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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple car Playing and broyd Otto with the

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Speaker 1: Bloomberg Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: All right, let's get back to McDonald's. Michael Halen is

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Speaker 2: Bloomberg Intelligence senior restaurant and food service analyst and joining

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Speaker 2: us on McDonald's earning sate.

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Speaker 3: Michael, what was your bigger takeaway here?

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Speaker 4: Yeah, I guess you know, the biggest takeaway is that

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Speaker 4: they still have work to do. You know, the stocks

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Speaker 4: performed pretty well here. I guess results weren't as bad

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Speaker 4: as expected. You know, July data that we've seen is

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Speaker 4: pretty bad, so the fact that they're still negative isn't

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Speaker 4: really surprising.

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Speaker 5: But they definitely still have work to do.

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Speaker 4: The five dollars meal deal seems to be bringing in

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Speaker 4: some traffic. They're hopeful that, you know, the sales will follow,

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Speaker 4: but it hasn't happened yet, you know, and they talked

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Speaker 4: about the US really needing a revamp of its one

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Speaker 4: two three dollar value meal. But we see this stock

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Speaker 4: doing well, and it's for a good reason. This company

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Speaker 4: has scale that nobody else does. They can offer price

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Speaker 4: points that nobody else can. You know, they have a

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Speaker 4: ton of marketing might So for those reasons in this

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Speaker 4: really competitive market where where chains are fighting hard to

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Speaker 4: track low income consumers, you know, McDonald's definitely has the tools.

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Speaker 5: For me.

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Speaker 6: The McDonald's experience was always an airport experience because I

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Speaker 6: always say I could justified for say, hey, I'm rushed

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Speaker 6: for time to gonna make my flake hits something quick.

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Speaker 6: But now all the new airports and like the renovated

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Speaker 6: Newark Airport, there's no fast food in those things anymore

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Speaker 6: that you have to sit down and order and do

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Speaker 6: all that kind of stuff.

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Speaker 7: So that's why that's interesting.

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Speaker 3: Isn't there fast food? But you it's like nice stuff

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Speaker 3: like wraps.

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Speaker 6: Well you get that stuff to go, But I mean

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Speaker 6: you could always get like some fast food, serious fast food.

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Speaker 8: All right.

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Speaker 7: So, Mike, so what's the story for McDonald's here.

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Speaker 6: Do they open stores, do they rationalize their footprint, what's

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Speaker 6: kind of the strategy there in terms of managing their

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Speaker 6: footprint these days?

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Speaker 4: Yeah, well they're there and they're investedtily late last year

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Speaker 4: they pushed for more aggressive store openings, right, and so

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Speaker 4: that's going to continue to be the focus. They're they're

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Speaker 4: gonna push hard to grow internationally. China obviously is a

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Speaker 4: big point of focus for them. But yeah, it's gonna

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Speaker 4: be it's going to be to open stores. But in

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Speaker 4: order to motivate their franchisees to open stores, they're going

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Speaker 4: to have to, you know, have a strong marketing program

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Speaker 4: that's going to pull people into the into the restaurants,

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Speaker 4: the existing restaurants, grow same store sales, improve profitability, and

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Speaker 4: make it just a more attractive proposition for their international

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Speaker 4: and US franchisees to open new stores.

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Speaker 2: Didn't They unveil like a five dollars meal thingy, But

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Speaker 2: that was at the end of the quarter, right, so

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Speaker 2: we don't really know the full impact of that for McDonald's.

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Speaker 4: Yes, yes, so on on on the call, management said

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Speaker 4: that it it's driving traffic but not price, but not

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Speaker 4: sales yet. So it seems like there's some trade down

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Speaker 4: from current customers saying, you know, well five dollars, I

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Speaker 4: get a lot of food for that five dollars, So

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Speaker 4: maybe instead of getting a big mcnial, I'll get this

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Speaker 4: five dollars meal deal, but so it hasn't really impacted

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Speaker 4: results yet, but they said that, you know, historically traffic

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Speaker 4: comes before the sales boost, and so they seem positive

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Speaker 4: on it in this near term. You know, they said

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Speaker 4: ninety three percent of franchisees in the US have agreed

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Speaker 4: to extend this offer deeper into the summer.

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Speaker 5: So they seem positive on it. But it's their real

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Speaker 5: focus is going to have to be on the one

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Speaker 5: two three dollars value menu.

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Speaker 4: That menu isn't resonating with customers, right, and it seems

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Speaker 4: like a full revamp is in the cards. You know,

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Speaker 4: they've they've been They've received a lot of shade on

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Speaker 4: social media that you can't find anything on that menu

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Speaker 4: for a buck, right, and so some reengineering is going

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Speaker 4: to be necessary necessary here in the United States.

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Speaker 7: All right, dumb question of the day comes from me.

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Speaker 6: Never at McDonald's, Burger King, even Starbucks the drive through

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Speaker 6: line or they're like twenty cars deep. I walk inside,

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Speaker 6: I walk right up to the counter and boom, I'm served.

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Speaker 6: What is it about Americans that they into this drive

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Speaker 6: through thing? And if I'm a McDonald's, isn't that a

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Speaker 6: source of opportunity for me to figure out how to

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Speaker 6: get them through faster.

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Speaker 4: Yeah, well, I guess we're lazy, that's the problem, right,

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Speaker 4: But uh no, to your point, you know, a big percentage.

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Speaker 4: You know, historically that the counter was like say fifteen

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Speaker 4: percent of a drive through restaurant sales, and historically that's

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Speaker 4: really just been used when the drive through line is

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Speaker 4: too long and people say, you know, I don't want

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Speaker 4: to wait that long. I'm gonna I'm gonna, I'm gonna

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Speaker 4: go inside and pick up my stuff. So there is

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Speaker 4: an opportunity, there's and it's a it's a point of

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Speaker 4: focus for all of the quick service restaurants we cover.

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Speaker 4: Everybody is constantly trying to improve their throughput, you know,

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Speaker 4: decrease the time waiting in line because they know, if

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Speaker 4: there's you know, at a certain number of cars for McDonald's,

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Speaker 4: historically it's been you know, say five or six cars

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Speaker 4: in the drive through, people will draw either you know,

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Speaker 4: drive past the restaurant or maybe they'll say, you know what,

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Speaker 4: I'll park and come in. But uh that's that's potentially

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Speaker 4: business loss, right, So you know, improving throughput at the

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Speaker 4: drive through, in at the counter is constantly a point.

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Speaker 2: I mean in theory, right, you get like an I

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Speaker 2: thing to do the drive through, right, but that has

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Speaker 2: been really tough to manage right now, right, it's not

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Speaker 2: really the best.

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Speaker 4: It's not working. I mean, people have they're having a

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Speaker 4: lot of trouble with with accents not only from you know,

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Speaker 4: international customers, but also dialects across the United States, so

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Speaker 4: voice ordering and a lot of these AI initiatives. You know,

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Speaker 4: there's a lot of potential with them, but they haven't

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Speaker 4: been able to really pay dividends just yet.

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Speaker 6: All right, So what is the investment call here, Mike

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Speaker 6: for some of these you know, fast service, McDonald's, Burger King,

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Speaker 6: what's the investment call here for these names?

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Speaker 4: Well, they're looking at you know, it's interesting because the

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Speaker 4: year over your comparisons, base effects get easier into the

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Speaker 4: second half, but the consumer's weakening, right and so you know,

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Speaker 4: McDonald said they expect you know, more consumer weakness over

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Speaker 4: the next few quarters, right, And so there's definitely concern

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Speaker 4: about about restaurants spending here in the second half. You know,

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Speaker 4: I think I mentioned it at the top. McDonald's is

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Speaker 4: well positioned though in uh in you know periods of distress.

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Speaker 4: You know, during the Great Recession, they outperform by offering

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Speaker 4: value that competitors couldn't match, right, And so it's a

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Speaker 4: very tough environment. But we think McDonald's is positioned pretty

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Speaker 4: well for such a tough environment.

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Speaker 2: In the value war where everyone's chasing a smaller part

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Speaker 2: of everyone's wallet. How do these guys remain profitable? I'm

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Speaker 2: not just saying McDonald's, but like all its competitors too,

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Speaker 2: Like it's sort of a race to the bottom to

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Speaker 2: some perspective, how does that play out?

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Speaker 5: It's not just a race to the bottom.

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Speaker 4: So so in terms of the low and they're trying

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Speaker 4: hard to keep that low income consumer business, and there's

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Speaker 4: no doubt that that's a big focus right now, but

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Speaker 4: they're also bringing in you know, middle income and higher

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Speaker 4: income consumers into the fold. Right, so you also get

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Speaker 4: this traded down effect where you know, yeah, sure, low

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Speaker 4: income consumers are trading down into grocery store. But McDonald's

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Speaker 4: and some of their competitors, Jack in the Box being one,

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Speaker 4: you know, Chipotle, have been able to attract these higher

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Speaker 4: income consumers that actually come in and buy premium items

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Speaker 4: and spend more when they come the problem is they're

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Speaker 4: just a much lower percentage of the overall traffic. But

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Speaker 4: that's been that's what we've seen over the last year

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Speaker 4: and a half or so. It's chains that have been

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Speaker 4: able to attract these higher income consumers are definitely outperforming.

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Speaker 6: So we're in your overall space there, MIC on the

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Speaker 6: restaurant side, is the best place to be these days?

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Speaker 4: Uh, you know it's it's it's companies that provide a

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Speaker 4: lot of value and a and a very good price point, right,

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Speaker 4: And so you know, like like most earning seasons and industries,

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Speaker 4: you know, a lot of the top performers end up

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Speaker 4: reporting earnings first.

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Speaker 5: And we've seen that Chipotle, UH.

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Speaker 4: And Texas Roadhouse or two, they outperform everybody on seamsore

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Speaker 4: sales over the last five years and it's not even

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Speaker 4: there's not even a close second. And a big reason

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Speaker 4: why they've outperformed so by so much is that customers

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Speaker 4: see a lot of value on that plate for the

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Speaker 4: price that they pay, right, and they're and they're provided

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Speaker 4: a pretty good customer experience, and that's what's bringing people

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Speaker 4: in the door. If you're providing very strong everyday value

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Speaker 4: and and a good in restaurant experience. You know, clean restaurants,

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Speaker 4: good service, whatever that you know and everything that that entails.

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Speaker 5: Then you're winning.

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Speaker 6: Got it eat civil business, but a tough business, that's

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Speaker 6: for sure. Michael Halen, Seniors, running food service analysts for

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Speaker 6: Bloomberg Intelligence. Bring us up to date on You're good

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Speaker 6: friends at McDonald's.

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Speaker 5: Here.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple car Playing and

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Speaker 1: broud Otto with the Bloomberg Business app. Listen on demand

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Speaker 1: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 7: Busy week here.

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Speaker 6: Economic data of plenting including the FED on Wednesday. Lots

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Speaker 6: of earnings, particularly for some of the big tech names

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Speaker 6: which you think.

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Speaker 7: Are going to be critical for this market.

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Speaker 6: Let's check in with a professional who does this stuff

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Speaker 6: for living, Marion Bartel's, chief investment strategist at Sanctuary Wealth. Marian,

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Speaker 6: thanks so much for joining us here. What's your just

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Speaker 6: your thirty thousand foot market call that you have to

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Speaker 6: your clients? What are you telling your clients that they

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Speaker 6: should be thinking about here as we head into the

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Speaker 6: back half of this year.

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Speaker 9: Well, as you pointed out, it is the alphabet soup

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Speaker 9: of news this week. You know, the markets can go

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Speaker 9: either way. But how we're telling clients to position is

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Speaker 9: we actually think that we can actually rally this week.

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Speaker 9: Markets are as over sold as they were back in April. Well,

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Speaker 9: we commit to this year. We called it the Year

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Speaker 9: of the Bucking Bull. And we've seen some bucks and

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Speaker 9: we just got through some Bucks. But we don't think

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Speaker 9: we're done with that yet. We think we can rally

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Speaker 9: one more time and then I think the market bucks

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Speaker 9: again in the fall in September and October, the traditional

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Speaker 9: seasonal very week period for the market, but then having

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Speaker 9: a year in rally, we're still expecting markets by the

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Speaker 9: S and P five hundred to be up about twenty

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Speaker 9: percent this year. We still think the leadership of the

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Speaker 9: market is intact. That's the Magnificent seven, it's technology and

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Speaker 9: that semis are still the leaders. Remember, if we're going

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Speaker 9: to go towards AI, you can't have AI without semiconductor chips.

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Speaker 6: So if the AI trade is still in place, the

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Speaker 6: tech trade is still in place, how do you get

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Speaker 6: comfortable with valuation in some of those names are just

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Speaker 6: within SMP five hundred.

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Speaker 7: In general, you know.

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Speaker 9: That's a great question. I mean, obviously, the valuations were

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Speaker 9: very high. You know, the markets were up by Nasdaq's

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Speaker 9: representation twenty percent, where a lot of the tech names are.

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Speaker 9: So between the market being extremely overbought, valuations extended, it

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Speaker 9: was time for like a mean reversion kind of trade.

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Speaker 9: Let's bring part of that in. But the reason why

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Speaker 9: these tech names have such high valuation is because they

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Speaker 9: have the strongest growth within the market. Although we're expecting

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Speaker 9: good earnings this year, the market is not abundant with earnings.

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Speaker 9: And when you don't have an abundance of earnings, you

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Speaker 9: have a growth market. Fund managers and investors are willing

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Speaker 9: to pay up for those earnings, So those stocks have

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Speaker 9: higher multiples. So I'm comfortable with higher valuations. But maybe

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Speaker 9: they just got a little bit too stretched. They've corrected

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Speaker 9: and we're still buyers of this market.

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Speaker 6: So how do you think about sectors outside of technology?

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Speaker 6: Where do you see opportunities there outside of this big

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Speaker 6: tech names.

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Speaker 9: Well, there's a couple of spaces we like infrastructure. You know,

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Speaker 9: Biden has passed a lot of pieces of legislation that

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Speaker 9: are really supporting the growth of the infrastructure of our economy.

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Speaker 9: You're really going to see a lot of stocks within

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Speaker 9: the industrial sector. Defense is also in their defense is

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Speaker 9: behaving well. With interest rates coming down and with the

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Speaker 9: FED expected to cut rates in September, which we also

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Speaker 9: anticipate by twenty five basis points. You're starting to see

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Speaker 9: some of the intrasensitive parts of the market that have

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Speaker 9: not done well, like utilities and rets we think have bottomed.

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Speaker 9: Pockets of healthcare are doing better, Biotech has broken out.

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Speaker 9: The breadth of the market has expanded, especially with that

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Speaker 9: rally in July, and we actually hit a new high

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Speaker 9: with breath indicators and the volume confirmed that. That's what

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Speaker 9: really gives us confidence that we're still in a bull

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Speaker 9: market and that we still want to be buying stocks here.

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Speaker 6: Well, that's kind of where I wanted to go, Marian.

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Speaker 6: We had, as you mentioned, kind of over the last

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Speaker 6: several weeks, kind of a little bit of a rotation,

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Speaker 6: maybe out of some of those magnificent seven names, maybe

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Speaker 6: into some other areas of market, like small caps. We

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Speaker 6: saw the Russell two thousand outperformed the S and P

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Speaker 6: by the most on.

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Speaker 7: Record over a two or three week period. Is that trade?

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Speaker 7: Is that for real? Is it a flash in a pan?

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Speaker 7: How do you think about that?

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Speaker 9: So we're not fans of small cap. It has been

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Speaker 9: a very impressive rally, and we think the reason why

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Speaker 9: it was so impressive is that fast money typically called

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Speaker 9: hedge fund CTAs, many of them had short positions within

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Speaker 9: small cap. But we think some of those positions were covered,

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Speaker 9: not all of them, but some. We just don't think

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Speaker 9: the earnings power is there for small cap to take

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Speaker 9: over leadership. So we think it's impressive. If you've been there,

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Speaker 9: it's it's been great, but it's not where we really

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Speaker 9: want to be positioning our clients right now.

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Speaker 6: How about the fix income here? You know you can

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Speaker 6: see here into your treasure and get four point four percent.

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Speaker 6: It's not a bad way to make a living here,

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Speaker 6: and if I want to maybe take some credit risk,

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Speaker 6: I can do better than that.

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Speaker 7: How do you think about fix income?

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Speaker 9: Yes, what we've been saying for a while is that

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Speaker 9: interest rates have peaked, both at the short end and

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Speaker 9: the long end of the curve. We think they're going

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Speaker 9: to continue to come down. For clients that are in

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Speaker 9: cash that are getting five percent or even above five percent,

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Speaker 9: we're warning them that can go away, especially if the

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Speaker 9: FED begins a rate cutting cycle. So we've been telling

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Speaker 9: clients to come out of short duration assets and take

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Speaker 9: a little bit more duration risk, go a little bit

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Speaker 9: more in the middle of the curve, which is called

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Speaker 9: the belly of the curve. And as you pointed out,

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Speaker 9: you can take credit risk, but we are stressing to

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Speaker 9: stay with quality.

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Speaker 2: When you take a look at quality, though, does it matter,

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Speaker 2: like why the is cutting as in ooh, the economy

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Speaker 2: is getting a lot weaker, we're looking ahead to the

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Speaker 2: jobs number. Everyone's worried about the Kaldiasom rule being triggered

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Speaker 2: versus inflation coming down.

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Speaker 9: I think it is. You know, the market thinks that

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Speaker 9: cutting rates can be a negative, and historically it is

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Speaker 9: a negative because we're cutting for the wrong reasons. The

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Speaker 9: economy is still growing a little bit slower. The consumer

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Speaker 9: is still spending, but a lot slower. We're seeing manufacturing

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Speaker 9: slow down. So I think in order to balance like unemployment,

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Speaker 9: which as you pointed out, the unemployment rate is going out,

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Speaker 9: it's important to actually try not to have a recession.

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Speaker 9: And with these warning signs that the economy is slowing,

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Speaker 9: I think it would be very appropriate for the Fed

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Speaker 9: to cut rates, But the market's not to negatively react,

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Speaker 9: because there's really nothing negatively wrong. In fact, what most

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Speaker 9: people are not talking about is that the FED has

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Speaker 9: already started easing. They change their position on their balance sheet,

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Speaker 9: They started to have less run off their balance sheet,

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Speaker 9: which is actually a form of easing. So I think

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Speaker 9: the FED has already been in easing mode. Now it

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Speaker 9: will be official with them cutting rates if they do

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Speaker 9: in September.

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Speaker 6: Would it be a problem for this market if they

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Speaker 6: surprised us and did not cut in twenty twenty four.

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Speaker 3: Yes, absolutely, that'd be huge.

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Speaker 9: That would be a big surprise, both for equities and fixing.

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Speaker 9: Come talk about a buck and bull, it's going to

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Speaker 9: be buck and running the wrong way. So I don't

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Speaker 9: think you'd want to do that to the markets. I

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Speaker 9: know people have been speculating that maybe they'll cut at

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Speaker 9: this meeting, but that would be a surprise as well,

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Speaker 9: and I think that would be interpreted as negative as

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Speaker 9: the FED is panicking over some of the recent data.

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Speaker 9: So I don't think they'll be cutting here. Pal has

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Speaker 9: been pretty traditional in telling markets what he's going to

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Speaker 9: be doing, and he pretty much sticks to that, so

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Speaker 9: I think he's kind of hinted pretty strong that it's September.

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Speaker 3: It's going to be.

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Speaker 9: Very interesting, uh, to see what they say in the

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Speaker 9: meeting this week, But I'm still betting that it's twenty

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Speaker 9: five basis points in September.

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Speaker 2: Well, before you for we let you go, what language

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Speaker 2: are you looking at to sort of firm that up?

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Speaker 2: Because You're right, if Poll doesn't want us to surprise

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Speaker 2: the market, it either has to be clear in the

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Speaker 2: statement in some way or clear in the press conference

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Speaker 2: in some way.

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Speaker 9: Yes, so I you know the fact, I mean, Pal

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Speaker 9: has sounded a little bit more dubvish, that's kind of

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Speaker 9: the tone, not as hawkish as his words and language

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Speaker 9: have been a little bit softer and a little bit

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Speaker 9: more open that things are potentially weakening. So it'll be

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Speaker 9: interesting to see exactly what they say. And I think

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Speaker 9: what I'm going to be looking for. Are they so

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Speaker 9: dubbish that the market really starts pricing in a rate

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Speaker 9: cut also for either November or December. Right now, it

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Speaker 9: looks like one hundred percent for September. Some are estimating

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Speaker 9: it could happen in November and December. But that's what

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Speaker 9: I'm really focused on. Do they hint that they cut

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Speaker 9: more than once.

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Speaker 7: All right, Mary, and thank you so much for joining us.

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Speaker 6: Marion Bartel's she's a chief investment strategist as Sanctuary Wealth,

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Speaker 6: joining us from New York via that Zoom thing.

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Speaker 7: Appreciate it. There's another bull for you. I'm still out there.

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Speaker 6: She was talking about a twenty percent total move in

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Speaker 6: the S and P five hundred for twenty twenty four,

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Speaker 6: so still got some work to do. Although she's one

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Speaker 6: of those folks which I'm in that camp as well,

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Speaker 6: which is you know, you've been in the market so long,

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Speaker 6: you really get a sense of seasonality during the year,

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Speaker 6: and I don't want to be anywhere.

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Speaker 7: Near these markets in September or October.

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Speaker 6: But that's just because my first year on Wall Street

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Speaker 6: I was September nineteen eighty seven, and that was October

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Speaker 6: nineteen eighty seven.

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Speaker 7: Oh my, that was grim.

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Speaker 3: So it's a traumatizing since.

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Speaker 7: You know you don't want to be anywhere near these markets.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple car Play and

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Speaker 1: Just say, Alexa, playing Bloomberg eleven thirty.

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Speaker 2: One of the things to look at in the market

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Speaker 2: is Bitcoin up by just one point two percent, but

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Speaker 2: it's actually up eight hundred and twenty six dollars. That's

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Speaker 2: the highest level earlier today since mid June. In the

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Speaker 2: latest catalyst was Donald Trump expanding his pro crypto agenda.

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Speaker 2: Plus you got those expectations that affet's going to be

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Speaker 2: inching its way towards a cut probably in the fall,

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Speaker 2: and that's also helping investor sentiment. So we needed to

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Speaker 2: get the read on that as well as other commodities.

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Speaker 2: With Mike mcloon, Bloomberg Intelligence Senior Commodity strategist, do you

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Speaker 2: buy the theory that President Trump comes out and says

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Speaker 2: he's going to fire Gary Gensler and he loves all

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Speaker 2: crypto things. It's going to be number one in the US. Therefore,

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Speaker 2: thus bitcoin goes up.

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Speaker 10: I impressed how you phrased the question, Alex is most

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Speaker 10: people seem to be believing that, but I look at

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Speaker 10: it as there's no and then the lesson you'll learn

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Speaker 10: is Nozell like a convert. Obviously he's converted because he

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Speaker 10: ate the crypto before, but I think he's finally realizing

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Speaker 10: things we wrote five years ago. This space is nothing

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Speaker 10: but good for America. It's most widely track crypto is

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Speaker 10: not Bitcoin. It's actually tether. The US dollar trades more

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Speaker 10: than bitcoin double on a daily basis. But it's impressive

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Speaker 10: what he's doing insane to get elected, and I think

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Speaker 10: that's the number one thing. He's saying, whatever you can

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Speaker 10: to get get elected, and that's what's happened. The crypto

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Speaker 10: people have picked up onto it. But at this rally

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Speaker 10: sounds it's a little suspicious because it happened right during

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Speaker 10: the conference. The bitcoin conference that's in Tennessee. Now that

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Speaker 10: used to be in Miami.

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Speaker 7: Why isn't it in Miami anymore?

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Speaker 5: Well, I hear that some handsome issues.

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Speaker 10: I don't really dig into that, but it's kind of

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Speaker 10: nice to see it move on because there's I just

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Speaker 10: was on a couple of calls this morning with people

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Speaker 10: were there. There's so much enthusiasm, as you expect in

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Speaker 10: crowds and people getting together and all trying to as

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Speaker 10: they sat as space pump their bags. But it it

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Speaker 10: puts on my radars. This is when you want to

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Speaker 10: be really careful with an asset that's basically three times

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Speaker 10: of Altilia betas and B five hundred basically has been

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Speaker 10: trading together with Beta for ten years, and I think

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Speaker 10: the risks are that it leads away lower.

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Speaker 5: So I'm very so skeptical.

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Speaker 10: The key thing I like can say about bitcoin is

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Speaker 10: a lot of the easy money has been made. We

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Speaker 10: had the GBTC discount that's gone. That's a great scale

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Speaker 10: bitcoin trust. We had the ETH discount that's gone, and

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Speaker 10: things like micro Strategy have performed so well. I think

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Speaker 10: I'm quite skeptical now at these levels.

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Speaker 2: Well, when we go back to the fundamental part that

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Speaker 2: President Trump was talking about in terms of wants to

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Speaker 2: make the US the bitcoin hub and not say China

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Speaker 2: or other countries, is that something that the US could actually.

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Speaker 5: Do what it already is.

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Speaker 10: I mean most of them trade in the US. Most

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Speaker 10: likely traded crypto in the planet is tethered the US dollar.

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Speaker 10: We did launch the ETFs in this country, but it

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Speaker 10: went through that normal US discourse that they don't have

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Speaker 10: in China. China and it's been banned, so it already has.

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Speaker 5: It's just.

437
00:21:45,480 --> 00:21:47,879
Speaker 10: I think people just have to remember how the system

438
00:21:47,920 --> 00:21:49,800
Speaker 10: in this country works. There is a rule of law,

439
00:21:49,880 --> 00:21:52,400
Speaker 10: we fight it out become the proper conclusion. And that's

440
00:21:52,440 --> 00:21:54,679
Speaker 10: what's happened with bitcoin. We do have ets now, it

441
00:21:54,800 --> 00:21:58,120
Speaker 10: was our bias in very beginning. We launched a Bloomberg

442
00:21:58,160 --> 00:22:01,200
Speaker 10: Galaxy crypto index in twenty eighteen. At some point ETFs

443
00:22:01,200 --> 00:22:03,359
Speaker 10: will track this in next and track broad in disease.

444
00:22:03,600 --> 00:22:04,680
Speaker 5: It's all heading that way.

445
00:22:06,040 --> 00:22:07,639
Speaker 10: I guess mister Trump is trying to say it's going

446
00:22:07,680 --> 00:22:10,560
Speaker 10: to head that way faster. But to me, what he's

447
00:22:10,600 --> 00:22:12,359
Speaker 10: saying is very much just out to get votes, and

448
00:22:12,440 --> 00:22:14,320
Speaker 10: is the questions will he do it? And what can

449
00:22:14,440 --> 00:22:15,400
Speaker 10: he do it?

450
00:22:15,520 --> 00:22:17,520
Speaker 6: Hey, Mike, for as long as I can remember, you've

451
00:22:17,520 --> 00:22:19,480
Speaker 6: been telling us to just shut up and buy gold.

452
00:22:19,960 --> 00:22:23,640
Speaker 6: It just recently hit an all time a nice way.

453
00:22:23,920 --> 00:22:25,679
Speaker 6: It recently hit an all time high. Can you just

454
00:22:25,720 --> 00:22:28,480
Speaker 6: refresh us on why gold continues to go higher?

455
00:22:29,480 --> 00:22:31,560
Speaker 10: Well, the number one reason, I think started with the

456
00:22:31,640 --> 00:22:36,199
Speaker 10: unlimited friendship between President Z and President President Putin, and

457
00:22:36,240 --> 00:22:39,399
Speaker 10: it changed the world dynamic. Now you know, top central

458
00:22:39,400 --> 00:22:41,480
Speaker 10: banks of what are buying. Gold is becoming the second

459
00:22:41,560 --> 00:22:43,640
Speaker 10: reserve acid next to the euro according to the World

460
00:22:43,680 --> 00:22:46,200
Speaker 10: Gold Council, And that to me is an under overwhelming force.

461
00:22:46,520 --> 00:22:49,760
Speaker 10: But what's most significant lately is we have had major

462
00:22:49,800 --> 00:22:52,679
Speaker 10: outflows in ETFs, which likes like they're just starting to

463
00:22:52,720 --> 00:22:55,280
Speaker 10: turn back upwards. So gold to me is the most

464
00:22:55,359 --> 00:22:57,879
Speaker 10: enduring commodity I think is continue to perform. And I

465
00:22:57,920 --> 00:23:00,280
Speaker 10: do like mentioning in the same space as crypto because

466
00:23:00,280 --> 00:23:02,959
Speaker 10: the way I see it, with equities getting very expensive,

467
00:23:03,560 --> 00:23:05,320
Speaker 10: I've been like saying for a while you can't hold

468
00:23:05,320 --> 00:23:07,920
Speaker 10: gold without some bitcoin in that space, the digital version,

469
00:23:07,960 --> 00:23:10,760
Speaker 10: But at some point I think on a risk adjusted basis,

470
00:23:10,760 --> 00:23:14,320
Speaker 10: you're better off overweight in the metal and the analog metal.

471
00:23:14,320 --> 00:23:16,280
Speaker 10: I think that's what's happening now that's starting to get

472
00:23:16,280 --> 00:23:18,720
Speaker 10: a sentiment shift. The way I see it, deflation in

473
00:23:18,760 --> 00:23:21,120
Speaker 10: the commodities is propelling inflation and goals.

474
00:23:21,119 --> 00:23:21,639
Speaker 5: I'll end with this.

475
00:23:21,720 --> 00:23:24,919
Speaker 10: The Bloomberg Commodity Index SPOT indexes right now down on

476
00:23:24,960 --> 00:23:27,720
Speaker 10: the year. It was up twelve percent in May, and

477
00:23:27,800 --> 00:23:30,159
Speaker 10: gold keeps marching along. I think those trends are going

478
00:23:30,200 --> 00:23:30,760
Speaker 10: to continue.

479
00:23:30,880 --> 00:23:32,560
Speaker 2: So to that point, and this also goes to I

480
00:23:32,560 --> 00:23:35,320
Speaker 2: think the crypto move as well. Is there an idea

481
00:23:35,359 --> 00:23:37,960
Speaker 2: that if the FED actually cuts that inflation comes back,

482
00:23:38,040 --> 00:23:40,879
Speaker 2: and then that's another reason why we're seeing say gold

483
00:23:41,000 --> 00:23:42,280
Speaker 2: and a crypto rallying.

484
00:23:43,160 --> 00:23:45,760
Speaker 10: I think that's the potential if they cut too fast.

485
00:23:45,760 --> 00:23:48,480
Speaker 10: But it's the lessons of human nature and history else

486
00:23:48,560 --> 00:23:50,520
Speaker 10: are playing out here. We all know that we created

487
00:23:50,560 --> 00:23:52,600
Speaker 10: too much liquid eating and too much inflation. Now we

488
00:23:52,640 --> 00:23:54,000
Speaker 10: had a good reason. We all thought we're going to

489
00:23:54,080 --> 00:23:56,280
Speaker 10: die four years ago. Now we're at this space now

490
00:23:56,320 --> 00:23:59,240
Speaker 10: that I think the Feds can't cut yet because the

491
00:23:59,280 --> 00:24:02,280
Speaker 10: stock markets strong and such a relevant part of GDP

492
00:24:02,440 --> 00:24:04,800
Speaker 10: two times DDP. It looks like they're going to be

493
00:24:04,800 --> 00:24:06,920
Speaker 10: behind the curve. The way I see gold, though it's

494
00:24:06,920 --> 00:24:09,840
Speaker 10: the most enduring, it's the alternatives to treasuries. I think

495
00:24:09,840 --> 00:24:11,840
Speaker 10: it's the risk off trade where you look at what's

496
00:24:11,880 --> 00:24:13,760
Speaker 10: been the most beat up asset for the last three

497
00:24:13,840 --> 00:24:16,639
Speaker 10: years long bond US treasuries, and I think that trade's

498
00:24:16,680 --> 00:24:18,840
Speaker 10: going to be happening together where gold goes up and

499
00:24:18,920 --> 00:24:21,840
Speaker 10: treasury bond yields decline, and good indication is what's happening

500
00:24:21,880 --> 00:24:25,639
Speaker 10: in China two point why two point that's ten year

501
00:24:25,680 --> 00:24:26,679
Speaker 10: note yield in China right now.

502
00:24:26,680 --> 00:24:29,080
Speaker 5: It's the lowest in our database. It's two thousand and six.

503
00:24:29,640 --> 00:24:31,119
Speaker 6: Mike, I'm going to take you back to your roots,

504
00:24:31,160 --> 00:24:33,959
Speaker 6: back on the great American farm. Boy, I'm looking at

505
00:24:34,000 --> 00:24:37,240
Speaker 6: some of these agricultural things, corn, cotton, soybeans, I mean

506
00:24:37,280 --> 00:24:39,280
Speaker 6: all down, kind of fifteen twenty percent.

507
00:24:39,840 --> 00:24:41,359
Speaker 7: Tough time to be an American farmer.

508
00:24:42,040 --> 00:24:43,640
Speaker 10: So how did you know I was there last week?

509
00:24:43,640 --> 00:24:46,399
Speaker 10: I'm all my family is in the Midwest. I always

510
00:24:46,440 --> 00:24:48,399
Speaker 10: do my crop tours, and I have to admit I

511
00:24:48,440 --> 00:24:51,880
Speaker 10: meet with family and friends and people who farm the land.

512
00:24:52,240 --> 00:24:55,640
Speaker 10: I've never seen a more luscious situation. The crop is huge,

513
00:24:55,680 --> 00:24:59,840
Speaker 10: the weather's been wonderful. Barrel the hurricane. It put us

514
00:25:00,080 --> 00:25:02,000
Speaker 10: loth of rain right in the middle of the corn

515
00:25:02,000 --> 00:25:04,879
Speaker 10: bed right during castling. Core needs it the most in July,

516
00:25:05,359 --> 00:25:07,440
Speaker 10: so supplies mass. And the problem is we still have

517
00:25:07,480 --> 00:25:09,399
Speaker 10: supply left over from last year. So I'll end with this.

518
00:25:09,480 --> 00:25:12,280
Speaker 5: It's the key fact of price. The high priced cure.

519
00:25:12,400 --> 00:25:13,440
Speaker 5: Prices got too high.

520
00:25:13,680 --> 00:25:16,560
Speaker 10: Supplies massive because prices got high, and now we have

521
00:25:16,640 --> 00:25:18,160
Speaker 10: to get to the low price cure, and I don't

522
00:25:18,160 --> 00:25:19,480
Speaker 10: know where that's going to be. And we're going to

523
00:25:19,560 --> 00:25:22,600
Speaker 10: the harvest with oversupplying a good crop, which means lower prices.

524
00:25:22,720 --> 00:25:24,960
Speaker 3: How volatile is the weather for farmers.

525
00:25:24,600 --> 00:25:27,919
Speaker 10: Right Now that's the key thing that's been happening Alex

526
00:25:28,000 --> 00:25:30,880
Speaker 10: is you have more volatile minor events like dur ratio

527
00:25:31,080 --> 00:25:34,679
Speaker 10: and like spot droughts. But what's happening this year is

528
00:25:35,720 --> 00:25:39,240
Speaker 10: we have more moisture than normal in the corn belt.

529
00:25:39,280 --> 00:25:41,640
Speaker 10: I hear that's related to sun spots and things like that,

530
00:25:41,960 --> 00:25:43,919
Speaker 10: and it's actually been a little bit cooler, so it's

531
00:25:43,920 --> 00:25:47,040
Speaker 10: almost perfect for grain production, somewhat of a greenhouse effect.

532
00:25:47,080 --> 00:25:49,600
Speaker 10: But the thing is, I think it's the quote I

533
00:25:49,640 --> 00:25:52,400
Speaker 10: heard in the Midwest. They always say Brazil nineteen years

534
00:25:52,440 --> 00:25:55,000
Speaker 10: in a row of increasing production the soybeans out of Brazil.

535
00:25:55,040 --> 00:25:58,600
Speaker 10: Its just prices are high, and it's a global competitive situation.

536
00:25:58,720 --> 00:26:00,879
Speaker 10: And here's the quote I like not is you know

537
00:26:00,920 --> 00:26:02,560
Speaker 10: the whole thing that Mark Twain. You just say you

538
00:26:02,960 --> 00:26:05,080
Speaker 10: might as well buy land because they don't create it anymore.

539
00:26:05,160 --> 00:26:07,239
Speaker 10: But the farmers in in West say, well, they are

540
00:26:07,280 --> 00:26:08,400
Speaker 10: creating it in Brazil.

541
00:26:09,119 --> 00:26:11,760
Speaker 2: All right, Hey, we appreciate you all the time, Mike,

542
00:26:11,800 --> 00:26:14,840
Speaker 2: thanks a lot, Mike mcglon and Bloomberg Intelligence Senior Commodity Strategies.

543
00:26:14,840 --> 00:26:16,720
Speaker 3: When an't we going to Miami sometime in October?

544
00:26:16,760 --> 00:26:16,920
Speaker 8: Right?

545
00:26:16,920 --> 00:26:17,360
Speaker 7: Potentially?

546
00:26:17,440 --> 00:26:17,600
Speaker 1: Yeah?

547
00:26:17,720 --> 00:26:20,639
Speaker 7: Okay, potentially if you are, we're gonna go knock on

548
00:26:20,680 --> 00:26:22,720
Speaker 7: Mike's door. Yeah, we'll just invite ourselves in.

549
00:26:22,880 --> 00:26:25,520
Speaker 3: Yeah, yep, we're going to be there, So look for us.

550
00:26:25,600 --> 00:26:26,439
Speaker 3: We will keep you posting.

551
00:26:27,960 --> 00:26:31,840
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

552
00:26:31,920 --> 00:26:34,960
Speaker 1: weekdays at ten am Eastern on Apple car Play and

553
00:26:34,960 --> 00:26:38,240
Speaker 1: Android Auto with the Bloomberg Business. You can also listen

554
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555
00:26:41,840 --> 00:26:44,520
Speaker 1: Just say Alexa Play Bloomberg eleven.

556
00:26:44,320 --> 00:26:48,600
Speaker 6: Thirty, Alex Steel, Paul Sweney're live here in our Bloomberg

557
00:26:48,640 --> 00:26:51,800
Speaker 6: Interactive Brokers studio in New York City, and we're also

558
00:26:51,800 --> 00:26:54,040
Speaker 6: streaming live on YouTube, so you can go there and

559
00:26:54,040 --> 00:26:56,960
Speaker 6: search Bloomberg Podcast, and that's where you'll find its busy

560
00:26:57,000 --> 00:27:00,560
Speaker 6: economic data week This week, I think cap off we

561
00:27:00,600 --> 00:27:01,840
Speaker 6: got jobs at the end of the week, but also

562
00:27:01,840 --> 00:27:04,840
Speaker 6: we got the Fed decision coming up on Wednesday two

563
00:27:04,840 --> 00:27:07,520
Speaker 6: pm will be the decision two thirty press conference all

564
00:27:07,520 --> 00:27:09,679
Speaker 6: Wall Street Time, bloom will be covering it for you.

565
00:27:09,720 --> 00:27:12,560
Speaker 6: Michael McKee taking the Oscella train down the DC and

566
00:27:12,600 --> 00:27:14,040
Speaker 6: he'll be all set to go there.

567
00:27:14,200 --> 00:27:15,840
Speaker 7: What do they do? That's the question here.

568
00:27:15,960 --> 00:27:16,119
Speaker 5: R J.

569
00:27:16,240 --> 00:27:19,040
Speaker 6: Gallow He's a senior portfolio manager for fixed income at

570
00:27:19,040 --> 00:27:22,800
Speaker 6: FEDERATEDT Hermes On Zoom from one of my favorite towns

571
00:27:22,840 --> 00:27:25,320
Speaker 6: in the US, Pittsburgh, Big Fin. I think they punched

572
00:27:25,280 --> 00:27:27,960
Speaker 6: away above their weight and Pittsburgh r JA. Talk to

573
00:27:28,040 --> 00:27:30,159
Speaker 6: us about what you expect to hear from your Federal

574
00:27:30,160 --> 00:27:31,960
Speaker 6: Reserve on Wednesday.

575
00:27:33,800 --> 00:27:36,600
Speaker 11: Good morning, glad to hear you're fond of my hometown.

576
00:27:36,880 --> 00:27:37,040
Speaker 5: Love.

577
00:27:38,160 --> 00:27:40,880
Speaker 11: In terms of the FED, you know, there's no dots.

578
00:27:41,240 --> 00:27:43,600
Speaker 11: There's always a press conference, and there's always a statement.

579
00:27:44,440 --> 00:27:47,960
Speaker 11: I feel like Powell and company have laid the groundwork

580
00:27:48,440 --> 00:27:51,520
Speaker 11: for the further embrace of the idea that the dual

581
00:27:51,600 --> 00:27:55,560
Speaker 11: mandate has returned. For much of the last twelve to

582
00:27:55,600 --> 00:27:58,640
Speaker 11: eighteen months, to FED, it operated almost as if they

583
00:27:58,640 --> 00:28:02,359
Speaker 11: were a single mandate central bank fighting inflation full stop.

584
00:28:03,160 --> 00:28:05,600
Speaker 11: Of course, that's not their case. Their charge is a

585
00:28:05,680 --> 00:28:08,960
Speaker 11: dual mand aid its maximum employment, stable prices, fighting inflation,

586
00:28:09,520 --> 00:28:12,960
Speaker 11: and the maximum employment element of the dual mandate is

587
00:28:13,080 --> 00:28:15,880
Speaker 11: very much back on the table. Now that you've got

588
00:28:15,880 --> 00:28:19,800
Speaker 11: inflation in a range that's tolerable and it appears to

589
00:28:19,840 --> 00:28:22,640
Speaker 11: be likely to continue to decelerate, the FED has laid

590
00:28:22,680 --> 00:28:26,200
Speaker 11: the groundwork to focus on jobs again. The unemployment rate

591
00:28:26,280 --> 00:28:29,119
Speaker 11: is up as a four point one percent, it's up

592
00:28:29,119 --> 00:28:32,440
Speaker 11: a little over four tenths from its lows. That's enough

593
00:28:32,480 --> 00:28:35,760
Speaker 11: to get the Fed to pivot. I think back in

594
00:28:35,880 --> 00:28:39,600
Speaker 11: towards this easing mode. Remember the market outran the Fed

595
00:28:39,680 --> 00:28:41,880
Speaker 11: at the end of last year. We spent all of

596
00:28:42,080 --> 00:28:44,480
Speaker 11: the winter and spring pushing back on the market. You

597
00:28:44,520 --> 00:28:47,720
Speaker 11: had negative total returns for bonds. But since April thirtieth,

598
00:28:48,040 --> 00:28:50,960
Speaker 11: you've gotten more constructive returns to bonds. So the Treasury

599
00:28:50,960 --> 00:28:54,200
Speaker 11: indexes up almost four percent since then, as the inflation

600
00:28:54,320 --> 00:28:57,320
Speaker 11: is cooperated and the FED has reopened the door to easing,

601
00:28:57,320 --> 00:28:58,880
Speaker 11: and I think they're going to address that at this

602
00:28:58,960 --> 00:29:01,120
Speaker 11: coming meeting without actually changing rates.

603
00:29:01,200 --> 00:29:05,200
Speaker 3: So why not just cut now, that's a great question.

604
00:29:07,320 --> 00:29:10,360
Speaker 11: I think that the Fed it all comes down to

605
00:29:10,360 --> 00:29:13,320
Speaker 11: that word confidence, which you've heard them uttering quite a

606
00:29:13,320 --> 00:29:16,080
Speaker 11: bit lately. You know, Recall, wasn't that long ago that

607
00:29:16,120 --> 00:29:18,960
Speaker 11: the FED had high confidence that inflation was going to

608
00:29:19,000 --> 00:29:22,240
Speaker 11: be transitory. That obviously wasn't the case. I think that

609
00:29:22,320 --> 00:29:25,200
Speaker 11: they feel now they would like to see yet more data.

610
00:29:25,800 --> 00:29:29,400
Speaker 11: There's a risk there, of course, if the market expects

611
00:29:29,440 --> 00:29:31,960
Speaker 11: you to cut in September. You're at a meeting, you know,

612
00:29:32,040 --> 00:29:36,440
Speaker 11: this week, and you're anticipating that the data will cooperate

613
00:29:36,520 --> 00:29:40,320
Speaker 11: between now and September. You know, there's a lot of

614
00:29:40,400 --> 00:29:43,960
Speaker 11: uncertainty here that the risk that they're taking is that

615
00:29:44,080 --> 00:29:48,880
Speaker 11: the inflation data will continue to moderate, but the jobs

616
00:29:48,960 --> 00:29:52,080
Speaker 11: data won't fall off some sort of cliff. Probably a

617
00:29:52,120 --> 00:29:55,120
Speaker 11: reasonable risk. The economy seems to have decent momentum. Q

618
00:29:55,200 --> 00:29:58,920
Speaker 11: two GDP data turned out to be stronger than anticipated.

619
00:29:59,400 --> 00:30:01,320
Speaker 11: It's true that the jaws market has lost some of

620
00:30:01,360 --> 00:30:04,760
Speaker 11: its verve, but it's still very much, you know, expanding

621
00:30:04,760 --> 00:30:06,640
Speaker 11: in the sense that jobs keep getting created at a

622
00:30:06,680 --> 00:30:09,880
Speaker 11: pretty reasonable pace. So it's a bet they're willing to take.

623
00:30:10,160 --> 00:30:13,440
Speaker 11: If they were to ease this week, I think that

624
00:30:13,480 --> 00:30:15,920
Speaker 11: would telegraph to markets that the Fed has gotten much

625
00:30:15,920 --> 00:30:19,000
Speaker 11: more concerned about the employment part of their mandate, and

626
00:30:19,040 --> 00:30:23,520
Speaker 11: it might sort of backfire. Bond yields would would probably rally,

627
00:30:24,120 --> 00:30:27,840
Speaker 11: you know, collapse much more rapidly, maybe you know, twenty

628
00:30:27,840 --> 00:30:30,360
Speaker 11: five thirty basis points, because people would be concerned that

629
00:30:30,440 --> 00:30:34,160
Speaker 11: the Fed is anticipating greater economic weakness. In so doing,

630
00:30:34,200 --> 00:30:37,560
Speaker 11: it could actually blow back in the other direction. Keep

631
00:30:37,600 --> 00:30:41,480
Speaker 11: the economy buoyant and then inflation doesn't cooperate. There's not

632
00:30:41,520 --> 00:30:43,400
Speaker 11: a pure science here. There's a lot of judgment, and

633
00:30:43,440 --> 00:30:45,600
Speaker 11: in their judgment, they think waiting is a reasonable risk.

634
00:30:46,440 --> 00:30:48,600
Speaker 6: Are Jay, I'm a big fan of municipal bonds. I

635
00:30:48,640 --> 00:30:50,160
Speaker 6: like to think of myself as one of the larger

636
00:30:50,200 --> 00:30:52,360
Speaker 6: private creditors to the State of New Jersey through my

637
00:30:52,480 --> 00:30:54,880
Speaker 6: municipal bond holdings. What do you think about the community

638
00:30:54,920 --> 00:30:55,440
Speaker 6: market here?

639
00:30:57,400 --> 00:30:59,960
Speaker 11: Well, yeah, the community market. Yeah. If you look back,

640
00:31:00,200 --> 00:31:03,000
Speaker 11: there's very very strong correlations in total returns between munis

641
00:31:03,000 --> 00:31:05,239
Speaker 11: and treasuries. If you look at monthly total returns for

642
00:31:05,240 --> 00:31:08,880
Speaker 11: twenty five years, the correlation of returns is around sixty percent.

643
00:31:09,080 --> 00:31:12,680
Speaker 11: It's not one hundred, but it's still high. So interest

644
00:31:12,760 --> 00:31:16,360
Speaker 11: rates are the driving theme that linked the muni market

645
00:31:16,600 --> 00:31:19,880
Speaker 11: to the tax will market. That is very clear. Beyond that,

646
00:31:20,040 --> 00:31:23,520
Speaker 11: you worry a lot about muni specific dynamics, for example,

647
00:31:23,720 --> 00:31:26,959
Speaker 11: expected changes in tax rates or changes in the supply

648
00:31:27,600 --> 00:31:31,120
Speaker 11: of munis coming into the marketplace. This year's supply has

649
00:31:31,120 --> 00:31:34,160
Speaker 11: been heavy, but demand has been buoyant, and muni ratios

650
00:31:34,200 --> 00:31:37,200
Speaker 11: have remained relatively rich, sort of below long term averages.

651
00:31:37,600 --> 00:31:40,360
Speaker 11: Why is that? I think there's some concern that tax

652
00:31:40,440 --> 00:31:43,680
Speaker 11: rates might be rising as we move forward down the

653
00:31:43,720 --> 00:31:46,880
Speaker 11: calendar here. You know, the Trump tax cuts basically sunset

654
00:31:46,920 --> 00:31:50,120
Speaker 11: with respective personal income tax rates. Investors are I think

655
00:31:50,200 --> 00:31:53,920
Speaker 11: motivated to lock in some still relatively high muni yields,

656
00:31:53,920 --> 00:31:57,320
Speaker 11: in part because the interest rate cycle has pushed yields up,

657
00:31:57,320 --> 00:31:59,400
Speaker 11: and in part because they think taxes might be going

658
00:31:59,440 --> 00:32:02,360
Speaker 11: up in the future. If Trump gets re elected, he'll

659
00:32:02,400 --> 00:32:04,840
Speaker 11: probably try to extend all those personal tax rates, and

660
00:32:04,960 --> 00:32:07,640
Speaker 11: UNI returns might actually sort of be a little vulnerable.

661
00:32:07,680 --> 00:32:09,760
Speaker 11: Even if interest rates are coming down, unis might not

662
00:32:09,920 --> 00:32:13,160
Speaker 11: keep up and rally quite as hard. In short, we

663
00:32:13,240 --> 00:32:16,560
Speaker 11: think muni's are still a pretty safe place to be

664
00:32:16,680 --> 00:32:20,800
Speaker 11: from credit standpoint. The rates scenario is probably getting more constructive.

665
00:32:21,000 --> 00:32:24,280
Speaker 11: The tax policy scenario and the related supply dynamic have

666
00:32:24,360 --> 00:32:26,920
Speaker 11: been the greater questions, but those are sort of tolerable

667
00:32:27,000 --> 00:32:29,040
Speaker 11: risks in the near term. I think muni's are a

668
00:32:29,040 --> 00:32:31,080
Speaker 11: pretty good place to be for you and for many others.

669
00:32:31,160 --> 00:32:33,280
Speaker 2: Okay, yeah, so you love muni's, but then you take

670
00:32:33,280 --> 00:32:35,440
Speaker 2: every Friday off and then I'm at the muni segment,

671
00:32:35,520 --> 00:32:37,680
Speaker 2: I know, and I'm literally prepping all week to make

672
00:32:37,720 --> 00:32:40,920
Speaker 2: it through. My Muni segment are talking about the curve.

673
00:32:41,640 --> 00:32:44,120
Speaker 2: Do we get that steepener? Finally, what does this deepener

674
00:32:44,200 --> 00:32:46,640
Speaker 2: look like? Is it going to because buying in the

675
00:32:46,680 --> 00:32:48,320
Speaker 2: front end or a selloff in the long end? And

676
00:32:48,360 --> 00:32:49,320
Speaker 2: what does all that wind up?

677
00:32:49,320 --> 00:32:55,080
Speaker 11: Meaning great questions on the month. So in July is

678
00:32:55,080 --> 00:32:58,760
Speaker 11: almost over right. So the twos tens and the five

679
00:32:58,880 --> 00:33:02,440
Speaker 11: thirties treasuries curves steep in fifteen and seventeen basis points,

680
00:33:02,720 --> 00:33:04,760
Speaker 11: and the two thirty, you know, a very long curve

681
00:33:05,320 --> 00:33:08,480
Speaker 11: has steepened twenty three basis points. The steepener is working

682
00:33:09,200 --> 00:33:12,320
Speaker 11: at federating hermes. We sort of look at the top

683
00:33:12,360 --> 00:33:17,239
Speaker 11: down drivers of fixing income portfolios, duration, curve, credit, and

684
00:33:17,320 --> 00:33:20,560
Speaker 11: we assemble some of our top people in what we

685
00:33:20,680 --> 00:33:24,640
Speaker 11: call alpha pods or investment committees. Our curve committee has

686
00:33:24,640 --> 00:33:28,640
Speaker 11: been very successful positioning for the steepening that has occurred.

687
00:33:28,640 --> 00:33:31,720
Speaker 11: We think there's still more to come. The steepening typically

688
00:33:32,000 --> 00:33:34,480
Speaker 11: is resulting from a couple of things. One, even though

689
00:33:34,480 --> 00:33:36,480
Speaker 11: inflation has come down, which would make you feel like

690
00:33:36,520 --> 00:33:38,719
Speaker 11: the curve shuld flatten, the curve has been inverted for

691
00:33:38,760 --> 00:33:41,160
Speaker 11: so long that the fact that the Fed has opened

692
00:33:41,160 --> 00:33:42,720
Speaker 11: the door to easing, as we were talking about a

693
00:33:42,760 --> 00:33:45,520
Speaker 11: few moments ago. That has helped the curve to steepen

694
00:33:45,600 --> 00:33:48,280
Speaker 11: back out. The curve that steep in so long as

695
00:33:48,320 --> 00:33:52,560
Speaker 11: the FED continues in that easing direction Number one, number two,

696
00:33:52,880 --> 00:33:56,200
Speaker 11: so long as the economy doesn't sort of stumble rapidly

697
00:33:56,400 --> 00:33:59,480
Speaker 11: or inflation researches. So we think that the old curve

698
00:33:59,560 --> 00:34:02,280
Speaker 11: is working for us. We still like the bet. In

699
00:34:02,360 --> 00:34:05,040
Speaker 11: the Muni space, the curve has been strangely U shaped,

700
00:34:05,560 --> 00:34:08,879
Speaker 11: heavily driven by expectations for a softer FED, and as

701
00:34:08,880 --> 00:34:11,839
Speaker 11: the Fed's moved in that direction, the U is hollowing out.

702
00:34:11,960 --> 00:34:15,000
Speaker 11: It hasn't fully become an upper sloping curve just yet,

703
00:34:15,239 --> 00:34:17,960
Speaker 11: but the same dynamic that manifested in treasuries is now

704
00:34:17,960 --> 00:34:21,280
Speaker 11: working in terms of sort of making a more reasonable

705
00:34:21,280 --> 00:34:22,640
Speaker 11: shape for the Muni curve as well.

706
00:34:23,320 --> 00:34:25,920
Speaker 7: How much credit risk are you guys willing to take

707
00:34:25,960 --> 00:34:26,439
Speaker 7: these days?

708
00:34:28,360 --> 00:34:32,239
Speaker 11: So the Munich credit scenario has been very favorable. The

709
00:34:32,600 --> 00:34:36,520
Speaker 11: long economic expansion post pandemic, which has outpaced most people's

710
00:34:36,560 --> 00:34:39,520
Speaker 11: expectations in terms of job creation and in terms of

711
00:34:39,560 --> 00:34:42,800
Speaker 11: outright GDP growth, that has you know, that's a rising

712
00:34:42,880 --> 00:34:46,279
Speaker 11: tide that lifts all muni boats. State governments are doing well.

713
00:34:46,320 --> 00:34:49,080
Speaker 11: You mentioned the state of New Jersey. They've been upgraded

714
00:34:49,560 --> 00:34:52,680
Speaker 11: into the single A range. You even had the state

715
00:34:52,719 --> 00:34:54,600
Speaker 11: of Illinois, which at one point a number of years

716
00:34:54,600 --> 00:34:56,640
Speaker 11: ago we were debating whether they should be a junk bond.

717
00:34:56,920 --> 00:35:00,480
Speaker 11: They've been upgraded into the single A range we've had.

718
00:35:00,000 --> 00:35:03,680
Speaker 11: I don't know if it's been a golden era, but

719
00:35:03,760 --> 00:35:06,880
Speaker 11: it's been a strong period for uni credit, both at

720
00:35:06,920 --> 00:35:09,240
Speaker 11: the state level and the local level. The local levels

721
00:35:09,280 --> 00:35:13,520
Speaker 11: benefited sharply from rising property valuations. We all worry about

722
00:35:13,560 --> 00:35:17,440
Speaker 11: commercial real estate, specifically offices, but when you consider that

723
00:35:17,560 --> 00:35:20,840
Speaker 11: residential real estate has surged, and many municipalities in this

724
00:35:20,880 --> 00:35:23,920
Speaker 11: country have more residential than office in their tax base.

725
00:35:24,239 --> 00:35:28,319
Speaker 11: Generally speaking, local governments are also doing relatively well in

726
00:35:28,360 --> 00:35:30,680
Speaker 11: a world like that. So long as we anticipate the

727
00:35:30,719 --> 00:35:33,560
Speaker 11: economy still growing and the Feds moving towards an ease,

728
00:35:33,800 --> 00:35:36,560
Speaker 11: we're still happy to take mid and low quality credit

729
00:35:36,640 --> 00:35:39,840
Speaker 11: risk in our muni portfolios. So we've been overweight a's

730
00:35:40,600 --> 00:35:43,319
Speaker 11: and overweight in the high yield space, and it's work

731
00:35:43,480 --> 00:35:45,480
Speaker 11: that's been the best performing part of the meuning market.

732
00:35:45,560 --> 00:35:48,680
Speaker 11: On a year to day basis. By far, going forward

733
00:35:48,760 --> 00:35:51,200
Speaker 11: spreads are a little tighter. It's probably a little less compelling,

734
00:35:51,400 --> 00:35:53,359
Speaker 11: but we still like the carry idea. And so long

735
00:35:53,400 --> 00:35:55,640
Speaker 11: as the fed's easy and the economy is not tanking,

736
00:35:56,280 --> 00:35:58,600
Speaker 11: taking some credit risk, communis is probably the right place

737
00:35:58,640 --> 00:35:58,759
Speaker 11: to be.

738
00:36:00,040 --> 00:36:00,759
Speaker 3: Really appreciate you.

739
00:36:00,800 --> 00:36:01,480
Speaker 2: Thank you very much.

740
00:36:01,520 --> 00:36:01,759
Speaker 5: Our J.

741
00:36:01,880 --> 00:36:05,279
Speaker 2: Gallow, Senior portfolio manager, Great Insight There fixed Income over

742
00:36:05,280 --> 00:36:06,360
Speaker 2: at federid Hermes.

743
00:36:06,680 --> 00:36:09,759
Speaker 3: Joining us, you're listening to.

744
00:36:09,719 --> 00:36:13,719
Speaker 1: The Bloomberg Intelligence Podcast. Catch us live weekdays at ten

745
00:36:13,760 --> 00:36:17,000
Speaker 1: am Eastern on applecar Play and Android Auto with the

746
00:36:17,040 --> 00:36:20,320
Speaker 1: Bloomberg Business app. You can also listen live on Amazon

747
00:36:20,400 --> 00:36:23,719
Speaker 1: Alexa from our flagship New York station. Just say Alexa

748
00:36:23,920 --> 00:36:25,560
Speaker 1: play Bloomberg eleven thirty.

749
00:36:27,320 --> 00:36:29,439
Speaker 2: Let's get back to the markets. Nor was just talking

750
00:36:29,440 --> 00:36:31,600
Speaker 2: about this, but a hein again. Those shares are down

751
00:36:31,640 --> 00:36:34,520
Speaker 2: almost ten percent over in. Europe's taking about a nine

752
00:36:34,560 --> 00:36:37,439
Speaker 2: hundred and forty nine million dollar hit from China, giving

753
00:36:37,480 --> 00:36:39,600
Speaker 2: a cautious outlook, and it wasn't just China, it's also

754
00:36:39,760 --> 00:36:41,799
Speaker 2: US and Europe as well. So we want to get

755
00:36:41,840 --> 00:36:45,160
Speaker 2: more on that and head to our Bloomberg Intelligence folks.

756
00:36:45,320 --> 00:36:49,440
Speaker 2: A Duncan Fox's Bloomberg Intelligence consumer staples analyst is joining us.

757
00:36:49,440 --> 00:36:52,720
Speaker 2: Hey duncan, what can you run us through the laundry?

758
00:36:52,800 --> 00:36:54,520
Speaker 2: List of the things that were a problem for Heinegan

759
00:36:54,560 --> 00:36:55,359
Speaker 2: this quarter.

760
00:36:57,080 --> 00:36:59,600
Speaker 12: Well, I suppose the main one was consumer sentiment was

761
00:37:00,080 --> 00:37:04,279
Speaker 12: still quite weak. So what they were hoping for was

762
00:37:04,280 --> 00:37:06,800
Speaker 12: a bit of a bounce back in Europe for volume

763
00:37:06,840 --> 00:37:10,040
Speaker 12: with the Europe twenty twenty four, but unfortunately the weather

764
00:37:10,200 --> 00:37:13,160
Speaker 12: was just again or in northern Europe, so that was

765
00:37:13,200 --> 00:37:13,480
Speaker 12: a hit.

766
00:37:14,000 --> 00:37:17,080
Speaker 8: In China, it's just that China Resources.

767
00:37:17,120 --> 00:37:20,319
Speaker 12: Be a share price has been below the price they

768
00:37:20,360 --> 00:37:23,680
Speaker 12: bought it for about four or five months now, and

769
00:37:23,840 --> 00:37:27,440
Speaker 12: the accounting system means they have to take that hit.

770
00:37:27,800 --> 00:37:29,879
Speaker 12: So if if that share price goes back up again

771
00:37:29,920 --> 00:37:34,399
Speaker 12: whenever the Chinese economy recovers, then they'll get some sort

772
00:37:34,400 --> 00:37:36,440
Speaker 12: of recovery from that, but I can't tell you when

773
00:37:36,480 --> 00:37:39,240
Speaker 12: that will be. So it's just double consumer.

774
00:37:39,560 --> 00:37:42,919
Speaker 6: So what is Heineken saying about just underlying demand in general?

775
00:37:42,960 --> 00:37:45,239
Speaker 6: What are they saying about the consumer and is there

776
00:37:45,600 --> 00:37:46,520
Speaker 6: regional differences?

777
00:37:46,560 --> 00:37:52,680
Speaker 13: I guess basically the consumer's been hit by inflation class

778
00:37:52,760 --> 00:37:56,000
Speaker 13: years from double digit pricing, and I think they're just

779
00:37:56,200 --> 00:37:59,239
Speaker 13: pairing back the big problem is that people are not

780
00:37:59,280 --> 00:38:01,680
Speaker 13: really going to the as much the entrade.

781
00:38:02,080 --> 00:38:05,080
Speaker 12: That's where they make great profit. Well in Europe, it's

782
00:38:05,120 --> 00:38:09,000
Speaker 12: certainly been the case in places like Africa where you've

783
00:38:09,000 --> 00:38:12,200
Speaker 12: had devaluation as well. You've just got a working way

784
00:38:12,200 --> 00:38:15,040
Speaker 12: through that and they've done a very good job actually,

785
00:38:15,080 --> 00:38:19,080
Speaker 12: but you still have the short term issue where you know,

786
00:38:19,520 --> 00:38:22,040
Speaker 12: Nigeria is a big market for them when you get

787
00:38:22,040 --> 00:38:26,239
Speaker 12: a massive devaluation. So they're just working their way through

788
00:38:26,280 --> 00:38:28,560
Speaker 12: all these issues. They're doing actually gote a good job

789
00:38:28,560 --> 00:38:33,080
Speaker 12: on the ground, but weather was the real thing that

790
00:38:33,200 --> 00:38:35,560
Speaker 12: was a surprise. I mean the upgraded guidance a little,

791
00:38:36,000 --> 00:38:37,879
Speaker 12: but I think people are expecting a bit more because

792
00:38:37,880 --> 00:38:38,839
Speaker 12: of the Euro twenty four.

793
00:38:39,280 --> 00:38:43,200
Speaker 2: So Paul brought up sort of those mixed infused cocktails

794
00:38:43,239 --> 00:38:45,960
Speaker 2: and stuff. I can get the mimosa in a can.

795
00:38:46,080 --> 00:38:49,080
Speaker 2: It's not terrible at all. Does Heinekin have exposure to

796
00:38:49,160 --> 00:38:51,319
Speaker 2: that kind of stuff and is that sort of eroding

797
00:38:51,480 --> 00:38:53,000
Speaker 2: the appeal of beer at all?

798
00:38:55,040 --> 00:38:55,200
Speaker 8: Well?

799
00:38:55,239 --> 00:38:58,200
Speaker 12: Beers getting it from each from every angle really, because

800
00:38:58,200 --> 00:39:01,600
Speaker 12: you're seeing a lot of these new on to drinks.

801
00:39:01,600 --> 00:39:03,560
Speaker 8: I probably grew with poorn that once. Some of them

802
00:39:03,560 --> 00:39:04,360
Speaker 8: are a bit weird.

803
00:39:04,440 --> 00:39:09,360
Speaker 12: But they've got Desperado, which is a spirit based beer,

804
00:39:10,000 --> 00:39:12,280
Speaker 12: tequila based beer, which is doing very well.

805
00:39:12,600 --> 00:39:13,880
Speaker 8: So they have got.

806
00:39:14,239 --> 00:39:18,279
Speaker 12: Things that they can attack these products with. But you

807
00:39:18,360 --> 00:39:22,360
Speaker 12: need to keep basically innovating with new things all the time.

808
00:39:23,280 --> 00:39:26,160
Speaker 12: You know, Diazu're doing a pretty good job on trying

809
00:39:26,200 --> 00:39:27,959
Speaker 12: to do that. But the problem is some of these

810
00:39:28,280 --> 00:39:31,280
Speaker 12: don't last very long the eighteen months and then things

811
00:39:31,280 --> 00:39:33,840
Speaker 12: sort of fall off a cliff, so you've got to

812
00:39:34,080 --> 00:39:35,440
Speaker 12: sort of keep replacing.

813
00:39:35,040 --> 00:39:36,760
Speaker 8: Them otherwise you're getting bit of trouble.

814
00:39:37,239 --> 00:39:39,400
Speaker 12: Actually, the Hearnickeer one's doing well, but they just haven't

815
00:39:39,400 --> 00:39:40,920
Speaker 12: come up with innovation in that area.

816
00:39:41,120 --> 00:39:42,959
Speaker 8: It's probably not their key area of porn.

817
00:39:43,360 --> 00:39:46,000
Speaker 7: Hey, Duncan, If I were to go later on today

818
00:39:46,320 --> 00:39:49,600
Speaker 7: to sand Banks Beach in Dorset, which is in the

819
00:39:49,640 --> 00:39:52,319
Speaker 7: southwest of England, is it a beach day today? Am

820
00:39:52,360 --> 00:39:54,480
Speaker 7: I going to get? What's it like out there? Sand Bank?

821
00:39:54,520 --> 00:39:55,080
Speaker 8: It's beautiful.

822
00:39:55,120 --> 00:39:58,640
Speaker 12: It's absolutely beautiful here today. I'm a about forty mile

823
00:39:58,640 --> 00:40:00,640
Speaker 12: away from it, but it fucker get there.

824
00:40:00,680 --> 00:40:00,960
Speaker 8: I would.

825
00:40:01,040 --> 00:40:04,720
Speaker 12: I'll go to a different beach this evening and it's beautiful,

826
00:40:04,760 --> 00:40:08,960
Speaker 12: about twenty four degrees, very sunny, lovely, perfect day for a.

827
00:40:08,880 --> 00:40:11,400
Speaker 7: Bit, perfect day for a beers. That's a kind of segue.

828
00:40:11,480 --> 00:40:13,200
Speaker 6: So let's go to that Doug and is are there

829
00:40:13,680 --> 00:40:16,920
Speaker 6: is Heinken calling out different regions of the world behaving differently,

830
00:40:16,920 --> 00:40:19,840
Speaker 6: as the US market stronger than the European.

831
00:40:19,520 --> 00:40:22,440
Speaker 3: If you have a nice beach, your sales are up exactly.

832
00:40:23,440 --> 00:40:27,319
Speaker 12: Well, certainly it's the suns out. It's they're not that

833
00:40:27,400 --> 00:40:28,280
Speaker 12: big in the US.

834
00:40:28,960 --> 00:40:31,640
Speaker 8: Latin America they're big, and they they've been.

835
00:40:32,160 --> 00:40:34,160
Speaker 12: They've taken quite a lot of costs out. They were

836
00:40:34,480 --> 00:40:36,239
Speaker 12: importing bottles to Brazil.

837
00:40:35,920 --> 00:40:38,239
Speaker 8: For instance, which is a huge market for them, so

838
00:40:38,280 --> 00:40:39,439
Speaker 8: they've taken the cost down.

839
00:40:39,480 --> 00:40:43,680
Speaker 12: So it's not particularly great consumer environment there, but the

840
00:40:43,680 --> 00:40:45,680
Speaker 12: profits are improving because you.

841
00:40:45,640 --> 00:40:48,279
Speaker 8: Know, they've realigned their cost base.

842
00:40:49,280 --> 00:40:53,000
Speaker 12: In Asia, they're bouncing back from a really horrid time last.

843
00:40:52,880 --> 00:40:55,520
Speaker 8: Year where the economy is. Vietnam in particular.

844
00:40:55,600 --> 00:40:57,880
Speaker 12: Had a terrible time in sort of Q two and

845
00:40:57,960 --> 00:41:00,600
Speaker 12: Q three last year, so that's bounced back.

846
00:41:01,040 --> 00:41:04,040
Speaker 8: I wouldn't say the beer market because of regulation.

847
00:41:03,760 --> 00:41:08,560
Speaker 12: Is buoyant, but they're gaining share and they've they've done

848
00:41:08,560 --> 00:41:11,160
Speaker 12: innovation on the beer beer market there that seems to

849
00:41:11,160 --> 00:41:11,560
Speaker 12: be working.

850
00:41:11,680 --> 00:41:12,040
Speaker 8: Very well.

851
00:41:12,080 --> 00:41:14,080
Speaker 12: So there are a few issues in Asia that they

852
00:41:14,120 --> 00:41:19,239
Speaker 12: still got to overcome. You know, China some quite a

853
00:41:19,320 --> 00:41:22,080
Speaker 12: chunky bit of their market now, so they need to

854
00:41:22,120 --> 00:41:26,680
Speaker 12: see that economy improved. Places like Cambodia have got a

855
00:41:26,680 --> 00:41:28,400
Speaker 12: bit of an issue in the short term because of

856
00:41:28,400 --> 00:41:32,080
Speaker 12: the economic growth. So just a case of good old

857
00:41:32,719 --> 00:41:36,480
Speaker 12: policies from governments turning the economies around. I'm sure we

858
00:41:36,560 --> 00:41:37,200
Speaker 12: get a bit.

859
00:41:37,440 --> 00:41:40,480
Speaker 8: Happier with what with life, and people then go out

860
00:41:40,520 --> 00:41:41,120
Speaker 8: and buy beer.

861
00:41:41,880 --> 00:41:44,200
Speaker 2: We were also just talking to our Bloomberg Equities reporter

862
00:41:44,239 --> 00:41:47,560
Speaker 2: at normal Inda about Constellation brands that's not getting dragged

863
00:41:47,600 --> 00:41:48,760
Speaker 2: down by Heinegen.

864
00:41:49,719 --> 00:41:50,640
Speaker 3: Is that a fair assessment?

865
00:41:50,680 --> 00:41:53,719
Speaker 2: Like, is Heinegan a warning sign to all the alcoholic

866
00:41:53,960 --> 00:41:57,680
Speaker 2: company alcoholic at the alcohol producing companies or is a

867
00:41:57,719 --> 00:42:00,840
Speaker 2: lot of this just a Heinegan specific issue.

868
00:42:01,880 --> 00:42:04,279
Speaker 12: I think it shares it's a difficult type of beer

869
00:42:04,360 --> 00:42:06,839
Speaker 12: company in particular. I mean, there was a hope that

870
00:42:07,400 --> 00:42:11,719
Speaker 12: the summer of sport would give them my sillip, but

871
00:42:11,800 --> 00:42:15,520
Speaker 12: if the weather's bad, you just can't get that volumear.

872
00:42:15,560 --> 00:42:18,320
Speaker 12: People have to go out and buy the beer prefly

873
00:42:18,360 --> 00:42:21,040
Speaker 12: the premium beers, So you know that's going to hit

874
00:42:21,080 --> 00:42:23,520
Speaker 12: from maybe a bi consulation a little bit. But they're

875
00:42:23,560 --> 00:42:25,520
Speaker 12: in different, completely different markets.

876
00:42:26,800 --> 00:42:27,279
Speaker 8: I don't know.

877
00:42:27,840 --> 00:42:30,160
Speaker 12: I don't cover consolation, but I think, yeah, they're doing

878
00:42:30,360 --> 00:42:32,239
Speaker 12: very very well in the US. They can clear off

879
00:42:32,239 --> 00:42:36,760
Speaker 12: ABI after last year's marketing errors.

880
00:42:37,440 --> 00:42:39,520
Speaker 8: And it does seem that premium beer is doing quite well.

881
00:42:39,520 --> 00:42:41,600
Speaker 12: I mean can add nine percent volume growth to the

882
00:42:41,640 --> 00:42:44,360
Speaker 12: half there for the highly Can brand, which shows it

883
00:42:44,440 --> 00:42:47,680
Speaker 12: about a twenty five percent premium to mainstream beer. So

884
00:42:48,239 --> 00:42:50,319
Speaker 12: there are pockets in there that are doing well. If

885
00:42:50,360 --> 00:42:54,120
Speaker 12: you've got good premium brands, you can do well spirits.

886
00:42:54,160 --> 00:42:55,200
Speaker 8: We get the main.

887
00:42:55,040 --> 00:42:57,840
Speaker 12: Results tomorrow, so it could be it would be interesting,

888
00:42:57,960 --> 00:43:00,799
Speaker 12: we know as in a sort of inventory issues there

889
00:43:01,200 --> 00:43:03,680
Speaker 12: that need to be sort of ticked off before you'll

890
00:43:03,680 --> 00:43:07,799
Speaker 12: see your recovery. If the camp is saying that, then

891
00:43:07,880 --> 00:43:11,480
Speaker 12: we could you could shift out of beer maybe back

892
00:43:11,480 --> 00:43:13,239
Speaker 12: into spirits in the short term.

893
00:43:13,360 --> 00:43:15,279
Speaker 7: All right, Duncan, thanks very much, appreciate it.

894
00:43:15,360 --> 00:43:19,799
Speaker 6: Duncan, Fox Consumer Staples, Alice Bloomberg Intelligence zooming in from

895
00:43:19,880 --> 00:43:24,160
Speaker 6: Lovely Dorset on the southwest coast of England. Something thinking

896
00:43:24,160 --> 00:43:26,200
Speaker 6: about it heading out to the beach there, all right,

897
00:43:26,280 --> 00:43:29,120
Speaker 6: twenty four This is a convert this. I convert celsius

898
00:43:29,120 --> 00:43:32,160
Speaker 6: in it, take it, I double it in AD thirty

899
00:43:32,400 --> 00:43:33,799
Speaker 6: and that gets me pretty dark close.

900
00:43:33,840 --> 00:43:37,160
Speaker 7: So twenty four degree celsius forty eight plus thirty seventy eight.

901
00:43:37,200 --> 00:43:38,880
Speaker 7: That's a nice day. Okay, that's about as good as

902
00:43:38,880 --> 00:43:39,760
Speaker 7: it gets in England.

903
00:43:39,800 --> 00:43:41,640
Speaker 3: I like that double it AD thirty yep.

904
00:43:42,040 --> 00:43:44,040
Speaker 2: Okay, I'm gonna use that because sometimes you know, I

905
00:43:44,120 --> 00:43:45,520
Speaker 2: just kind of guesstimate it. You don't know if it's

906
00:43:45,560 --> 00:43:46,480
Speaker 2: true anyway.

907
00:43:46,520 --> 00:43:51,120
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908
00:43:51,239 --> 00:43:54,160
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909
00:43:54,239 --> 00:43:57,840
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910
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911
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