humanitarian crisis of trying to repatriate our seafarers, 0:11:34.840 --> 0:11:37.800 our crew on board the ship. We typically work about 0:11:37.800 --> 0:11:41.520 six months, and as countries enacted these trade travel restrictions 0:11:41.559 --> 0:11:44.600 excuse me, um, you know, these people were unable to 0:11:44.600 --> 0:11:47.880 get home and and so there's been a real push 0:11:47.920 --> 0:11:50.920 within the industry. We were fortunately able to to you know, 0:11:51.160 --> 0:11:54.120 UM return to normal by by November, and the industry 0:11:54.200 --> 0:11:57.200 is focused on it now to ensure that doesn't happen again. 0:11:57.240 --> 0:12:00.120 But that was probably the biggest challenge we faced as 0:12:00.120 --> 0:12:03.439 an industry last year. Terrifying. Actually, there's a Bloomberg Business 0:12:03.440 --> 0:12:08.600 Week story about not shipping employees, but cruise employees that 0:12:09.320 --> 0:12:14.840 faced really traumatic conditions. UM. Glad that's over for for 0:12:14.880 --> 0:12:18.440 your people, Gary, and that the um that the industry 0:12:18.840 --> 0:12:22.040 seems so healthy right now. I wonder what the biggest 0:12:22.040 --> 0:12:25.080 concern is going forward? What are the headwinds so to speak? 0:12:25.520 --> 0:12:29.600 There's literally no pun intended. But is fueling an issue? 0:12:29.679 --> 0:12:32.079 Is the greening of the earth a problem? Or is 0:12:32.120 --> 0:12:33.920 the way you can is there a good way you 0:12:33.920 --> 0:12:36.480 can work with that? Yeah? So a few things to unpack. 0:12:36.520 --> 0:12:40.320 Their one is um, you know that the the you know, 0:12:40.440 --> 0:12:44.040 challenge for for shipping rates historically has been an oversupply 0:12:44.320 --> 0:12:47.600 of tonnage. In fact, dry boat demand has grown in 0:12:48.120 --> 0:12:50.640 eighteen of the last twenty years, the two out hours 0:12:50.760 --> 0:12:53.680 being the financial crisis and last year COVID, So we 0:12:53.760 --> 0:12:56.120 haven't had a demand issue. It's really as I mentioned, 0:12:56.480 --> 0:12:59.920 linked to global GDP growth, So supply we've had an oversupply, 0:13:00.160 --> 0:13:02.880 but at the moment, supply of ships is actually at 0:13:02.880 --> 0:13:05.520 a twenty five year low at just six percent of 0:13:05.559 --> 0:13:07.720 the of the on the water fleet. So I think 0:13:07.720 --> 0:13:10.319 that boads very well as you have you know, demand 0:13:10.360 --> 0:13:13.320 and GDP growth coming back with a limited amount of 0:13:13.320 --> 0:13:16.840 ships supply coming in and you mentioned the greening. I mean, 0:13:17.440 --> 0:13:21.760 you know, emissions reduction and decarbonization is on the forefront 0:13:21.800 --> 0:13:24.760 of all the discussions within shipping and and dry bulk 0:13:24.880 --> 0:13:28.200 is no exception. And and as as we are looking 0:13:28.200 --> 0:13:30.440 towards zero emission vessels to get to the I m 0:13:30.440 --> 0:13:34.240 O targets of a reduction of fifty by fifty and 0:13:34.360 --> 0:13:37.920 so because of that uncertainty about what future regulations will 0:13:37.960 --> 0:13:42.440 mean is also uh, you know, a reduction of ordering 0:13:42.480 --> 0:13:45.000 because of that uncertainty. Right, It's it's an impediment to 0:13:45.120 --> 0:13:48.120 ordering because you simply don't know how long the vessel 0:13:48.200 --> 0:13:51.079 you order today will actually be allowed to trade due 0:13:51.120 --> 0:13:55.320 to emissions regulations. All right, It's really interesting and we 0:13:55.320 --> 0:13:57.240 could do that's another thing. We could do a whole 0:13:57.240 --> 0:14:00.160 show on right now. And I talk so in go. 0:14:00.240 --> 0:14:03.520 I talked to a lot um up here well up 0:14:03.520 --> 0:14:06.400 in Copenhagen, and he talks a lot about the fuel 0:14:06.480 --> 0:14:08.400 issue as well. Gary. It's been great to have you 0:14:08.400 --> 0:14:10.920 on the program. Thanks very much. It's a bummer that 0:14:10.960 --> 0:14:13.920 you don't even let a few people travel as passengers, 0:14:13.960 --> 0:14:16.199 because I know, Paul, it's not just your dream a 0:14:16.240 --> 0:14:19.320 lot of people want to get on a shipping, a 0:14:19.360 --> 0:14:21.520 container ship or a dry good ship and and take 0:14:21.560 --> 0:14:23.800 a long trip, maybe as a stowaway. It's a little 0:14:23.840 --> 0:14:29.240 bit easier, Gary Vogel there from Eagle bulk Shipping. Let's 0:14:29.280 --> 0:14:31.600 get back to the markets, because, of course Greg was 0:14:31.600 --> 0:14:34.640 talking about the rally that we're seeing in equities and 0:14:34.720 --> 0:14:38.640 not the chicken sandwich maker. David Dietz joins us right now. 0:14:38.680 --> 0:14:42.880 He's managing principal and senior portfolio strategist at Peapack Private 0:14:42.880 --> 0:14:47.560 Wealth Management. David, Um, I I wonder when I look 0:14:47.600 --> 0:14:49.560 at this, and I've been asking all of our guests today, 0:14:50.200 --> 0:14:52.640 um is the rotation that we saw, kind of a 0:14:52.640 --> 0:14:57.840 surprised rotation over from UM from growth to value as 0:14:57.880 --> 0:15:01.200 we see the NASDAC today rally and dow UM not 0:15:01.320 --> 0:15:06.080 doing nearly as well well. Certainly, UM, what's been driving 0:15:06.080 --> 0:15:09.800 the tune tune here is this rapid rising interest rates 0:15:09.800 --> 0:15:11.800 from the start of the year with the tenure treasury 0:15:11.840 --> 0:15:15.480 below one percent, got up uh close to about one 0:15:15.520 --> 0:15:19.200 point six percent, and that did feed this huge rotation 0:15:19.200 --> 0:15:22.359 into stocks that will do well with the economic reopening. 0:15:22.800 --> 0:15:25.960 UM banks of course can loan money at higher rates. UH, 0:15:26.080 --> 0:15:28.320 some of this uptick and interest rates is due to 0:15:28.440 --> 0:15:32.400 inflationary fears, and so commodities, energy industrial is doing well. 0:15:32.600 --> 0:15:35.640 And of course they rotated out of the NAZDAC the 0:15:35.760 --> 0:15:38.440 David territory yesday, David today. Of course it's going the 0:15:38.480 --> 0:15:42.040 other way around, David. Doesn't that march higher for rates? 0:15:42.440 --> 0:15:44.360 Doesn't it have a lot further to go? I mean, 0:15:44.360 --> 0:15:46.920 I've talked to a few people who are real outliers. 0:15:46.920 --> 0:15:50.680 Scott Minored, for example, thinks the tenure could go negative. 0:15:51.000 --> 0:15:54.160 But most other people are saying, look, with the incredible 0:15:54.200 --> 0:15:58.360 growth ahead of us. Bloomberg Economics UM did a survey 0:15:58.840 --> 0:16:03.280 UH and found seven point six percent expectation in nominal 0:16:03.320 --> 0:16:06.840 GDP growth, then rates have to keep going higher from here. 0:16:08.280 --> 0:16:10.320 You know. I tell my clients that said, there's only 0:16:10.400 --> 0:16:14.040 one thing more difficult than predicting the direction of the 0:16:14.040 --> 0:16:17.800 stock market, and that's predicting the direction of interest rates. 0:16:17.800 --> 0:16:21.880 But I'll tell you this, If the vaccine rollout continues 0:16:21.920 --> 0:16:26.680 to march along well, if the stimulus is well distributed 0:16:26.720 --> 0:16:29.440 and we see another infrastructure bill coming down the pike, 0:16:30.040 --> 0:16:33.480 If UM, the Federal Reserve does not try and somehow 0:16:33.640 --> 0:16:37.440 captorizing interest rates. If consumer confidence continues to go in 0:16:37.440 --> 0:16:39.720 the right direction, I do think there will be a 0:16:39.760 --> 0:16:43.000 normalization of the economy. That will mean a normalization of 0:16:43.080 --> 0:16:46.240 interest rates. Remember in two thousand nineteen interest rates range 0:16:46.280 --> 0:16:49.200 between two point eight and one eight. Why wouldn't they 0:16:49.240 --> 0:16:53.040 go back to those levels? So I think that's the 0:16:53.520 --> 0:16:56.840 path of least resistance, all right, given that bullish background, David, 0:16:56.840 --> 0:16:59.000 what are some of the names you like right here 0:16:59.000 --> 0:17:01.760 that you guys are working on. Yeah. Absolutely, So you've 0:17:01.800 --> 0:17:03.880 got to stay with tech. We've got the long term 0:17:03.960 --> 0:17:08.119 themes um uh tail winds for increase use of technology. 0:17:08.280 --> 0:17:10.960 We've heard about the chip shortage. So I want to 0:17:10.960 --> 0:17:15.240 go with the number one chip producer in the world, 0:17:15.520 --> 0:17:18.439 which is Intel. And what I like about Intel it 0:17:18.480 --> 0:17:21.600 has a cyclical twist to it because it's the chip manufacturer. 0:17:21.600 --> 0:17:24.439 It also has a value twist to it because of 0:17:24.520 --> 0:17:27.440 its valuation. You've got a too, almost two and a 0:17:27.480 --> 0:17:30.840 half percent dividend you're creating about twelve times earnings, is 0:17:30.880 --> 0:17:33.760 the largest in the world. And also it allows you 0:17:33.840 --> 0:17:40.000 for participation in for example, artificial intelligence, autonomous driving, uh, 0:17:40.080 --> 0:17:42.439 the movement to the cloud, and so you kind of 0:17:42.440 --> 0:17:45.000 have your best of both worlds. You've got the tech exposure, 0:17:45.040 --> 0:17:48.360 plus you've got your you know, your value exposure, which 0:17:48.400 --> 0:17:51.119 I think it's going to do well this year. I 0:17:51.160 --> 0:17:54.479 think I heard you mentioned the word infrastructure, and for 0:17:54.560 --> 0:17:57.359 me this is one of the most exciting things about 0:17:57.400 --> 0:18:00.520 the not too distant future. We all know the two 0:18:00.560 --> 0:18:04.960 trillion dollar fiscal stimulus package is going to be uh, 0:18:05.040 --> 0:18:07.040 we're we're likely to see it past in the next 0:18:07.080 --> 0:18:10.359 few days. But for me, even more exciting is thinking 0:18:10.359 --> 0:18:13.880 about what President Biden will do in terms of stimulus 0:18:13.920 --> 0:18:18.200 spending or infrastructure spending. What do you expects there? So, 0:18:18.520 --> 0:18:21.399 you know, I think that you know, once they notch 0:18:21.520 --> 0:18:24.160 this early win in the Biden administration under their belt 0:18:24.200 --> 0:18:28.200 with the near two trillion regular stimulus, I think they 0:18:28.320 --> 0:18:31.320 are going to push ahead and get something in infrastructure. 0:18:31.560 --> 0:18:33.879 What I think is going to be interesting here is 0:18:33.920 --> 0:18:37.159 there's not just gonna be bridges, tunnels, and roads. I 0:18:37.160 --> 0:18:39.800 think it's also going to include, um, you know, the 0:18:39.840 --> 0:18:43.560 expansion of the Internet to those who have less access 0:18:43.600 --> 0:18:46.800 to it. So my stock for my clients here for 0:18:46.840 --> 0:18:50.080 that is Verizon. Now, Verizon is the stock that still 0:18:50.119 --> 0:18:52.560 hasn't come back to where it was in late ninety nineties. 0:18:52.880 --> 0:18:56.359 But if you're talking about five G, Verizon is your play. 0:18:56.440 --> 0:19:00.000 They've just spent big time to get more spectrum um 0:19:00.080 --> 0:19:03.439 there by far the best wireless service out there, and 0:19:03.480 --> 0:19:06.240 so I think that you know, uh, with your four 0:19:06.240 --> 0:19:08.520 and a half percent divedn about twelve times, earning the 0:19:08.600 --> 0:19:11.879 Horizon is a low risk way to play expansion of 0:19:11.880 --> 0:19:15.000 the Internet that could be fueled by an infrastructure package. 0:19:15.560 --> 0:19:18.320 About thirty seconds, I know, fightsers on your list, has 0:19:18.359 --> 0:19:20.960 this been a pre pandemic players? Is this your play 0:19:21.119 --> 0:19:25.119 on their their vaccine? Yeah? You know, I think it's both. 0:19:25.400 --> 0:19:28.520 So the stuck ran up to about forty three on 0:19:28.720 --> 0:19:31.280 the excitement of being the first to get the emergency 0:19:31.359 --> 0:19:34.919 use authorization from the FDA up there, and now it's 0:19:34.960 --> 0:19:38.280 back down to thirty four. Why is that because there's 0:19:38.280 --> 0:19:41.480 two reasons. One is, if we have this big economic expansion, 0:19:41.560 --> 0:19:44.240 what does that do to healthcare? Do people use more drugs? 0:19:44.280 --> 0:19:47.560 Probably not. Second, there is still concerned as to whether 0:19:47.760 --> 0:19:50.639 heavy handed legislation comes out of Washington, but I think 0:19:50.720 --> 0:19:54.080 that's well priced into the stock. Remember, healthcare is the 0:19:54.119 --> 0:19:56.159 other growth sector. You've got about a four and a 0:19:56.200 --> 0:19:59.320 half percent dividend on fires about thirteen fourteen times earnings, 0:19:59.359 --> 0:20:02.840 the best d pipeline, and also great exposure overseas who 0:20:02.880 --> 0:20:05.520 wanted the same kind of deluxe health care that we have. 0:20:05.840 --> 0:20:09.719 So I think this is a nice way to participate 0:20:09.760 --> 0:20:12.720 in continued growth in the stock market without taking a 0:20:12.720 --> 0:20:15.320 whole lot of risk. Hey, David, thanks so much. We 0:20:15.359 --> 0:20:18.560 really appreciate it. As always, nobody pitches a name better 0:20:18.600 --> 0:20:20.800 than David Deeds. He gets it all out there in 0:20:20.840 --> 0:20:23.480 twenty to thirty seconds. Nobody does it better David Deed's 0:20:23.520 --> 0:20:27.240 managing principle. And see your portfolio strategist at Pepack Private 0:20:27.240 --> 0:20:33.879 Wealth Management in Lovely Summit, New Jersey. Let's take a 0:20:33.880 --> 0:20:36.760 look at the auto business. Man, I know you're a big, 0:20:36.760 --> 0:20:39.239 big auto van gear head. Let's take a look at 0:20:39.240 --> 0:20:42.359 the car parts business. There's nobody better to do that 0:20:42.400 --> 0:20:44.920 with than Left Peaker. He's the CEO of car Parts 0:20:45.080 --> 0:20:47.760 dot Com. Love thanks so much for joining us here. 0:20:47.840 --> 0:20:49.840 We're Matt and I were just looking at the five 0:20:50.040 --> 0:20:53.480 year chart for your stock again. The symbol is PRTs 0:20:53.640 --> 0:20:56.199 Trades on NASDAK. It was kind of just, you know, 0:20:56.280 --> 0:20:58.680 almost a penny stock. Therefore, we're looking at the five 0:20:58.760 --> 0:21:01.800 year chart until you know kind of you know, kind 0:21:01.840 --> 0:21:04.920 of March of last year, and then it just exploded. 0:21:05.080 --> 0:21:07.440 Is this a pandemic play? Is that what your stock 0:21:07.480 --> 0:21:12.359 has become? Yeah, that's a common misconception. I think you know, 0:21:12.440 --> 0:21:16.600 the business wasn't really going anywhere for a long time. Um. 0:21:16.600 --> 0:21:20.240 You know, the company has been public since two thousand eight. Uh, 0:21:20.440 --> 0:21:23.960 didn't really grow for twelve years, and then an entirely 0:21:23.960 --> 0:21:26.920 new management team came in. UM I started in January 0:21:27.040 --> 0:21:31.000 of two thousand nineteen, and we executed a great turnaround 0:21:31.000 --> 0:21:35.400 plan focusing on solving a customer problem. And uh, last 0:21:35.480 --> 0:21:39.040 quarter alone, we grew nine For the full year, we 0:21:39.080 --> 0:21:43.440 grew fifty two fifty million, and so you know, we're 0:21:43.520 --> 0:21:45.880 we're executing really well. I'm really proud of the way 0:21:46.480 --> 0:21:49.560 the team is executing right now. And uh, wait, way 0:21:49.600 --> 0:21:52.640 beyond the pandemic now. But I mean, it can't be 0:21:52.880 --> 0:21:56.680 just a coincidence that your stock is trading for like 0:21:57.160 --> 0:22:00.160 two or three bucks for four years. I mean it's 0:22:00.200 --> 0:22:03.000