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Speaker 1: Global business news twenty four hours a day. If Bloomberg

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Speaker 1: dot Com, the radio plus mobile last and on your radio,

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: Futures this morning moving higher along with nine x scrude oil.

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Speaker 1: Let's go to the first Word breaking news desk for

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Speaker 1: today's morning call. Here's Bill Maloney. Good morning Bill, Good

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Speaker 1: morning Karen. Futures are maintaining their games since the last

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Speaker 1: time we spoke without Futures currently hired by seventy points,

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Speaker 1: SYSS gain eight and a half and as the futures

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Speaker 1: rise by twenty two the U S ten Uel at

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Speaker 1: one point eight seven per cent. Many europ markets are

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Speaker 1: also climbing, led by gains in Spain and Germany. On

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Speaker 1: the economic Frontay nine forty five market, U S Services,

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Speaker 1: p m I at ten o'clock, Bank of Canada rate

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Speaker 1: decision at ten thirty, Energy Inventories and FED speak at

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Speaker 1: nine o'clock eleven forty and two pm after the bellis night.

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Speaker 1: Computer Scientists to merge with its services unit of HP

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Speaker 1: Enterprize Computer Sciences is up twenty nine percent pre market.

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Speaker 1: Also last night, into It raised your jes EPs and

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Speaker 1: revenue views and Nimble Storage keeps your REVENUEE also topped

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Speaker 1: estimates regarding earnings. This morning, Tiffany cut europs forecast and

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Speaker 1: a deal News Buyers says it's confident it can meet

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Speaker 1: mont Santo's deal demands and other news. Ali Baba falls

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Speaker 1: two and a half percent pre market sec accounting inquiry

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Speaker 1: was disclosed yesterday. Finally, some of your Wall Street upgrades

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Speaker 1: and downgrades apply. Materials raised to buy over at City Group,

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Speaker 1: Computer Sciences and Western Digital raised over way to over

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Speaker 1: at Barkley's best Buy, cut to hold at deut your Bank,

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Speaker 1: mont Santa raised to buy a Jeffreys and Computer Sciences

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Speaker 1: cut to market reform over at Raymond. James live from

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Speaker 1: the first Break your News desk on Bill Maloney. Karen

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Speaker 1: thanks Bill to hear live breaking news over your Bloomberg

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Speaker 1: type squawk and go on your terminal. That's s Q

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Speaker 1: you a w k go, that's a Bloomberg business flash.

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Speaker 1: Tom and Mike, Karen thanks so much, greatly, appreciate that.

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Speaker 1: Good morning everyone. Bloomberg Surveillance brought you by Investco to

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Speaker 1: the a's headlines. Have you searching for more investment views?

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Speaker 1: Investco's experts can help find the latest thought leadership at

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Speaker 1: the Investco block. Visit investco dot com slash us to subscribe.

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Speaker 1: Investco dot com slash us to subscribe. All stocks are

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Speaker 1: the same, All bank stocks are the same over the

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Speaker 1: last ten years. Do you want to these are all

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Speaker 1: rounded numbers? Do you want to make a negative ten

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Speaker 1: percent per year over the last ten years in Bank

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Speaker 1: of America? Or do you want to make a positive

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Speaker 1: seven percent per year? And Wells Fargo now joining us

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Speaker 1: Michael may Mayo c s l A through Strill Davon,

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Speaker 1: Mike Great, great to speak to you. I'm as guilty, Mike,

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Speaker 1: of anyone in New York City. I'm not talking enough

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Speaker 1: about Fortress, Stump explained to Mere Mortals. Why is Wells

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Speaker 1: Fargo different from the other too big to fail banks? Well,

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Speaker 1: I'm fresh off a red eye well far Ago had

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Speaker 1: there once every two year Investor Day yesterday in San Francisco.

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Speaker 1: And I'll tell you Wellth Fargo. The depth of the

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Speaker 1: management is incredible. They've had a consistent strategy for the

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Speaker 1: last two decades. And over the last decade, Wells Fargo

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Speaker 1: has shown better revenues, better returns and better risk. And

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Speaker 1: now you let off contracting that to Bank America and Thomas.

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Speaker 1: You know, I went to the annual meeting for Bank

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Speaker 1: America just a few weeks ago, and I said to

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Speaker 1: the CEO, what are your financial targets? What time frame

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Speaker 1: do you have to your financial targets? And they would

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Speaker 1: not disclose those yesterday. In contrast, the strong outperforming bank

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Speaker 1: well Fargo gave a multitude of financial targets with frame

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Speaker 1: um and said they hold them solved, accountable, and they

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Speaker 1: achieved those goals. The key idea here, and folks, I

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Speaker 1: want to look forward. I don't. I don't want to

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Speaker 1: do a history lesson with Mike Mayo's too valuable. The

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Speaker 1: look forward is there's all these problems, all these distractions

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Speaker 1: in the clouds part and the sun shines down in

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Speaker 1: two thousand seventeen or eighteen, and these machines start returning

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Speaker 1: cash to shareholders. Is Wells Fargo Mike Mayo's single best buy.

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Speaker 1: Well you know, we look at short term, medium term,

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Speaker 1: and long term and long term, Wells Fargo is the

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Speaker 1: bank to own. You know, they just still miss Wells Fargo.

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Speaker 1: Why are they successful? Because they are independent thinkers? So

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Speaker 1: miss number one branches bank branches are dead. Well, guess what.

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Speaker 1: Wells Fargo made it very clear that's not the case.

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Speaker 1: Millennials use bank branches. Two out of three millennials used

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Speaker 1: bank branches still and they use them quite frequently. Miss

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Speaker 1: number two. Banks can't innovate. You know, financial technology is

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Speaker 1: going to eat thanks much wrong for the innovation Wells

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Speaker 1: Fargo showed yesterday was quite amazing. They'll be able to

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Speaker 1: tell who you are, Tom by not only your thumb

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Speaker 1: print and voice recognition, but also recognizing your eye will

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Speaker 1: be all authentication. It's really incredible. I had a preview

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Speaker 1: of that. And you stare into your your phone with

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Speaker 1: certain software, it recognizes who you are in less than

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Speaker 1: a minute and it never forgets who you are. Did

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Speaker 1: you have a drink? Did you have a drink in

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Speaker 1: your John Tucker and I want to know do they

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Speaker 1: have bowtie recognition software recognize your eyeball when you're hungover? McKey,

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Speaker 1: Michael McKee jump in here with the the I recognition

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Speaker 1: of Michael Mayo off the red Eye exactly. I thought

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Speaker 1: you touched on one of the key UH questions about

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Speaker 1: Wells Fargo very early on in the conversation here when

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Speaker 1: you mentioned risk. What is their attitude towards risk and

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Speaker 1: how does it differ from the other banks, because they

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Speaker 1: don't seem to take as much of as many risks

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Speaker 1: in trying to raise their earnings. And that's part of

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Speaker 1: Well Fargo's DNA. Everybody is to degree a risk manager.

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Speaker 1: They are independent thinkers. They don't follow the crowd. And

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Speaker 1: before the financial crisis they gave up, you know, a

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Speaker 1: lot of revenues when everybody was making their subprime loans.

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Speaker 1: They said, we're not going to do that. So they

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Speaker 1: truly do look longer term. Uh. And they're willing to

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Speaker 1: say no to deals and loans uh. And this is

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Speaker 1: just part of a culture. And you know, you can't

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Speaker 1: write a memo and tell another thank how to do this.

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Speaker 1: This is you know, many steps over a number of years.

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Speaker 1: What's uh, Are they going to be able to keep

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Speaker 1: it up um? Or does it even get better for

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Speaker 1: them under a new FED regime or are they going

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Speaker 1: to be forced at some point into a different business model.

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Speaker 1: There is zero chance in my mind that they're changing

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Speaker 1: their business model. In fact, if you look at the

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Speaker 1: annual report from two decades ago, from twenty years ago,

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Speaker 1: the strategy of Well Fargo today is very similar to

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Speaker 1: the strategy back then, the idea of going great customer

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Speaker 1: service cross Now, it's not all roses here for Wells Fargo.

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Speaker 1: There's additional regulatory burdens. Roll Fargo has five hundred billion

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Speaker 1: dollars of cash or near cash on its balance sheet.

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Speaker 1: That that's money that's not in loans. It's fine. What

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Speaker 1: are they gonna do with half a trillion dollars? I

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Speaker 1: want my fair share? Well, part of this is the

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Speaker 1: regulators regulars are saying we want you to be and

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Speaker 1: that drags down returns and they had guided Okaya home run.

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Speaker 1: Thank you so much for reporting to us and giving

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Speaker 1: your your perspective off the red eye from that important

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Speaker 1: annual meeting. Michael Mayo was c L s A. Michael

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Speaker 1: McKee and Tom Keane Bloomberg Surveillance coming up there, with

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