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Speaker 2: It's got an update here on what's happening down in Washington,
Speaker 2: DC with all these tariffs. Every single day there seems
Speaker 2: to be more and more news. Tyler Kendall joined us
Speaker 2: Bloomberg News reporter Tyler, what's the latest on the tariffs
Speaker 2: here where we heard some tough talk from mister Carney,
Speaker 2: the incoming Prime minister at Canada. What's the latest right.
Speaker 3: Well, we are expecting the next round of tariffs to
Speaker 3: go into effect this Wednesday. That's going to be on
Speaker 3: steel and aluminum tariffs at twenty five percent. We've been
Speaker 3: told not to expect any exemptions or carve outs at
Speaker 3: this moment, but of course, like many things, that remains
Speaker 3: to be seen and could be a moving target here
Speaker 3: at the White House, and I would just expect to
Speaker 3: hear this week rhetorics start to shift from senior administration officials.
Speaker 4: We've often talked about.
Speaker 3: Tariff's up to this point as being a way to
Speaker 3: advance President Trump's border policies. But now we're going to
Speaker 3: start to hear a lot more about these tariffs being
Speaker 3: about national security concerns. Recall, steel was a flashpoint on
Speaker 3: the twenty twenty four campaign trail with that proposed MEF
Speaker 3: on steel acquisition and where we heard national security come up. Notably,
Speaker 3: a Commerce Secretary, Howard Lutnick, over the weekend did say
Speaker 3: that Americans should start to prepare for foreign good prices
Speaker 3: to go up, although he contends that US good prices
Speaker 3: will ultimately go down over the long term, but that
Speaker 3: there might be that adjustment period as we've heard President
Speaker 3: Trump talk about. I just bring that up about the
Speaker 3: steel tariffs because we have to keep in mind that
Speaker 3: includes those downstream items and economists say that could hit
Speaker 3: consumers the most.
Speaker 5: Tyler Trump said of the U with economy faces a
Speaker 5: period of transition, how much pain are they willing to take?
Speaker 3: Right Well, the threshold for pain appears to be a
Speaker 3: little bit higher than most people believe. But the rhetoric
Speaker 3: right now of the White House is that there needs
Speaker 3: to be this short term adjustment period in order to
Speaker 3: have this longer term growth. And President Trump actually gave
Speaker 3: us a little bit of insight into his thinking during
Speaker 3: that interview that aired over the weekend, actually comparing the
Speaker 3: US to China, saying, in his words that China thinks
Speaker 3: in a one hundred year perspective, whereas the US likes
Speaker 3: to think in quarters. He then used that as a
Speaker 3: way to segue into doubling down on the claim that
Speaker 3: he says he is not watching the stock market, though
Speaker 3: he did noted that he has his eye towards interest rates.
Speaker 3: But it really does track with what we've been hearing
Speaker 3: from White House officials, which is that they are trying
Speaker 3: to have everybody look at the broader macroeconomic picture when
Speaker 3: concerns come up about inflation, or the labor market and
Speaker 3: workforce cuts, or even consumer sentiment. And I actually caught
Speaker 3: up with any C Director Kevin Hassett here on the
Speaker 3: White House North Lawn earlier this morning, and he told
Speaker 3: me that there's really not much they can do until
Speaker 3: the full Trump Agenda is implemented, which really means that
Speaker 3: they are banking on some things that haven't yet quite
Speaker 3: gone into effects, such as a terrorists as a revenue raiser,
Speaker 3: which goes hand in hand with importantly here President Trump's
Speaker 3: tax cut agenda, which Isabelle, we know is not going
Speaker 3: to necessarily be an easy task for this Congress.
Speaker 2: And Tyler, I guess the initial discussion surrounding these tariffs
Speaker 2: from President Trump's administration, where they were really not so
Speaker 2: much a trade war issue but a war against drugs
Speaker 2: and immigration. Is that still the argument that the administration
Speaker 2: is making.
Speaker 3: Well when it comes to those tariffs against Mexico and
Speaker 3: Canada that currently have this USMCA as well as auto
Speaker 3: exemption on them, This administration even over the weekend, said
Speaker 3: that any amount of fentanyl combing over the border is
Speaker 3: too much, and it doesn't really seem like they're moving
Speaker 3: off of that. We're going to them move into this
Speaker 3: national security argument with the steel and aluminum tariffs this week,
Speaker 3: but then we are really pushing ahead to that April
Speaker 3: second date that the administration keeps pushing us towards when
Speaker 3: it comes to the reciprocal tariff plans. We did learn
Speaker 3: that after President Trump had threatened reciprocal tariffs against Canadian
Speaker 3: lumber and dairy, for example, that that likely will not
Speaker 3: take effect until April second, even though he had threatened
Speaker 3: that those could have come sooner. So we're really going
Speaker 3: to start to see this argument of reciprocity as we
Speaker 3: start to expect some more leaders to come here over
Speaker 3: the next couple of weeks, as we beat the drum
Speaker 3: up to that April second date.
Speaker 5: How aligned is President Trump? And Secretary's caught Best that
Speaker 5: we have Trump saying that this is a transition period,
Speaker 5: and we have Best and saying this is a detox period.
Speaker 4: Right.
Speaker 3: Well, they're really trying to put forward this picture that
Speaker 3: the government does need to reduce government spending and that
Speaker 3: does go along with this tax cut agenda. We're going
Speaker 3: to need spending cuts in order to offset the tax cuts,
Speaker 3: and that's something that this Congress in particular is going
Speaker 3: to have to grapple with. Republicans in the House are
Speaker 3: really divided among this issue, particularly when it does come
Speaker 3: to government spending cuts and concerns about what it could
Speaker 3: mean for social programs such as medicaid. That is going
Speaker 3: to be a very complicated factor here as they try
Speaker 3: to get that over the finish line. And we got
Speaker 3: one indication this weekend that they are expecting this to
Speaker 3: be a month's long fight. The House Republicans introducing a
Speaker 3: stopgap measured keep the government funded until September thirtieth, with
Speaker 3: President Trump posting on truth Social that he had asked
Speaker 3: for that date in order to give enough time for
Speaker 3: Republicans to work out the rest of his agenda items.
Speaker 2: All right, Tyler, thank you so much for joining us.
Speaker 2: Really appreciate it. Tyler at Kendall. She's a reporter for
Speaker 2: Bloomberg News down to Washington, DC.
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Speaker 2: So I've got a lot of volatility as the name
Speaker 2: of the game here in marketplaces, and we know that
Speaker 2: markets do not like volatility, so you see that in
Speaker 2: the price action here. Let's see what the.
Speaker 6: Pros are doing here.
Speaker 2: Tim o'bona, what's chief investment strategist at Innovator Capital Management.
Speaker 2: He's somewhere out there in Chicago, one of my favorite towns. Absolutely, Hey, Tim,
Speaker 2: talk to us about these markets here. You talk to
Speaker 2: your clients. How do you is it handholding? Is it
Speaker 2: what are the conversations these days.
Speaker 7: Oh, Paul, there's a lot of jitters out there, and
Speaker 7: every conversation that we are having right now all comes
Speaker 7: back to the question of what's going to be the
Speaker 7: net impact of all these different policies from the Trump administration.
Speaker 7: And you know, right now, I think there's this mindset
Speaker 7: shift that you know, everybody was really excited about the
Speaker 7: pro business policies of the Trump administration. Now I think
Speaker 7: it's becoming pretty clear that Trump realizes he needs to
Speaker 7: slow this economy down if he wants to get interest
Speaker 7: rates and inflation under control. And there's really two ways
Speaker 7: that he's going to be able to do that. One
Speaker 7: is pulling back in government spending and I think you're
Speaker 7: seeing that through through DOGE. And then also with the tariffs,
Speaker 7: and the tariffs we view that as really a tax
Speaker 7: on the consumer that is going to put additional pressure
Speaker 7: on consumers that are already under stress. And I think
Speaker 7: what he's going for here is long you know, long
Speaker 7: term gain with the fact that we know there's going
Speaker 7: to be continued short term pain, and he's okay with that.
Speaker 7: You know, you're not going to get the approval of
Speaker 7: the everyday American if the stock markets going up. You know,
Speaker 7: he counted that the first time constantly, that's not the case.
Speaker 1: This time.
Speaker 7: He's not talking about it at all. And I think
Speaker 7: it really comes back to that realization that if we
Speaker 7: are going to get interest rates down, if we are
Speaker 7: going to get inflation under control, there has to be
Speaker 7: some pain that comes along with that. And I think
Speaker 7: that's what you're seeing right now.
Speaker 5: And note you mentioned that the majority of investors were
Speaker 5: not taking Trump seriously when it comes to tariffs, So
Speaker 5: now it seems like he is serious and the velocity
Speaker 5: of the shift from excitement to fear has been swift.
Speaker 5: How are you trading this market? Where do you hedge?
Speaker 7: Well, you know, really in the bulk of what we
Speaker 7: do is risk management, you know, at all times. And
Speaker 7: if you look at the flows that we've seen here
Speaker 7: recently in the ETF market, we've seen a tremendous amount
Speaker 7: of inflows here to the tune of about a billion
Speaker 7: dollars over the last week and a half into buffered
Speaker 7: ETF strategies. And really what these do is they give
Speaker 7: you a known level of downside protection on an index
Speaker 7: like the S and P five hundred ETF or the
Speaker 7: Nasdaq with known upside exposure. And I think right now,
Speaker 7: we look at all the uncertainty that is out there,
Speaker 7: you know the fact that you know, on the flip
Speaker 7: of a switch, Trump could come out there pull back
Speaker 7: tariffs and this market could rip higher, or you could
Speaker 7: continue to see this tit for tat. There's so much uncertainty.
Speaker 7: And really, what these strategies do and why I think
Speaker 7: so many investors are gravitating towards these, is that they
Speaker 7: do help remove a lot of that uncertainty. They keep
Speaker 7: you invested, which is incredibly important, especially right now, but
Speaker 7: they also are going to help you really hedge out
Speaker 7: and mute a lot of this volatility that we're seeing,
Speaker 7: you know, coming from the Trump administration.
Speaker 2: Talk to us about the fixed income market.
Speaker 6: Here.
Speaker 2: We've got big moves today here in the in the
Speaker 2: bond market, treasuries of ten your ersury up twenty basis points,
Speaker 2: kicking the yield down the like four point two two percent. Here,
Speaker 2: where's opportunity if anywhere in the fixed income market.
Speaker 7: Well, Paul, I think we're starting to get a little
Speaker 7: more more bullish here, and this has been an area
Speaker 7: we've been very bearish on for the last couple of years,
Speaker 7: you know, simply for the fact that you know, most
Speaker 7: advisors that we're working with are using these as a
Speaker 7: risk management tool, right, and we continue to see BONN
Speaker 7: yields in equity prices moving in the same direction that
Speaker 7: you don't have that diversification that most advisors are going for.
Speaker 7: With that, I think with some of the changes that
Speaker 7: we've seen here recently, they're starting to become more opportunities.
Speaker 7: You know, if you look at BONN yelds and inflation
Speaker 7: really over the last several years, they followed this this
Speaker 7: government deficit as a percentage of GDP almost in lockstep
Speaker 7: with one another. So as we see more and more
Speaker 7: you know, hopefully more success from from the Department of
Speaker 7: Government efficiency from the Trump administration being able to pull
Speaker 7: back that spending, I think that gives us more hope
Speaker 7: that we can see, uh, you know, interest rates start
Speaker 7: to work, or that inverse correlation start to work a
Speaker 7: little bit better, that interest rates can come down. Uh
Speaker 7: and again a slowing economy too, that that should help
Speaker 7: us out on the longer end of the yield curve.
Speaker 7: So I still do think it's it's a risk with
Speaker 7: the environment that we're in right now with core inflation
Speaker 7: still elevated, but I think for the first time in
Speaker 7: a couple of years, we're starting to see signs, you know,
Speaker 7: that the long to intermediate duration bond trade could be
Speaker 7: showing some signs of life here.
Speaker 5: When it comes to inflation, we have Mohammed El Ariyan
Speaker 5: and an opinion piece today saying that the FEDS insistence
Speaker 5: and keeping inflation to two percent maybe limiting its flexibility.
Speaker 5: Where do you stand on that on your inflation views.
Speaker 7: Well, I don't think the Fed is going to move
Speaker 7: on it, so I think it's a fun thing to debate.
Speaker 7: I don't necessarily know if it helps investors in the
Speaker 7: short term. And look, you look back in the history
Speaker 7: of the US any time that we have seen core
Speaker 7: inflation starting off north of five percent or above, never
Speaker 7: before have we had a situation where we've gotten back
Speaker 7: down to two percent without a recessionary hit to the
Speaker 7: labor market coming. And you know what we've heard for
Speaker 7: the last several years, even from a lot of our
Speaker 7: you know, advisor clients, is that this time is different.
Speaker 7: And look, I hope it is. I hope this time
Speaker 7: is different where we can get back down to that
Speaker 7: two percent target without a huge hit to the labor
Speaker 7: market taking place. But we don't want to just go
Speaker 7: out there and position our portfolios like that's going to
Speaker 7: be the case, because it would, in fact be a
Speaker 7: unicorn event. And I think, you know, a lot of
Speaker 7: the you know, this comes back down to how strong
Speaker 7: the labor market has been over the last couple of years.
Speaker 7: Wage growth still running north of you know, well north
Speaker 7: of four percent. That's not conducive with a two percent
Speaker 7: inflation target at all. And you know, I think what
Speaker 7: gives me a little bit of hope that we are
Speaker 7: going to get back down there, you know, within the
Speaker 7: next year or so now is if you look at
Speaker 7: all the layoffs that are taking place within the government
Speaker 7: over the last couple of years, you've had about a
Speaker 7: quarter of all new jobs that have been created by
Speaker 7: the government. We're starting to pull that back. You're starting
Speaker 7: to see you know, a lot of those layoffs, which
Speaker 7: I've seen recent estimates in the three hunds to five
Speaker 7: hundred thousand range, those are going to be jobs that
Speaker 7: are going to be replaced in the private sectors. So
Speaker 7: there's going to be a lot more supply coming to market,
Speaker 7: which I'm hopeful that that will really soften things up
Speaker 7: to where we need to be.
Speaker 2: Tim, thank you so much for joining us. Timber Bouden,
Speaker 2: what's chief investment strategies from Innovator Capital Management.
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Speaker 2: We talk every week to our good friends at Bloomberg
Speaker 2: New Energy Finance b n EF. Now we've got to
Speaker 2: talk about tariffs and what that means for green sectors
Speaker 2: from energy to biofuels. Today we do that with Antoine
Speaker 2: Wagner Jones, head of Trade and Supply Chains for bn Yeah, Antoine,
Speaker 2: thanks for being in our studio here. Tariffs cannot be
Speaker 2: good for the evolution into green energy. How do you
Speaker 2: guys think about the wrists that are being introduced into.
Speaker 8: That, Yeah, there's at a time where everything is whipsawing
Speaker 8: and we're seeing a lot of differences in terms of
Speaker 8: policy approaches. What's really interesting is to see areas of continuity.
Speaker 8: Trump is very much on board with manufacturing in the US.
Speaker 8: That was something that was very much a part of
Speaker 8: the Biden administration. The way in which that's happening is
Speaker 8: very different, however, as central planks of Biden's approach was
Speaker 8: to be Okay, we're going to onshore semiconductors, We're going
Speaker 8: to onshore clean energy manufacturing. And what we've seen now
Speaker 8: is attack on the Inflation Reduction Act rhetorically and a
Speaker 8: version that's starting to build on the Chips Act. These
Speaker 8: big sources of finance for a lot of these projects
Speaker 8: that are happening in the US at a time when
Speaker 8: tariffs are starting to be stepped up as a respon
Speaker 8: once and this is building on a lot of tariffs
Speaker 8: that we saw on the Biden administration front. That has
Speaker 8: to be twinned with support for some of these different sectors.
Speaker 8: When that's being pulled out, then it starts to become
Speaker 8: very uncertain, and when you're seeing the levels of volatility
Speaker 8: around tariff's being announced, being pulled back, being re announced
Speaker 8: when things are really unclear in terms of what's going
Speaker 8: to happen. That's not great for businesses that need to
Speaker 8: make decisions on investment that has quite a long payback period.
Speaker 8: And we're not quite seeing the upsurge in manufacturing investment
Speaker 8: that we're expecting to see over the first few months
Speaker 8: as a result. So it's an interesting time. There's a
Speaker 8: lot in flux. It's bad news for leek green energy,
Speaker 8: as you can expect, but it's also not necessarily great
Speaker 8: news for some of the objectives that are a central
Speaker 8: part of Trump's agenda, whether that's building out data centers.
Speaker 8: You need a lot of grid equipment, a lot of
Speaker 8: that comes from Mexico that suddenly becomes a lot more
Speaker 8: expensive if you need all the transformers that you need,
Speaker 8: and the examples along that line of thinking just on
Speaker 8: ever ending. So it's a lot of uncertainty and not
Speaker 8: a great outlook when it comes to to you know,
Speaker 8: this idea that tariff's equals manufacturing, but actually the path
Speaker 8: to getting there is a lot more is a lot
Speaker 8: more fraught than I think is appreciated.
Speaker 5: I was just going to ask what we see a
Speaker 5: shift into em Are they starting to ramp up imports
Speaker 5: of clean tech products? I mean maybe they could stand
Speaker 5: to benefit.
Speaker 8: Yeah, it's we generally speaking, yes, we could start to
Speaker 8: see arise from that perspective. But again, I think a
Speaker 8: lot of the constraining factors they're on grid investment rather
Speaker 8: than the cost of clean energy, and that's where we're
Speaker 8: starting to see some real pain points when already there's
Speaker 8: some big shortages of large power transformers, for example, and
Speaker 8: that's something that is repeatedly a huge concern and something
Speaker 8: that has made materially more difficult to integrate that sort
Speaker 8: of clean energy if you're making building out the grid
Speaker 8: a lot harder. So there's a lot of recurring themes
Speaker 8: that keep popping.
Speaker 6: Up, and that's one of them.
Speaker 2: How about near shoring. We thought about North America as
Speaker 2: near shoring Canada and Mexico, but that may not be
Speaker 2: enough because now we're talking putting tariffs on those folks
Speaker 2: as well. So it sounds like if you want to
Speaker 2: manufacture anything, it's going to be almost entirely United States based.
Speaker 8: And that's what's fascinating. So over the last few years,
Speaker 8: we've seen all these different buzzwords on shoring, reshoring, near shuring,
Speaker 8: near shuring. This idea which was promoted by the Biden
Speaker 8: administration that will have certain incentives for manufacturing, will extend
Speaker 8: those incentives for manufacturing parts of evs, for example, to
Speaker 8: our North American neighbors in Canada and Mexico. Now, when
Speaker 8: you're starting to impose tariffs on those same neighbors, then
Speaker 8: you're flying in the face of that trend, and it
Speaker 8: really seems like that sort of dead in the water.
Speaker 8: I don't think we're going to see the death of
Speaker 8: integrated value chains for the automotive sector over the next
Speaker 8: few weeks. That's going to remain in North America, across
Speaker 8: North America because of the inertia in the system, the
Speaker 8: efforts that are being made by lots of these the
Speaker 8: big three automakers for example. But at the same time,
Speaker 8: I don't think we're going to see the step up
Speaker 8: in investment in Mexican manufacturing that was due to surf
Speaker 8: the US market through this trend of nailshuring, which now
Speaker 8: I really don't see as a poltical priority.
Speaker 2: All interesting, All right, and Swan, thank you so much
Speaker 2: for joining US. Antoine Vagno Jones, head of Trade and
Speaker 2: Supply Chains for BNF. Joining us here on our Bloomberg
Speaker 2: Interactive Brokers Studio.
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on Applecarclay and Android Auto
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Speaker 2: Earlier today, Joe Dominguez see You, of Constellation Energy, spoke
Speaker 2: with Bloomberg Intelligence co host Alex Steele about the impact
Speaker 2: of tariffs on energy investments at Sarah Week in Houston.
Speaker 2: Joe was first asked about the recession. It's slowing growth,
Speaker 2: and he was asked if he's noticing any of that
Speaker 2: at Constellations take a listen.
Speaker 9: We don't see an end in sight right now. We're
Speaker 9: starting to see it get rational, and by that I
Speaker 9: mean we're not seeing the same request for data centers
Speaker 9: popping up in five or six utilities. So I think
Speaker 9: the hyperscalers are beginning to figure out where they want
Speaker 9: to go. And it's not the frenzy of activity, but
Speaker 9: in terms of the deal pace, it continues the same
Speaker 9: way we saw it last year.
Speaker 10: And how are the deals like, how is it to
Speaker 10: get them done?
Speaker 4: Is it hard? Is it coming up with a structure
Speaker 4: the money? Like? What is it?
Speaker 9: It's not hard, but they're complicated because they're multi billion
Speaker 9: dollar deals, right, So we're talking about twenty year deals
Speaker 9: for power that sometimes could cost five or ten billion dollars.
Speaker 6: So, like any commercial deal of that scale, it's.
Speaker 9: Going to take a long time to negotiate, and each
Speaker 9: time you need to do that with a new party,
Speaker 9: you have to go through all the terms and conditions again.
Speaker 9: But I think we're going to get some some deals
Speaker 9: done this year.
Speaker 10: Can you give me some hints, like in maybe areas,
Speaker 10: what kind of deals, like what kind of power?
Speaker 9: Well, I think nuclear continues to be very attractive for
Speaker 9: the hyper scalers because it operates twenty four to seven,
Speaker 9: it's cleaned, so it meets their environmental goals, and it
Speaker 9: matches up really well from a reliability standpoint.
Speaker 4: So let's go Tom money then for a second.
Speaker 10: So coming up with the deals is very interesting, particularly
Speaker 10: the one you do with Microsoft to restart three Mile Island.
Speaker 4: Are your costs going up right now?
Speaker 6: A little bit?
Speaker 9: But it's really labor inflation that we mostly see. Now,
Speaker 9: Remember we have existing nuclear plants that are already built.
Speaker 9: So a lot of the costs of the raw materials
Speaker 9: that you're seeing, you know, potentially impacted by tariffs in
Speaker 9: the long run, but in escalation through inflation. We're not
Speaker 9: seeing much of that tiny bid on uranium pricing.
Speaker 6: But most of what we're seeing is labor contracting.
Speaker 10: So are you planning for a tariff increase that we
Speaker 10: should be seeing on stealing aluminum on Wednesday?
Speaker 4: Right? You would have no one that would have limited impact.
Speaker 6: How do you see that pretty limited impact on us?
Speaker 9: It would impact replacement parts and that sort of thing,
Speaker 9: but it's going to be a deminimous impact on our budget.
Speaker 10: And if you wind up seeing an increase in labor,
Speaker 10: how does that change in your contracts? Like you already
Speaker 10: said it, you have to go back to them and say, hey, listen,
Speaker 10: we got to renegotiate my costs are going on.
Speaker 9: No, there's no reopeners up or down for those sorts
Speaker 9: of inflation.
Speaker 4: So you're really taking on that risk.
Speaker 9: Sure, yeah, yeah, and we're taking it on for over
Speaker 9: twenty year period. And that's the importance of being able
Speaker 9: to do this with nuclear Right, we know exactly what
Speaker 9: our cost structure is going to be within a range
Speaker 9: for ten and twenty years.
Speaker 6: Harder to do with our.
Speaker 9: Natural gas assets, where we don't know what the price
Speaker 9: of natural gas is going to be ten years out,
Speaker 9: or whether we're going to have a carbon tax, or
Speaker 9: what the changes in environmental regulations are.
Speaker 6: Going to be.
Speaker 4: So how do you manage that risk?
Speaker 9: Well, I think what's really difficult to do that in
Speaker 9: the case of natural gas. I think they're what you're
Speaker 9: doing is something that looks more like an index product
Speaker 9: that is indexed to either inflation or natural gas prices.
Speaker 10: When you talk about the different parts of your business,
Speaker 10: how much of the capex that you're spending is going
Speaker 10: to new stuff, beefing up old stuff, or just replacing
Speaker 10: and making sure everything stays on track.
Speaker 9: Yeah, So for us ALEX we face a critical decision
Speaker 9: as to whether to relicnse the nuclear plants for another
Speaker 9: twenty years, and we're facing that across the fleet.
Speaker 6: So when you say.
Speaker 9: New, if we don't do this, it's going to be retired,
Speaker 9: very much like Three Mile Island was retired. So the
Speaker 9: distinction between keeping existing open and something that's truly new
Speaker 9: is immaterial.
Speaker 6: Right If it's gone. It's gone. It's the same as
Speaker 6: if it were never built.
Speaker 9: So we are investing all of our monies to secure
Speaker 9: that fleet for the future, and we're also doing uprights
Speaker 9: and restarts and other things like that. In terms of
Speaker 9: a percentage to your question, I would say ninety percent
Speaker 9: of our spend is in the existing assets and getting
Speaker 9: them ready to run for decades to come.
Speaker 10: So when we talk about power demand booming and increasing
Speaker 10: by multiple digits, right, I mean ten percent would be huge.
Speaker 10: How do you play that it's not new, is it
Speaker 10: just expanding?
Speaker 6: Well, it is expanding.
Speaker 9: A lot of our clients are interesting interested in operating
Speaker 9: that's increasing the output of existing nuclear plants, and we're
Speaker 9: doing that in a number of different regions. Obviously, the
Speaker 9: restart is more limited. You had one plant there that
Speaker 9: you could turn on, and I think there might be
Speaker 9: another in the nation. And then the rest of that
Speaker 9: is going to be probably spent on renewables, storage and
Speaker 9: natural gas for the time being, and then the fullness
Speaker 9: of time new nuclear m and a for that.
Speaker 10: I know you just bought Calpine, so that really beefs
Speaker 10: up your natural gas. Nuclear is now fifty percent of
Speaker 10: your portfolio. Versus A seventy. That was a big shift.
Speaker 10: What else is in your pipeline for.
Speaker 6: That, Well, we've got a lot on our plate.
Speaker 9: We've got a lot of food d Yeah, and so
Speaker 9: this year we're going to spend making sure that we're
Speaker 9: ready to integrate Calpine.
Speaker 6: And prepared for regulatory approvals at the back end of
Speaker 6: the year.
Speaker 9: But as you said, it's a big deal, and I
Speaker 9: think what we've indicated as a company is M and
Speaker 9: A is a big part of our strategy.
Speaker 10: Yes, M and A in beefing up nuclear, natural gas,
Speaker 10: or you want to diversal all of the.
Speaker 6: Above, all of the above.
Speaker 9: I think storage is going to increasingly be a part
Speaker 9: of the story, so we'll look at those opportunities as well.
Speaker 10: Everyone now wants to get into power. It is the
Speaker 10: coolest thing right now in the market. Whether you're looking
Speaker 10: integrated utilities, regulated utilities, even energy companies, are you seeing
Speaker 10: more competition.
Speaker 9: I think what people are trying to figure out is
Speaker 9: whether they too can secure longer term contracts. I don't
Speaker 9: see people building spec power plants hoping, you know, the
Speaker 9: demand will come. So I think there's going to be
Speaker 9: a lot of interest there. But it's largely going to
Speaker 9: be fossil. It'll continue to be renewables, but it always
Speaker 9: has been renewables, and then we'll see whether they could
Speaker 9: get deals done.
Speaker 7: All right.
Speaker 2: That was Alex Steel. Bloomberg is Alex Steel speaking with
Speaker 2: Joe Dominga SI Constellation Energy down there in Houston at
Speaker 2: the Sarah week At conference, talking about the energy bis,
Speaker 2: particularly on the nuclear energy side, where Constellation has a
Speaker 2: big plate.
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