1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:21,120 Speaker 1: at Bloomberg dot com slash podcast. I want to talk 7 00:00:21,239 --> 00:00:24,959 Speaker 1: energy here, I don't. We'll talk fossil fuels, we'll talk oil, gas, 8 00:00:25,000 --> 00:00:26,360 Speaker 1: all that kind of stuff, but I also want to 9 00:00:26,360 --> 00:00:28,640 Speaker 1: talk solar and we can do that with Rob Barnett, 10 00:00:28,880 --> 00:00:31,960 Speaker 1: Senior analyst. He's a team lead for all the European 11 00:00:32,040 --> 00:00:34,280 Speaker 1: energy stuff that comes out of Bloomberg Intelligence. And I 12 00:00:34,680 --> 00:00:37,760 Speaker 1: initially said earlier the worst haircut on on Wall Street, 13 00:00:37,760 --> 00:00:39,720 Speaker 1: but it could, in the eyes of many, be the 14 00:00:39,840 --> 00:00:42,519 Speaker 1: best haircut on Wall Street. And you haven't seen it. 15 00:00:42,560 --> 00:00:46,479 Speaker 1: Go YouTube summer Rob's cool video clips. Rob, thanks so 16 00:00:46,520 --> 00:00:49,600 Speaker 1: much for joining us here. What are your institutional investors 17 00:00:49,600 --> 00:00:51,160 Speaker 1: want to talk about that they want to talk about 18 00:00:51,159 --> 00:00:54,440 Speaker 1: Brent crude at seventy two dollars I'm sorry, seventies six dollars, 19 00:00:54,560 --> 00:00:56,680 Speaker 1: or do they want to talk about solar and wind 20 00:00:56,720 --> 00:00:58,160 Speaker 1: and that kind of stuff. What do your clients want 21 00:00:58,160 --> 00:01:00,760 Speaker 1: to talk about. Look, it's all of the above. We've 22 00:01:00,800 --> 00:01:07,119 Speaker 1: got an investor base that is really excited about what 23 00:01:07,200 --> 00:01:11,319 Speaker 1: the oil market could do in three but solar is 24 00:01:11,360 --> 00:01:15,280 Speaker 1: also really hot, and in our view, at least the 25 00:01:15,280 --> 00:01:18,000 Speaker 1: way we look at it here at b I, there's 26 00:01:18,160 --> 00:01:22,840 Speaker 1: nothing incongruous about the idea that you could perhaps have 27 00:01:23,000 --> 00:01:26,000 Speaker 1: a bull run in the oil market and also have 28 00:01:26,319 --> 00:01:29,759 Speaker 1: solar demand growing like crazy. And so that's really how 29 00:01:29,800 --> 00:01:32,640 Speaker 1: we see the world next year. We've got a very 30 00:01:32,680 --> 00:01:35,560 Speaker 1: strong call on how fast solar demands gonna grow. It's 31 00:01:35,560 --> 00:01:38,160 Speaker 1: gonna be the fastest growing segment of energy by far. 32 00:01:38,800 --> 00:01:42,320 Speaker 1: But the oil space looks pretty tight as well. You've 33 00:01:42,319 --> 00:01:45,400 Speaker 1: got a tight set of supply demand fundamentals, and our 34 00:01:45,560 --> 00:01:48,320 Speaker 1: our team that looks after the oil guys, uh, they 35 00:01:48,320 --> 00:01:51,080 Speaker 1: see a pretty tight market. Yeah. I mean, I think 36 00:01:51,120 --> 00:01:55,040 Speaker 1: it's interesting rob that, and I can understand why at 37 00:01:55,080 --> 00:01:58,000 Speaker 1: first glance you would think that um solar and oil 38 00:01:58,040 --> 00:02:01,760 Speaker 1: are competitors. But in the now they're not, are they. 39 00:02:01,840 --> 00:02:06,080 Speaker 1: It's pretty easy to see a world where everybody wants 40 00:02:06,120 --> 00:02:09,240 Speaker 1: to invest in solar because it's the future, and we 41 00:02:09,320 --> 00:02:13,720 Speaker 1: still need to pay as much as is necessary to 42 00:02:13,800 --> 00:02:16,080 Speaker 1: get the oil that we that we have to run 43 00:02:16,120 --> 00:02:19,920 Speaker 1: our economy. Now, yeah, that's right. I think they're very 44 00:02:19,960 --> 00:02:23,320 Speaker 1: loosely competitive at the moment. Over time that will grow, 45 00:02:23,440 --> 00:02:27,040 Speaker 1: But right now almost no oil is used in the 46 00:02:27,120 --> 00:02:31,760 Speaker 1: power sector, a very tiny amount. And so basically the 47 00:02:31,760 --> 00:02:35,440 Speaker 1: the extrapolation to how you think about them maybe competing 48 00:02:35,480 --> 00:02:40,960 Speaker 1: would be as electric vehicles. Uh it penetration grows through time, 49 00:02:41,440 --> 00:02:46,040 Speaker 1: perhaps you'll have more e vs being charged with grid resources, 50 00:02:46,080 --> 00:02:48,960 Speaker 1: including solar, and therefore you get a little bit more competition. 51 00:02:49,000 --> 00:02:52,960 Speaker 1: But that's that's the longer future. That's really very marginal 52 00:02:53,000 --> 00:02:54,680 Speaker 1: in the here and now. You know. I was talking 53 00:02:54,720 --> 00:02:58,920 Speaker 1: to Ola Klennius this morning, the CEO of Mercedes Benz 54 00:02:59,440 --> 00:03:05,119 Speaker 1: and Um. One thing that's interesting is, uh, they are 55 00:03:05,160 --> 00:03:08,000 Speaker 1: in a big push to put electric charging stations at 56 00:03:08,000 --> 00:03:11,880 Speaker 1: gas stations all around the world, but gas station owners 57 00:03:11,919 --> 00:03:14,760 Speaker 1: are not. You know. I remember when we interviewed Ben 58 00:03:14,880 --> 00:03:16,680 Speaker 1: Van Burden from Shell and he's like, oh, yeah, we're 59 00:03:16,720 --> 00:03:19,239 Speaker 1: doing it. It's just hard. It's like expensive and we 60 00:03:19,360 --> 00:03:22,200 Speaker 1: gotta find the time and it's on the schedule somewhere. 61 00:03:22,240 --> 00:03:24,720 Speaker 1: But come on, give me a break. You know that 62 00:03:24,800 --> 00:03:26,680 Speaker 1: they don't want to do it, Otherwise it would be 63 00:03:26,680 --> 00:03:29,600 Speaker 1: done already. Why why aren't there electric charging stations at 64 00:03:29,639 --> 00:03:33,080 Speaker 1: every single gas station? Uh, you know in the Western hemisphere. 65 00:03:33,720 --> 00:03:36,520 Speaker 1: I think folks are frankly still trying to figure out 66 00:03:36,560 --> 00:03:40,880 Speaker 1: the business model. When you look at a company like Tesla, 67 00:03:41,000 --> 00:03:44,160 Speaker 1: you've got the supercharger network, and there really just isn't 68 00:03:44,280 --> 00:03:48,160 Speaker 1: an equivalent that has been built out for any of 69 00:03:48,200 --> 00:03:51,160 Speaker 1: the other O E M s. They're essentially relying on 70 00:03:51,200 --> 00:03:54,000 Speaker 1: those traditional businesses, and I think there's a lot of 71 00:03:54,040 --> 00:03:57,240 Speaker 1: finger pointing going on, you know where You've got the 72 00:03:57,360 --> 00:04:00,440 Speaker 1: utilities who are wanting to dab away it. I mean, 73 00:04:00,600 --> 00:04:04,240 Speaker 1: I mean the electric utilities, but you've also got the 74 00:04:04,280 --> 00:04:09,480 Speaker 1: traditional fuel retailers who are also experimenting with it, and 75 00:04:09,520 --> 00:04:13,480 Speaker 1: it doesn't really seem like anyone's found the right formula 76 00:04:13,600 --> 00:04:16,880 Speaker 1: for how to make money at it. And I think 77 00:04:16,920 --> 00:04:19,280 Speaker 1: that's why you see some of the reticence there. Yeah, 78 00:04:19,440 --> 00:04:23,680 Speaker 1: I mean, I can't drive five minutes without seeing a 79 00:04:23,720 --> 00:04:26,920 Speaker 1: gas station. That's good when I'm driving six point two 80 00:04:26,960 --> 00:04:31,320 Speaker 1: leader V eight. But the thing is, there's these huge 81 00:04:31,360 --> 00:04:34,159 Speaker 1: networks of those everywhere, and if they could make the 82 00:04:34,200 --> 00:04:37,640 Speaker 1: same marginal electricity that they could make selling you know, 83 00:04:38,120 --> 00:04:42,719 Speaker 1: premium unladed gasoline, they would definitely already have installed them. 84 00:04:43,080 --> 00:04:44,760 Speaker 1: But I but I think that that's this is a 85 00:04:44,800 --> 00:04:48,320 Speaker 1: business model question. It's not something to lose sleepover. In fact, 86 00:04:48,480 --> 00:04:52,920 Speaker 1: I think fuel retailers typically have pretty slim margins on 87 00:04:52,960 --> 00:04:55,760 Speaker 1: the fuel. They make their money when you pop into 88 00:04:55,760 --> 00:04:58,400 Speaker 1: buy the candy bar or the soda to go with it, 89 00:04:58,480 --> 00:05:01,279 Speaker 1: and so there's no reason that you can't have that 90 00:05:01,880 --> 00:05:05,560 Speaker 1: with an electric vehicle as well. And you know, I 91 00:05:05,600 --> 00:05:08,320 Speaker 1: think through time these things will sort themselves out. I'd 92 00:05:08,360 --> 00:05:11,880 Speaker 1: also say most electric vehicle charging probably gonna be done 93 00:05:11,880 --> 00:05:14,800 Speaker 1: at home. You know, you you certainly need lots of 94 00:05:14,839 --> 00:05:18,400 Speaker 1: electric vehicle charging for the long haul trip you know 95 00:05:18,440 --> 00:05:22,880 Speaker 1: that you would take occasionally, but you're daily charging is 96 00:05:22,920 --> 00:05:25,400 Speaker 1: probably at your garage unless you live in a city. 97 00:05:25,440 --> 00:05:28,680 Speaker 1: Cities are the hard part of the problem. Rob twenty seconds. 98 00:05:28,680 --> 00:05:30,679 Speaker 1: How tough is the winter going to be in Europe? 99 00:05:30,680 --> 00:05:33,880 Speaker 1: You're based in London. You know this winter looks okay. 100 00:05:34,400 --> 00:05:36,279 Speaker 1: We're in a bit of a cold snap right now 101 00:05:36,640 --> 00:05:40,680 Speaker 1: and that's pressuring the gas market and power markets. But 102 00:05:41,520 --> 00:05:44,279 Speaker 1: the general view is that we've got enough gas to 103 00:05:44,279 --> 00:05:46,760 Speaker 1: get through this winter. Next winter might be a little 104 00:05:46,800 --> 00:05:49,920 Speaker 1: bit more challenging. Actually, all right, good stuff. Rob Barnett, 105 00:05:49,960 --> 00:05:52,840 Speaker 1: Senior analyst. Uh. He leads our team of energy research 106 00:05:52,880 --> 00:05:56,520 Speaker 1: folks over in London for Bloomberg Intelligence. I gotta see 107 00:05:56,520 --> 00:05:59,080 Speaker 1: this haircut. Oh yeah, you gotta go check it. It's awesome. 108 00:05:59,120 --> 00:06:01,800 Speaker 1: He's out there. Uh. And he is super smart on 109 00:06:01,839 --> 00:06:05,520 Speaker 1: all that energy stuff, including the policy of energy policy 110 00:06:05,560 --> 00:06:08,520 Speaker 1: and the regulation of the energy space. Or fortune to 111 00:06:08,520 --> 00:06:11,880 Speaker 1: have him at Bloomberg Intelligence again, b I go to 112 00:06:11,960 --> 00:06:17,080 Speaker 1: get some of the best research on Wall Street. We 113 00:06:17,160 --> 00:06:20,159 Speaker 1: had some ECO data today. We had the pp I 114 00:06:20,360 --> 00:06:23,520 Speaker 1: coming in hot, and then we had the you missed 115 00:06:23,600 --> 00:06:27,120 Speaker 1: data coming in right after that. If you type in eco, 116 00:06:27,200 --> 00:06:30,480 Speaker 1: go on your Bloomberg or week ago the University of 117 00:06:30,520 --> 00:06:33,520 Speaker 1: Michigan w E c O CO is a great way 118 00:06:33,560 --> 00:06:35,680 Speaker 1: to do it. Uh. And then you can pick out 119 00:06:36,320 --> 00:06:39,320 Speaker 1: by flag um the country for the flag which you 120 00:06:39,320 --> 00:06:42,359 Speaker 1: want to see the data anyway you missed. Uh. Current 121 00:06:42,400 --> 00:06:48,000 Speaker 1: conditions stronger than expected, Sentiments stronger than expected. So um, 122 00:06:48,160 --> 00:06:51,359 Speaker 1: inflation is hot, but so are expectations. Let's bring in 123 00:06:51,800 --> 00:06:55,320 Speaker 1: a Nika Anika treon Um. She is the chief economist 124 00:06:55,480 --> 00:06:58,400 Speaker 1: for Van Lanchet Kat kempin to talk about what this 125 00:06:58,480 --> 00:07:00,880 Speaker 1: data means to us. Annika, thanks much for joining us. 126 00:07:01,720 --> 00:07:03,680 Speaker 1: What do you think first about inflation? I mean, do 127 00:07:03,720 --> 00:07:07,480 Speaker 1: we all agree that inflation looks like it's coming down 128 00:07:07,800 --> 00:07:11,240 Speaker 1: and the FED has to some extent got this under control. Yeah, well, 129 00:07:11,280 --> 00:07:13,040 Speaker 1: I think the point is and this is also why 130 00:07:13,080 --> 00:07:15,360 Speaker 1: markets have had a good time since the second half 131 00:07:15,360 --> 00:07:17,720 Speaker 1: of ox sober. I think one thing we know for 132 00:07:17,760 --> 00:07:20,920 Speaker 1: sure is that we've surpassed the peak in terms of 133 00:07:21,160 --> 00:07:24,200 Speaker 1: rates of increase of prices. So in terms of you 134 00:07:24,240 --> 00:07:27,440 Speaker 1: know that the incremental increases in inflation, if not actually 135 00:07:27,440 --> 00:07:30,320 Speaker 1: the fact inflation inflation of peaks, and the same goes 136 00:07:30,360 --> 00:07:32,560 Speaker 1: from an interest rate perspective. And I think the one 137 00:07:32,560 --> 00:07:34,920 Speaker 1: thing there's a lot of said bashing that's been going 138 00:07:34,920 --> 00:07:37,920 Speaker 1: on because they've simply reacted to late etcetera. But the 139 00:07:38,000 --> 00:07:40,000 Speaker 1: one thing that the Fed does seem to have under 140 00:07:40,000 --> 00:07:44,400 Speaker 1: control is an anchoring of the long term inflation expectation 141 00:07:44,480 --> 00:07:48,640 Speaker 1: and that's very, very important for the market. And one 142 00:07:48,640 --> 00:07:51,440 Speaker 1: of the other issues is in addition to inflation, and 143 00:07:51,480 --> 00:07:54,720 Speaker 1: again we'll get some CPI data next week, is kind 144 00:07:54,720 --> 00:07:57,800 Speaker 1: of recession outlooks. I wonder from your perspective where you 145 00:07:57,840 --> 00:08:01,679 Speaker 1: sit as you think that maybe European economic growth, US 146 00:08:01,760 --> 00:08:07,040 Speaker 1: economic growth, what's your recession call. Yeah, I mean it 147 00:08:07,080 --> 00:08:09,960 Speaker 1: looks like, you know, economic contractions are inevitable. I think 148 00:08:10,000 --> 00:08:12,160 Speaker 1: it's more of a question of how long, how deep, 149 00:08:12,200 --> 00:08:15,920 Speaker 1: how painful, exactly when, And quite frankly, that's that's more 150 00:08:15,920 --> 00:08:17,800 Speaker 1: of an art than a science because it's very, very 151 00:08:17,800 --> 00:08:20,600 Speaker 1: hard to predict those factors. Clearly, Europe is in for 152 00:08:20,640 --> 00:08:22,560 Speaker 1: a much type of time than the US, given that 153 00:08:23,040 --> 00:08:25,760 Speaker 1: the general strength of the US economy of the European 154 00:08:25,760 --> 00:08:28,000 Speaker 1: economy is clearly a laggered. I mean, let's remember that 155 00:08:28,080 --> 00:08:31,040 Speaker 1: pre COVID, you know, Europe would actually it was almost 156 00:08:31,040 --> 00:08:33,840 Speaker 1: setting into a recession anyway in this big pandemic. Rescue 157 00:08:33,840 --> 00:08:36,880 Speaker 1: plan was very uplifting for Europe, but that was obviously 158 00:08:37,400 --> 00:08:40,800 Speaker 1: a short lived rescue plan by definition. So I think 159 00:08:40,800 --> 00:08:43,480 Speaker 1: that's that's the point. I think that means that, you know, 160 00:08:43,559 --> 00:08:46,800 Speaker 1: with a higher rate environment, which makes economic conditions tougher, 161 00:08:46,960 --> 00:08:49,040 Speaker 1: what we have to do to spend more time on 162 00:08:49,200 --> 00:08:52,720 Speaker 1: is trying to figure out the calculations as to what 163 00:08:53,000 --> 00:08:56,760 Speaker 1: exact impact on the real economy of these interest rates 164 00:08:56,840 --> 00:08:59,720 Speaker 1: having and because they've gone up so quickly. I think 165 00:08:59,720 --> 00:09:02,960 Speaker 1: we saw comes to get to make those calculations in 166 00:09:03,080 --> 00:09:06,880 Speaker 1: terms of the China reopening. Um does that play into 167 00:09:06,880 --> 00:09:10,640 Speaker 1: your calculus of global growth? It seemed like, you know, 168 00:09:10,800 --> 00:09:13,480 Speaker 1: we were all hoping for it for so long, and 169 00:09:13,640 --> 00:09:16,400 Speaker 1: it seemed like we thought that would underpin a huge 170 00:09:16,440 --> 00:09:22,200 Speaker 1: jump in demand, but that hasn't played out in market pricing. Yeahman, 171 00:09:22,240 --> 00:09:23,680 Speaker 1: I guess that The point is that the path of 172 00:09:23,720 --> 00:09:26,920 Speaker 1: reopening for China is not that straightforward because obviously the 173 00:09:27,080 --> 00:09:29,880 Speaker 1: zero COVID policy has lasted much longer than many people 174 00:09:29,880 --> 00:09:33,040 Speaker 1: had expected, and the reopening is certainly with hiccup. So 175 00:09:33,040 --> 00:09:35,040 Speaker 1: that's not a simple straight line that you can just 176 00:09:35,440 --> 00:09:37,040 Speaker 1: you know, open the lid of the box and then 177 00:09:37,080 --> 00:09:40,960 Speaker 1: bam comes this explosion of demands. But that clearly that 178 00:09:41,040 --> 00:09:43,520 Speaker 1: clearly will be a supporting factor. You could argue that 179 00:09:43,520 --> 00:09:46,160 Speaker 1: that could also be you know, a reopening story could 180 00:09:46,200 --> 00:09:49,960 Speaker 1: also be dangerous from an inflationary perspective, because quite frankly, 181 00:09:50,000 --> 00:09:53,040 Speaker 1: we've had an inflation problem without one of the world's 182 00:09:53,120 --> 00:09:57,520 Speaker 1: largest drivers of demand really participating in the economy. So 183 00:09:57,600 --> 00:10:00,360 Speaker 1: what will happen to energy prices once that gets go again. 184 00:10:00,440 --> 00:10:03,360 Speaker 1: On the other hand, that also alleviates and supply chains. 185 00:10:03,360 --> 00:10:05,280 Speaker 1: So it's it's it's it's something that we have to 186 00:10:05,320 --> 00:10:09,560 Speaker 1: work our way through. So Anaka, you know, I'd love 187 00:10:09,559 --> 00:10:12,840 Speaker 1: to get a sense of just kind of where you 188 00:10:12,920 --> 00:10:16,760 Speaker 1: think the federal Reserve needs to be. Um, you know, 189 00:10:16,800 --> 00:10:18,839 Speaker 1: I think you know, again, we're getting some inflation data 190 00:10:19,640 --> 00:10:22,720 Speaker 1: that is, you know, as you suggested earlier, show signs 191 00:10:22,760 --> 00:10:24,599 Speaker 1: that it has peaked at maybe the peaks in a 192 00:10:24,679 --> 00:10:26,480 Speaker 1: rear view mirror, but it's still there. How do you 193 00:10:27,120 --> 00:10:31,160 Speaker 1: in this policy is supposed to have what coming show 194 00:10:31,200 --> 00:10:34,200 Speaker 1: its effects three to five quarters from now? Yeah, exactly, 195 00:10:34,240 --> 00:10:36,040 Speaker 1: So what do you think the feds are gonna do? Anika? 196 00:10:37,600 --> 00:10:39,040 Speaker 1: I think the point that you just made is a 197 00:10:39,040 --> 00:10:42,440 Speaker 1: really valid one. So because the world is of volatile 198 00:10:42,440 --> 00:10:45,240 Speaker 1: things are changing so fast, were forgetting some of the mechanics. 199 00:10:45,240 --> 00:10:49,120 Speaker 1: And to your point, there's a seriously significant time lag 200 00:10:49,559 --> 00:10:53,120 Speaker 1: between third policy action and how the real economy should 201 00:10:53,120 --> 00:10:55,319 Speaker 1: react to that. It's not as if you know, seventy 202 00:10:55,320 --> 00:10:59,559 Speaker 1: five basis points lifts should suddenly impact next month's inflation reading. 203 00:10:59,559 --> 00:11:02,800 Speaker 1: That's not our real life works. And I think taking 204 00:11:02,880 --> 00:11:06,800 Speaker 1: that into accounts, the danger is that you're working off 205 00:11:07,400 --> 00:11:10,360 Speaker 1: the FED is working off a signal board which is 206 00:11:10,400 --> 00:11:14,599 Speaker 1: of actual data versus predicted data. I either FED is 207 00:11:14,720 --> 00:11:18,440 Speaker 1: reacting by definition late to the game, and I think 208 00:11:18,440 --> 00:11:20,400 Speaker 1: the FED has had no choice but to do this 209 00:11:20,480 --> 00:11:22,880 Speaker 1: and to continue to do this, because the biggest issue 210 00:11:22,880 --> 00:11:26,200 Speaker 1: that said had was the credibility issue. And if markets 211 00:11:26,240 --> 00:11:29,640 Speaker 1: don't believe that our central banks can manage inflation, we've 212 00:11:29,640 --> 00:11:32,040 Speaker 1: got a bigger problem to deal with. And that's why 213 00:11:32,080 --> 00:11:35,320 Speaker 1: the fact that long term inflation expectations have been anchored 214 00:11:35,720 --> 00:11:38,640 Speaker 1: thus far is very, very important, and that's why the 215 00:11:38,720 --> 00:11:41,719 Speaker 1: FED will probably rather go on for a little bit 216 00:11:41,720 --> 00:11:44,120 Speaker 1: longer in order to make sure they can maintain that. 217 00:11:45,080 --> 00:11:48,080 Speaker 1: But why go on for I mean, do we really 218 00:11:48,080 --> 00:11:53,440 Speaker 1: need another hudder basis points of tightening at this point? Well, 219 00:11:53,440 --> 00:11:55,760 Speaker 1: I think I think it would be a delicate balancing acts. 220 00:11:55,800 --> 00:11:57,520 Speaker 1: On one hand, you know, to your point, if you 221 00:11:57,600 --> 00:12:00,760 Speaker 1: keep tightening away, you're you're triggering aid into the market 222 00:12:00,760 --> 00:12:02,640 Speaker 1: that's going to take a very long time to correct, 223 00:12:02,720 --> 00:12:05,760 Speaker 1: and why inflict that level of paint. On the other hand, 224 00:12:05,840 --> 00:12:10,640 Speaker 1: the risk of pivoting too quickly and therefore unhinging that 225 00:12:10,760 --> 00:12:15,040 Speaker 1: anchoring of long termslation expectations can be even more dangerous 226 00:12:15,120 --> 00:12:17,360 Speaker 1: because the risk of then having to do a U 227 00:12:17,400 --> 00:12:20,760 Speaker 1: turn because the next semplation reading is actually higher than expected, 228 00:12:20,840 --> 00:12:23,120 Speaker 1: because I don't know, the China reopening has said to 229 00:12:23,120 --> 00:12:26,840 Speaker 1: a bigger certain demandment expected um that couldn't actually end 230 00:12:26,880 --> 00:12:29,880 Speaker 1: up inflicting more danger into the economy. So I think 231 00:12:29,880 --> 00:12:34,480 Speaker 1: it's this awkward, delicate balance, which means probably the FED 232 00:12:34,520 --> 00:12:36,120 Speaker 1: will probably go on a little bit longer than the 233 00:12:36,160 --> 00:12:38,840 Speaker 1: market might expect. The FED pivot might be a little 234 00:12:38,880 --> 00:12:41,360 Speaker 1: bit further out there than people expect. But at a 235 00:12:41,400 --> 00:12:43,880 Speaker 1: certain point, of course, you know, the rate of change 236 00:12:44,120 --> 00:12:46,160 Speaker 1: we've passed that we've passed the peak of the rate 237 00:12:46,200 --> 00:12:52,800 Speaker 1: of increase of rates, that's for sure. Anka, I understand 238 00:12:52,840 --> 00:12:57,160 Speaker 1: that you're based in Amsterdam, Is that right? Yes? Okay, 239 00:12:57,400 --> 00:13:00,840 Speaker 1: So give us the feeling you know on the ground, 240 00:13:01,240 --> 00:13:05,640 Speaker 1: how are consumers, how are companies thinking about kind of 241 00:13:05,640 --> 00:13:09,240 Speaker 1: the war in Ukraine, a tough winter ahead in terms 242 00:13:09,240 --> 00:13:12,559 Speaker 1: of energy, what's the what's what's the feeling across your 243 00:13:13,400 --> 00:13:17,760 Speaker 1: based upon kind of the folks that you interact with. Yeah, well, 244 00:13:17,800 --> 00:13:20,280 Speaker 1: the sentiment has sort of turned again with regards to energy, 245 00:13:20,320 --> 00:13:24,000 Speaker 1: because obviously we've all had a relatively benign winter and 246 00:13:24,040 --> 00:13:26,760 Speaker 1: all those sort of you know, scary stories as too, well, 247 00:13:26,800 --> 00:13:28,680 Speaker 1: we've got reserves of energy, but is that going to 248 00:13:28,720 --> 00:13:32,080 Speaker 1: be sufficient? So far, so good until the last couple 249 00:13:32,080 --> 00:13:34,880 Speaker 1: of weeks, right, and now we see, you know, temperatures 250 00:13:34,880 --> 00:13:37,280 Speaker 1: going into minus. It was minus this morning, for example. 251 00:13:37,640 --> 00:13:40,120 Speaker 1: People are waking up and realizing, Okay, I've managed my 252 00:13:40,200 --> 00:13:42,200 Speaker 1: energy bill at home thus far because it's not been 253 00:13:42,240 --> 00:13:45,959 Speaker 1: that cold outside. But while the temperatures dropped, so there's 254 00:13:46,000 --> 00:13:48,680 Speaker 1: definitely nervousness around there. You know, You've have you know, 255 00:13:48,720 --> 00:13:52,600 Speaker 1: some of the local the largest energy suppliers literally pointing 256 00:13:52,600 --> 00:13:55,480 Speaker 1: out to the fact that there's huge percentage of their 257 00:13:55,559 --> 00:13:57,920 Speaker 1: client base who are likely to go through cash flow 258 00:13:58,000 --> 00:14:01,400 Speaker 1: problems from a family perspective, I mean, you have staters 259 00:14:01,480 --> 00:14:04,880 Speaker 1: that are entering the economy into their job market who says, all, 260 00:14:04,920 --> 00:14:07,320 Speaker 1: my energy bill is not that different to my rental 261 00:14:07,520 --> 00:14:10,280 Speaker 1: price of my apartment. So especially for the low energy 262 00:14:10,320 --> 00:14:14,320 Speaker 1: label building, so it's it's it's scary, it's it's complicated. 263 00:14:14,360 --> 00:14:17,480 Speaker 1: Having said that, you've got this sort of juxtaposition I 264 00:14:17,480 --> 00:14:20,320 Speaker 1: think in many in many countries, in many cities where 265 00:14:20,880 --> 00:14:22,960 Speaker 1: you've got all of those concerns and you know, recession 266 00:14:23,000 --> 00:14:26,160 Speaker 1: seems inevitable in Europe and obviously the gas sights, etcetera. 267 00:14:26,520 --> 00:14:28,040 Speaker 1: On the other hand, try and book a restaurant on 268 00:14:28,040 --> 00:14:30,360 Speaker 1: a Friday night, it's pass by in book on all 269 00:14:30,400 --> 00:14:34,240 Speaker 1: the days yourself, it's fully books. So it's this bizarre juxtaposition. 270 00:14:35,040 --> 00:14:38,480 Speaker 1: So Taylor Swift tickets exactly. I'm not sure if you're 271 00:14:38,640 --> 00:14:42,000 Speaker 1: a football fan, but the Netherlands has a football match 272 00:14:42,680 --> 00:14:44,640 Speaker 1: he means soccer in a few hours, and I'm going 273 00:14:44,640 --> 00:14:47,080 Speaker 1: with the football cause I'm speaking with a European Netherlands 274 00:14:47,080 --> 00:14:51,680 Speaker 1: against Argentine. What's the feeling within Amsterdam on the street today? 275 00:14:51,840 --> 00:14:55,080 Speaker 1: How hyped up is the average you know, Dutch fan? 276 00:14:55,680 --> 00:14:58,360 Speaker 1: Very hyped up? I mean this is this is, this 277 00:14:58,400 --> 00:14:59,960 Speaker 1: is a very big thing for the Dutch will be 278 00:15:00,040 --> 00:15:03,520 Speaker 1: orange clofted everywhere and very excited. See I told you 279 00:15:03,560 --> 00:15:07,440 Speaker 1: that Dutch, I mean, id they love and it's such 280 00:15:07,440 --> 00:15:10,080 Speaker 1: a small cuntry but they produced so many good soccer players. 281 00:15:10,120 --> 00:15:11,760 Speaker 1: I don't know how they do it, but it was 282 00:15:11,840 --> 00:15:14,080 Speaker 1: my pick is my pick in this year's World Cup. 283 00:15:14,240 --> 00:15:16,040 Speaker 1: So I'm looking pretty good here. But we'll see, Argentina 284 00:15:16,080 --> 00:15:19,080 Speaker 1: is gonna be toughly destroyed. The US Yeah, the only 285 00:15:19,120 --> 00:15:21,560 Speaker 1: goal we scored against them looked like it was an accident. 286 00:15:21,800 --> 00:15:24,480 Speaker 1: Kind of well, I don't know. We're coming up there 287 00:15:24,560 --> 00:15:28,320 Speaker 1: on a trey on Chief Economist International, Van launch Shot Kempen, 288 00:15:28,680 --> 00:15:33,720 Speaker 1: based in Amsterdam. Let's talk to Vince Sagnarella. He does 289 00:15:33,760 --> 00:15:35,920 Speaker 1: that market stuff for us. He's a market strategist. He 290 00:15:36,000 --> 00:15:38,120 Speaker 1: spent years on the street trading all kinds of things. 291 00:15:38,720 --> 00:15:40,960 Speaker 1: We don't really want to ask too many questions about that, 292 00:15:41,000 --> 00:15:44,360 Speaker 1: but he's with us now, Vince Sagnarella. Vince, you get 293 00:15:44,360 --> 00:15:48,200 Speaker 1: the inflation print today? UM, I guess that gives the 294 00:15:48,680 --> 00:15:52,120 Speaker 1: Fed some room to continue to be hawk is here. 295 00:15:52,240 --> 00:15:55,600 Speaker 1: What was your take? I don't think so. Actually, it's 296 00:15:55,640 --> 00:15:57,720 Speaker 1: just one number. It's p p I. I put a 297 00:15:57,760 --> 00:16:00,240 Speaker 1: little bit more weight on cp I next week, which 298 00:16:00,280 --> 00:16:02,880 Speaker 1: is expected to moderate if that comes in hot again. 299 00:16:03,000 --> 00:16:05,680 Speaker 1: I think the FEDS still sits um sits where they 300 00:16:05,680 --> 00:16:09,440 Speaker 1: are with fifty basis points next week. UH, potentially fifty 301 00:16:09,440 --> 00:16:13,040 Speaker 1: basis points in February. But as the data I'm looking 302 00:16:13,080 --> 00:16:15,560 Speaker 1: at and a couple of people out and talking to, UH, 303 00:16:15,640 --> 00:16:20,120 Speaker 1: the expectations come January. Buddy of my in South Bay 304 00:16:20,160 --> 00:16:24,520 Speaker 1: Research out in San Francisco, sees jobless claims jumping in 305 00:16:24,680 --> 00:16:30,160 Speaker 1: late January, and that uptick will pull in UH forecasts 306 00:16:30,440 --> 00:16:33,240 Speaker 1: for rate cuts next year. So if he's right and 307 00:16:33,280 --> 00:16:38,040 Speaker 1: we get a jobless claims going higher from now into January, 308 00:16:38,120 --> 00:16:40,960 Speaker 1: that is the feds. Uh, that's what the FEDS watching 309 00:16:41,000 --> 00:16:44,520 Speaker 1: these days. Jobs. I mean, what, how can you claim 310 00:16:44,640 --> 00:16:48,840 Speaker 1: joblessness when there's over ten million job openings out there. Well, 311 00:16:48,880 --> 00:16:51,640 Speaker 1: the point, the point that he makes, and I probably 312 00:16:51,680 --> 00:16:53,720 Speaker 1: would argue the same thing, is that you know, as 313 00:16:53,720 --> 00:16:57,160 Speaker 1: you're heading into a downturn, which is largely predicted, UH, 314 00:16:57,360 --> 00:17:01,000 Speaker 1: employers stop hiring and then that's followed by layoffs. And 315 00:17:01,040 --> 00:17:03,160 Speaker 1: while there's a delay in white college jobs, which are 316 00:17:03,200 --> 00:17:07,800 Speaker 1: obviously the higher paying jobs, uh, they then surge in 317 00:17:07,960 --> 00:17:11,600 Speaker 1: layoffs going into that. So if that trend holds, come 318 00:17:11,840 --> 00:17:13,960 Speaker 1: you know, the middle of the first quarter next year, 319 00:17:14,080 --> 00:17:16,360 Speaker 1: maybe the end of the first quarter next year, we're 320 00:17:16,359 --> 00:17:18,720 Speaker 1: going to see a situation where there won't be that 321 00:17:18,800 --> 00:17:22,639 Speaker 1: many job openings available, or if there are job openings, 322 00:17:22,920 --> 00:17:26,720 Speaker 1: they're probably jobs people don't want them. Let's see, we 323 00:17:26,760 --> 00:17:30,080 Speaker 1: need talk to traders, Vince out there, how concerned are 324 00:17:30,119 --> 00:17:33,080 Speaker 1: they about a recession? And there's a lot of everybody's 325 00:17:33,119 --> 00:17:35,440 Speaker 1: talking about it, everybody is calling for it. But boy, 326 00:17:35,480 --> 00:17:37,840 Speaker 1: the consumers still strong out there. The consumer still has 327 00:17:37,880 --> 00:17:40,760 Speaker 1: a job kind of I don't know, what are you 328 00:17:40,800 --> 00:17:43,320 Speaker 1: what are you hearing? Well? I mean the the ideas. 329 00:17:43,359 --> 00:17:45,240 Speaker 1: I mean, everybody thinks there's going to be a recession, 330 00:17:45,280 --> 00:17:46,879 Speaker 1: most of the folks I talked to, But from a 331 00:17:46,880 --> 00:17:50,400 Speaker 1: trader standpoint, whether it's a soft landing or whether it's 332 00:17:50,440 --> 00:17:53,520 Speaker 1: a severe downturn, that they can't predict that, so they 333 00:17:53,520 --> 00:17:56,040 Speaker 1: don't actually price for it. That del price for that 334 00:17:56,040 --> 00:18:00,080 Speaker 1: when it comes. UM. So we could see if we 335 00:18:00,119 --> 00:18:03,400 Speaker 1: have a mile downturn, a nice bid going into risk 336 00:18:03,480 --> 00:18:06,280 Speaker 1: next year. Obviously the opposite is true if we get 337 00:18:06,280 --> 00:18:09,680 Speaker 1: a severe downturn UM. But you know, what they are 338 00:18:09,760 --> 00:18:14,720 Speaker 1: talking about is essentially the feel that we're nearing a bottom, 339 00:18:14,840 --> 00:18:17,840 Speaker 1: that feel that we're nearing a top in rates. UH 340 00:18:18,000 --> 00:18:20,280 Speaker 1: take a page out of the Bank Accounada's book this 341 00:18:20,320 --> 00:18:24,359 Speaker 1: week where they rose, uh rose, where they raised rates 342 00:18:24,800 --> 00:18:27,919 Speaker 1: and and then basically said we're nearing a pause. That 343 00:18:28,040 --> 00:18:31,520 Speaker 1: they've done U, that their work has done its job 344 00:18:31,640 --> 00:18:34,560 Speaker 1: on the economy. And a lot of a lot of 345 00:18:34,560 --> 00:18:36,359 Speaker 1: traders here in the States think that we're going to 346 00:18:36,440 --> 00:18:39,200 Speaker 1: see something similar to that coming from the set. If 347 00:18:39,200 --> 00:18:42,160 Speaker 1: it doesn't come next week, they'll expect that they expected 348 00:18:42,240 --> 00:18:45,919 Speaker 1: to come early next year. Surely they're doing Surely this 349 00:18:46,000 --> 00:18:48,479 Speaker 1: is the first of two fifty basis point hikes. Right, 350 00:18:49,640 --> 00:18:52,560 Speaker 1: No guarantees of February. I mean next week I think 351 00:18:52,640 --> 00:18:56,680 Speaker 1: is in stone, but I think February. Um, we'll watch 352 00:18:56,720 --> 00:18:59,240 Speaker 1: the data and and see where it goes. I mean, 353 00:18:59,600 --> 00:19:01,439 Speaker 1: you know, we're starting to see some things and this 354 00:19:01,480 --> 00:19:04,760 Speaker 1: is in your wheelhouse. Um, use car prices are coming down, 355 00:19:05,240 --> 00:19:08,760 Speaker 1: but um, new car prices have searched, so you're gonna 356 00:19:08,840 --> 00:19:11,480 Speaker 1: see a switch and consumer spending. You know, when when 357 00:19:11,560 --> 00:19:14,960 Speaker 1: beef prices go up, people buy more chicken. When new 358 00:19:15,080 --> 00:19:17,679 Speaker 1: car prices go up, people probably go back to use 359 00:19:17,800 --> 00:19:21,920 Speaker 1: cars or even uh just delay a car purchase if 360 00:19:22,000 --> 00:19:26,320 Speaker 1: they can. So those kind of things from an inflation standpoint, 361 00:19:26,320 --> 00:19:29,040 Speaker 1: when they're way through the economy and take some pressure 362 00:19:29,040 --> 00:19:31,480 Speaker 1: off the inflation scenario. You know who says we won't 363 00:19:31,560 --> 00:19:37,080 Speaker 1: have a recession. Treasury Secretary Janny Ellen. She says the 364 00:19:37,200 --> 00:19:40,919 Speaker 1: US is going to avoid a recession, talking you know 365 00:19:41,400 --> 00:19:43,280 Speaker 1: it would. When was the last time, Vince, you heard 366 00:19:43,280 --> 00:19:46,280 Speaker 1: a Treasury Secretary say we're definitely going into a recession 367 00:19:46,280 --> 00:19:50,240 Speaker 1: next year. Well, I mean talking about talking to your book, 368 00:19:50,240 --> 00:19:53,000 Speaker 1: as a trader would say, I mean, she's she's got 369 00:19:53,000 --> 00:19:55,160 Speaker 1: to be you know, she she's in the Biden camp. 370 00:19:55,200 --> 00:19:58,920 Speaker 1: She has to speak to speak um and and frankly, 371 00:19:59,160 --> 00:20:01,520 Speaker 1: I wonder what it's like to go from you know, 372 00:20:01,560 --> 00:20:06,960 Speaker 1: an academic, uh, you know, an economist too well as 373 00:20:07,040 --> 00:20:09,520 Speaker 1: as the FED chair. She already had a taste of it, 374 00:20:09,560 --> 00:20:12,560 Speaker 1: but really to to to be a politician, you're just 375 00:20:12,640 --> 00:20:16,719 Speaker 1: throwing away all of that data based scientific, you know, 376 00:20:17,200 --> 00:20:21,560 Speaker 1: uh stuff and and going completely to um, you know, 377 00:20:21,600 --> 00:20:25,080 Speaker 1: talking your book. It's gotta be weird. I mean, give 378 00:20:25,160 --> 00:20:27,080 Speaker 1: it to this way the way traders look at it. 379 00:20:27,080 --> 00:20:29,560 Speaker 1: When she was the chair of the FED, she was 380 00:20:29,680 --> 00:20:33,080 Speaker 1: listened to and respected. As the Treasury secretary, no one 381 00:20:33,119 --> 00:20:36,320 Speaker 1: trades on what she says saying because they know that, 382 00:20:36,600 --> 00:20:38,640 Speaker 1: you know, she's saying what she has to say rather 383 00:20:38,680 --> 00:20:40,520 Speaker 1: than what she wants to say. And there was a 384 00:20:40,520 --> 00:20:42,880 Speaker 1: time when she was in the closet for a long time, 385 00:20:42,920 --> 00:20:45,720 Speaker 1: and it's probably because she disagreed with the administration, and 386 00:20:46,080 --> 00:20:48,360 Speaker 1: so they just kept her off the tape because they 387 00:20:48,480 --> 00:20:50,960 Speaker 1: didn't want her to say anything that was that was 388 00:20:51,359 --> 00:20:54,719 Speaker 1: contrary to what the picture they wanted to paint. All right, 389 00:20:54,760 --> 00:20:56,600 Speaker 1: So if I'm a trader here for the rest of 390 00:20:56,680 --> 00:20:58,920 Speaker 1: today and going into next week, do I just wait 391 00:20:58,960 --> 00:21:01,000 Speaker 1: on the CPI datas at the next data point and 392 00:21:01,000 --> 00:21:04,640 Speaker 1: then of course the FED meeting on Wednesday. Yeah, I mean, 393 00:21:05,160 --> 00:21:06,960 Speaker 1: you know, whatever you're seeing today and p p I 394 00:21:07,040 --> 00:21:09,760 Speaker 1: is and knee jerk reaction, Um, I wouldn't put a 395 00:21:09,760 --> 00:21:12,840 Speaker 1: lot of I wouldn't put a lot of credit it. Um. 396 00:21:12,880 --> 00:21:14,719 Speaker 1: You know, in fact, you know, big sell off might 397 00:21:14,760 --> 00:21:16,920 Speaker 1: be a buying opportunity going into c p I of 398 00:21:17,000 --> 00:21:21,439 Speaker 1: CPI moderates and Vince just on the dollar, still no 399 00:21:21,720 --> 00:21:24,600 Speaker 1: credible bear case out there for the US dollar has 400 00:21:24,600 --> 00:21:28,040 Speaker 1: come off a lot, has come off a lot. Well, 401 00:21:28,080 --> 00:21:29,960 Speaker 1: I mean, you know, you know what I've been saying, 402 00:21:30,000 --> 00:21:32,480 Speaker 1: it's it runs inverse to the SMP. So you know, 403 00:21:32,600 --> 00:21:36,920 Speaker 1: the day the Fed says, uh, we're pausing for a while, um, 404 00:21:37,040 --> 00:21:39,640 Speaker 1: and the SMP rallies, you'll see the dollar come off, 405 00:21:40,440 --> 00:21:43,760 Speaker 1: probably see a little steeper inversion until the Fed actually 406 00:21:43,800 --> 00:21:46,640 Speaker 1: does begin to cut. But when that day comes, you're 407 00:21:46,640 --> 00:21:48,840 Speaker 1: going to see a massive rally in the short end, 408 00:21:49,040 --> 00:21:51,600 Speaker 1: and the days of the strong dollar will be over 409 00:21:51,600 --> 00:21:58,040 Speaker 1: at least temporarily. Yeah, we were up at Yeah, we're right, Vince. 410 00:21:58,040 --> 00:22:00,239 Speaker 1: Do you look at the Bloomberg Dollar Index because is 411 00:22:00,640 --> 00:22:03,199 Speaker 1: you know, economists say it's a much better measure of 412 00:22:03,240 --> 00:22:06,240 Speaker 1: dollar strength. But I know that you know, traders probably 413 00:22:06,280 --> 00:22:10,080 Speaker 1: grew up with d x Y trainers y Bloomberg Dollar 414 00:22:10,119 --> 00:22:13,119 Speaker 1: Index is a better measure. As you know, they pretty 415 00:22:13,160 --> 00:22:15,920 Speaker 1: much carbon copied my Ball Street Journal dollar index, which 416 00:22:15,920 --> 00:22:21,080 Speaker 1: I created. Uh so I have I do sympathize with 417 00:22:21,080 --> 00:22:25,000 Speaker 1: the Bloomberg Dollar Index. It captures way more data. Um, 418 00:22:25,320 --> 00:22:27,960 Speaker 1: the Eyes Dollar index is pretty much a Euro dollar indexes. 419 00:22:28,440 --> 00:22:30,640 Speaker 1: All right, good stuff, we waited that way, all right, Vince, 420 00:22:30,640 --> 00:22:33,200 Speaker 1: thanks so much for joining us there from the confines 421 00:22:33,240 --> 00:22:38,280 Speaker 1: of Westchester, Vince Signorola, global macro strategist with Bloomberg News, 422 00:22:38,320 --> 00:22:40,960 Speaker 1: giving us his thoughts on in a way Marko, creator 423 00:22:40,960 --> 00:22:44,320 Speaker 1: of the Bloomberg Dollar Index by b d X Y index, Yep, 424 00:22:44,520 --> 00:22:46,719 Speaker 1: that's the one I use. Now, I've been told by 425 00:22:46,760 --> 00:22:52,160 Speaker 1: the people in the know and our c suite conversation 426 00:22:52,200 --> 00:22:56,080 Speaker 1: today we're gonna talk a little fintech company is n 427 00:22:56,400 --> 00:22:59,680 Speaker 1: Cino nastack symbols n C n O to type in 428 00:22:59,680 --> 00:23:01,960 Speaker 1: your blue be a professional tournament. The CEO and chairman 429 00:23:02,040 --> 00:23:04,960 Speaker 1: joins us, Pierre not a Pierre, thanks so much for 430 00:23:05,080 --> 00:23:08,119 Speaker 1: joining us here, uh and Sino. Tell us what you 431 00:23:08,160 --> 00:23:11,960 Speaker 1: guys are doing in the fintech space. Yes, good morning, 432 00:23:11,960 --> 00:23:15,160 Speaker 1: thanks for having me. We're doing three very important things 433 00:23:15,160 --> 00:23:18,800 Speaker 1: for banks, but it is highly compliance oriented and very 434 00:23:18,840 --> 00:23:22,199 Speaker 1: complex for them, which is we onboard new customers. We 435 00:23:22,280 --> 00:23:27,119 Speaker 1: originate every any loan from the most complex commercial and 436 00:23:27,200 --> 00:23:30,400 Speaker 1: all the way down to a simplistic personal loan un secured, 437 00:23:30,720 --> 00:23:33,840 Speaker 1: and we open accounts. Those things are complex from a 438 00:23:33,880 --> 00:23:37,919 Speaker 1: banking perspective, but should be very useless friendly and be 439 00:23:38,000 --> 00:23:40,280 Speaker 1: able mobile to do it on your phone, et cetera. 440 00:23:40,880 --> 00:23:43,119 Speaker 1: And we automate banks. We were the first one to 441 00:23:43,160 --> 00:23:46,080 Speaker 1: actually take this into the cloud ten years ago and 442 00:23:46,119 --> 00:23:49,639 Speaker 1: today we've got sevent fifty customers around the globe. We 443 00:23:49,760 --> 00:23:54,040 Speaker 1: operate in Asia, pac Australia, Japan, we operate in Europe 444 00:23:54,400 --> 00:23:58,840 Speaker 1: as well as the US and Canada. So what has 445 00:23:59,359 --> 00:24:03,560 Speaker 1: been the pro problem then? In terms of the stock market, 446 00:24:03,600 --> 00:24:07,440 Speaker 1: I mean the shares have just come down pretty steadily 447 00:24:08,040 --> 00:24:13,600 Speaker 1: since from nine to that's correct. You know, we have 448 00:24:14,280 --> 00:24:18,120 Speaker 1: ten quarters that are made and raised and beat our expectations. 449 00:24:18,600 --> 00:24:22,000 Speaker 1: So as a result, I don't really track the stock markets, 450 00:24:22,000 --> 00:24:25,000 Speaker 1: but I'm focusing on my customers and my people, and 451 00:24:25,080 --> 00:24:28,439 Speaker 1: I believe that these market cycles changes, we will get 452 00:24:28,480 --> 00:24:31,520 Speaker 1: the right valuation for the company. We are a growth company. 453 00:24:31,560 --> 00:24:34,160 Speaker 1: We do realize that the market sentiment is changed from 454 00:24:34,240 --> 00:24:37,720 Speaker 1: pure growth into profitable growth, and we emphasized this in 455 00:24:37,800 --> 00:24:41,080 Speaker 1: our last um and it's called it. We are moving 456 00:24:41,119 --> 00:24:43,720 Speaker 1: to for next year to a rout off thirty company, 457 00:24:43,760 --> 00:24:46,199 Speaker 1: which is a twenty plus ten, so we are going 458 00:24:46,240 --> 00:24:48,480 Speaker 1: to do a non gap ten percent of the bottom 459 00:24:48,520 --> 00:24:51,399 Speaker 1: line at least, and I feel very optimistic. It's a 460 00:24:51,400 --> 00:24:54,600 Speaker 1: good time for the company after ten years, to turn 461 00:24:54,720 --> 00:24:59,359 Speaker 1: us from pure growth into a best in class profitable growth. Pierre, 462 00:24:59,440 --> 00:25:01,800 Speaker 1: How's how did the pandemic the last three years? How 463 00:25:01,840 --> 00:25:07,200 Speaker 1: did that impact your business? The pandemic actually was pretty 464 00:25:07,240 --> 00:25:09,959 Speaker 1: good for us because the government gave all this football 465 00:25:10,000 --> 00:25:13,240 Speaker 1: p money, the payment protection plan to banks and said 466 00:25:13,240 --> 00:25:15,000 Speaker 1: distribute this and they have no ways to do it. 467 00:25:15,040 --> 00:25:18,840 Speaker 1: Through Encino stepped in and distributed billions of dollars on 468 00:25:18,880 --> 00:25:22,159 Speaker 1: behalf of the bank because our technology enabled them to 469 00:25:22,240 --> 00:25:24,359 Speaker 1: you can do an online application and get the money 470 00:25:24,400 --> 00:25:27,280 Speaker 1: to you. Part of our growth story was so we 471 00:25:27,359 --> 00:25:30,440 Speaker 1: accelerated through the early stage of the pandemic and then 472 00:25:30,480 --> 00:25:33,960 Speaker 1: towards the end um some of that business went away 473 00:25:34,040 --> 00:25:36,400 Speaker 1: and that's what slowed down our growth rate because year 474 00:25:36,480 --> 00:25:38,399 Speaker 1: over year you had a massive spike and go to 475 00:25:38,400 --> 00:25:41,760 Speaker 1: and then some of the business panned out. So it 476 00:25:41,880 --> 00:25:45,359 Speaker 1: was a good thing for us. It accelerated um digital 477 00:25:45,400 --> 00:25:48,360 Speaker 1: transformation and the awareness of how people want to interact 478 00:25:48,359 --> 00:25:50,480 Speaker 1: with the banks. So I think long sterm it's a 479 00:25:50,520 --> 00:25:52,960 Speaker 1: great thing for us. All right, Pierre, good stuff. Appreciate 480 00:25:52,960 --> 00:25:54,720 Speaker 1: you taking a few minutes to check in with us. 481 00:25:54,760 --> 00:25:59,040 Speaker 1: Pierre and not a CEO and chairman of Encino fintech company. 482 00:25:59,160 --> 00:26:02,399 Speaker 1: It's a star symbols n C n O trades on 483 00:26:02,560 --> 00:26:08,080 Speaker 1: the nastack. We appreciate getting a few minutes of his time. Well, 484 00:26:08,119 --> 00:26:12,000 Speaker 1: the FED has been raising interest rates to combat inflation, 485 00:26:12,119 --> 00:26:14,359 Speaker 1: and one of the areas where we've seen the impact 486 00:26:14,800 --> 00:26:17,560 Speaker 1: most notably has been in the housing market. Uh, you know, 487 00:26:17,600 --> 00:26:20,040 Speaker 1: certainly feeling the negative impacts of higher interest rates. We 488 00:26:20,080 --> 00:26:21,840 Speaker 1: want to get the latest on what's going on there 489 00:26:21,840 --> 00:26:25,800 Speaker 1: in the construction business. John Fish, CEO and chairman of 490 00:26:25,880 --> 00:26:28,720 Speaker 1: Suffolk Construction Group up there in the Boston area. John, 491 00:26:28,760 --> 00:26:30,760 Speaker 1: thanks so much for joining us. Talk to us about 492 00:26:30,840 --> 00:26:33,840 Speaker 1: kind of your business. How's your business been impacted by 493 00:26:34,680 --> 00:26:38,480 Speaker 1: rising interest rates this year? Yeah, well, man, Paul again, 494 00:26:38,560 --> 00:26:40,360 Speaker 1: thank you very much as an honor just to be 495 00:26:40,600 --> 00:26:42,639 Speaker 1: involved this morning. You know, it's interesting is is we 496 00:26:42,680 --> 00:26:45,280 Speaker 1: all know real estate runs on credit, uh, and the 497 00:26:45,320 --> 00:26:48,719 Speaker 1: interest rates, the higher they go, the more impact they 498 00:26:48,760 --> 00:26:51,440 Speaker 1: have on our industry overall. And what we're seeing right 499 00:26:51,440 --> 00:26:53,560 Speaker 1: now is the interest rates are climbing to six six 500 00:26:53,600 --> 00:26:56,480 Speaker 1: appercent for purchasing a house in today's day and age, 501 00:26:56,680 --> 00:26:59,639 Speaker 1: it's really tamped down the demand for housing. People that 502 00:26:59,720 --> 00:27:01,720 Speaker 1: have a you know, to an episode mortgage don't want 503 00:27:01,720 --> 00:27:03,480 Speaker 1: to move out of a to an episode mortgage into 504 00:27:03,480 --> 00:27:06,040 Speaker 1: a six and appisent mortgage. So my sense to be is, 505 00:27:06,080 --> 00:27:08,960 Speaker 1: I think the more these traits continue to climb, the 506 00:27:08,960 --> 00:27:10,960 Speaker 1: more impact is going to have on the overall economy. 507 00:27:11,359 --> 00:27:14,960 Speaker 1: So what, uh is the focus of the construction you 508 00:27:15,040 --> 00:27:17,119 Speaker 1: do at Suffolk, Well, what we do we work all 509 00:27:17,160 --> 00:27:19,840 Speaker 1: over the country with the different types of educational, healthcare 510 00:27:19,880 --> 00:27:22,200 Speaker 1: and life sciences and a variety different types of work. 511 00:27:22,200 --> 00:27:24,080 Speaker 1: But what we're seeing right now on the residential side 512 00:27:24,240 --> 00:27:27,160 Speaker 1: and the commercial side. One residential it has slowed down 513 00:27:27,440 --> 00:27:30,760 Speaker 1: projects on penciling out like they were say, almost like 514 00:27:30,920 --> 00:27:32,800 Speaker 1: I would say, less than nine months ago, because the 515 00:27:32,840 --> 00:27:36,600 Speaker 1: impact administrates, the cost of funds are driving this almost 516 00:27:36,600 --> 00:27:38,800 Speaker 1: to a stand still in many respects. That on the 517 00:27:38,840 --> 00:27:41,240 Speaker 1: office side, which I think is really crippling right now, 518 00:27:41,320 --> 00:27:44,720 Speaker 1: because we all know what people working from home is 519 00:27:44,760 --> 00:27:48,080 Speaker 1: have a devastating impact on the inner city areas and 520 00:27:48,119 --> 00:27:50,639 Speaker 1: on small businesses as we know. So to me, we 521 00:27:50,680 --> 00:27:53,200 Speaker 1: need to figure out overall how do we get people 522 00:27:53,200 --> 00:27:56,720 Speaker 1: backing the seats in their offices and consuming in the 523 00:27:56,800 --> 00:27:59,800 Speaker 1: small shops, piece of shops, coffee shops, and all the 524 00:28:00,000 --> 00:28:03,680 Speaker 1: of these around America today. So John, kind of where 525 00:28:03,720 --> 00:28:05,919 Speaker 1: where are you seeing it in your business? Because you know, 526 00:28:06,560 --> 00:28:08,119 Speaker 1: I'm just looking at your website here. I know you 527 00:28:08,200 --> 00:28:11,760 Speaker 1: do a lot of you know, uh business uh construction 528 00:28:11,880 --> 00:28:15,080 Speaker 1: as as well as uh residential. Where are you seeing it? 529 00:28:15,280 --> 00:28:19,520 Speaker 1: Most notably? I would say right now, it's the areas, uh, 530 00:28:19,760 --> 00:28:21,960 Speaker 1: right right now in the east coast of the country 531 00:28:22,000 --> 00:28:24,080 Speaker 1: and the west coast of country. What was seeing in 532 00:28:24,080 --> 00:28:26,480 Speaker 1: the areas where it's more favorable from a tax point 533 00:28:26,480 --> 00:28:29,200 Speaker 1: of view, I would say Texas in the southeast part 534 00:28:29,200 --> 00:28:32,760 Speaker 1: of the country, there's more economic activity and momentum in 535 00:28:32,760 --> 00:28:35,399 Speaker 1: those particular eras there are in other particular eras. For 536 00:28:35,400 --> 00:28:37,280 Speaker 1: an example, in the Northeast, they just raised what it's 537 00:28:37,280 --> 00:28:40,720 Speaker 1: called millionaires tax that raises four percent on the state taxes. 538 00:28:40,960 --> 00:28:43,960 Speaker 1: And although it's not significant, it is significant because again 539 00:28:44,000 --> 00:28:47,240 Speaker 1: it's piling on top of piling taxes. On talk of taxes, 540 00:28:47,400 --> 00:28:49,120 Speaker 1: what we need to do. We need to open up 541 00:28:49,160 --> 00:28:52,960 Speaker 1: the aperture from a business perspective, because business drives our economy. 542 00:28:53,200 --> 00:28:55,640 Speaker 1: What can we do to put people back in the seats, 543 00:28:55,680 --> 00:28:58,160 Speaker 1: back to work, okay, and generate what I call the 544 00:28:58,160 --> 00:29:01,920 Speaker 1: American dream? All right? So, um, we are in a 545 00:29:02,000 --> 00:29:05,440 Speaker 1: situation that looks like it could get worse economically. A 546 00:29:05,520 --> 00:29:10,360 Speaker 1: recession has been forecast by pretty much anybody. Um uh 547 00:29:10,400 --> 00:29:13,240 Speaker 1: that we that we talked to. What's your outlook for 548 00:29:13,280 --> 00:29:16,040 Speaker 1: the economy, say in three And how does that then 549 00:29:16,160 --> 00:29:18,880 Speaker 1: further affect a business that, as you point out, has 550 00:29:18,920 --> 00:29:22,560 Speaker 1: already been ground to a halt. Well what what? What 551 00:29:22,640 --> 00:29:24,120 Speaker 1: my sense is right now? I look at it like 552 00:29:24,120 --> 00:29:27,960 Speaker 1: a patient. The patient is sick, the medication is interest rates, right, now, 553 00:29:28,240 --> 00:29:30,520 Speaker 1: I think the hiring of interest rates the FED is 554 00:29:30,560 --> 00:29:33,080 Speaker 1: doing on a gradual basis is working. I think the 555 00:29:33,120 --> 00:29:35,640 Speaker 1: fifty basis points are going to produce hopefully next week 556 00:29:35,640 --> 00:29:39,000 Speaker 1: and not I think we'll sort of send this thing up. 557 00:29:39,000 --> 00:29:43,040 Speaker 1: They are slowing the rate rising going forward. And also 558 00:29:43,080 --> 00:29:46,800 Speaker 1: what I see is the rate increase is having an 559 00:29:46,800 --> 00:29:51,040 Speaker 1: impact on softening consumer demand and is driving down the 560 00:29:51,080 --> 00:29:53,680 Speaker 1: demand issue. But what I really think is right now, 561 00:29:53,840 --> 00:29:57,080 Speaker 1: we're always talking about the terminal rate of interest rates. 562 00:29:57,120 --> 00:29:59,560 Speaker 1: I think now we're talking about the duration of where 563 00:29:59,640 --> 00:30:01,680 Speaker 1: these at rates are going to go. Because I think 564 00:30:01,680 --> 00:30:06,120 Speaker 1: the uncertainty driven by the duration is creating a lot 565 00:30:06,200 --> 00:30:09,120 Speaker 1: a lot of concern for the customer and the consumer, 566 00:30:09,360 --> 00:30:11,400 Speaker 1: and that's why they're starting now to put more pile 567 00:30:11,480 --> 00:30:14,280 Speaker 1: up on the sidelines. From my perspective, John, talk to 568 00:30:14,320 --> 00:30:18,520 Speaker 1: us about labor um to build your projects. How has 569 00:30:18,560 --> 00:30:20,840 Speaker 1: it been, how is it now? What are you guys 570 00:30:20,840 --> 00:30:23,440 Speaker 1: trying to do to adapt? You know, it's a great question. 571 00:30:23,440 --> 00:30:25,480 Speaker 1: I would say there's three what I call the three 572 00:30:25,520 --> 00:30:27,640 Speaker 1: eyes in our industry that we really keep an eye on. 573 00:30:27,640 --> 00:30:30,200 Speaker 1: One his interest rates, and again I said, not determinable 574 00:30:30,360 --> 00:30:32,880 Speaker 1: duration together was an inflation, right now with the seven 575 00:30:32,880 --> 00:30:34,880 Speaker 1: point seven percent, and I think that has a lot 576 00:30:34,920 --> 00:30:36,920 Speaker 1: to do with pupping three trillion dollars in the economy. 577 00:30:37,080 --> 00:30:40,320 Speaker 1: And last is, I think we get a significant structural 578 00:30:40,360 --> 00:30:43,720 Speaker 1: issue in America today that I think we need to okay, 579 00:30:43,800 --> 00:30:46,240 Speaker 1: both in Washington and the business we have to come 580 00:30:46,280 --> 00:30:49,400 Speaker 1: to terms with. It's not only lower workforce participation or 581 00:30:49,440 --> 00:30:53,240 Speaker 1: aging workforce where people working from home, it's all the above. 582 00:30:53,440 --> 00:30:56,640 Speaker 1: And my concern is if we don't resolve this immigration 583 00:30:56,680 --> 00:30:59,160 Speaker 1: issue in the United States of America, we are going 584 00:30:59,240 --> 00:31:01,200 Speaker 1: to become to a and still are not able to 585 00:31:01,240 --> 00:31:04,960 Speaker 1: produce because right now our work force today is aged. 586 00:31:05,320 --> 00:31:08,840 Speaker 1: It's different technologically from the tools that they're using. And 587 00:31:08,920 --> 00:31:11,680 Speaker 1: also the sense to me is this lower workforce participation 588 00:31:12,160 --> 00:31:13,840 Speaker 1: we need to come to grips. And I think that's 589 00:31:13,840 --> 00:31:16,640 Speaker 1: probably one of the most important issues government today in 590 00:31:16,760 --> 00:31:18,520 Speaker 1: business has to come together and to try to solve. 591 00:31:18,920 --> 00:31:21,320 Speaker 1: I mean the likelihood of that happening. This is a 592 00:31:21,400 --> 00:31:24,040 Speaker 1: third issue. Right, Well, here's my sense. At the end 593 00:31:24,040 --> 00:31:26,040 Speaker 1: of the day, right we had the Gang of Eight 594 00:31:26,280 --> 00:31:29,360 Speaker 1: talking about immigration back you know, two years ago. What 595 00:31:29,480 --> 00:31:31,120 Speaker 1: I think we need to take that playbook out of 596 00:31:31,120 --> 00:31:32,960 Speaker 1: the shelf and put it back on the table and 597 00:31:33,000 --> 00:31:36,600 Speaker 1: start having some significant conversations about how do we get 598 00:31:36,640 --> 00:31:39,120 Speaker 1: people back to work and more importantly, how do we 599 00:31:39,200 --> 00:31:42,080 Speaker 1: resolve this immigration to put people back to work, to 600 00:31:42,120 --> 00:31:45,840 Speaker 1: increase the labor force participation and hopefully increase product give 601 00:31:45,880 --> 00:31:49,560 Speaker 1: you overall inefficiency. So John and I know you guys 602 00:31:49,840 --> 00:31:53,520 Speaker 1: have a big, big business, uh touch about regionality. Are 603 00:31:53,520 --> 00:31:57,120 Speaker 1: you seeing areas of the country that are particularly weak, 604 00:31:57,360 --> 00:32:00,080 Speaker 1: areas that are particularly strong, maybe bucking the trend? What 605 00:32:00,120 --> 00:32:02,280 Speaker 1: are you seeing? What we see? We were about a 606 00:32:02,280 --> 00:32:04,480 Speaker 1: five and a half billion dollar business. We work nationally, 607 00:32:04,520 --> 00:32:06,240 Speaker 1: and what we're seeing, as I pointed out, in the 608 00:32:06,320 --> 00:32:10,960 Speaker 1: areas where it's more of a progressive approach to taxation 609 00:32:11,680 --> 00:32:15,400 Speaker 1: and the overall attitude about business climates is we're seeing 610 00:32:15,400 --> 00:32:18,440 Speaker 1: those particularly areas being more impacted by the heightening of 611 00:32:18,480 --> 00:32:21,920 Speaker 1: interest rates and areas, like I said, the southeast part 612 00:32:21,920 --> 00:32:24,240 Speaker 1: of the country and in the Texas region right now, 613 00:32:24,560 --> 00:32:27,840 Speaker 1: and Okay, what we're seeing is more open to a 614 00:32:27,920 --> 00:32:32,000 Speaker 1: policy to try to make things work. And so we've 615 00:32:32,040 --> 00:32:34,640 Speaker 1: grown our business significantly the seth East part of the country. 616 00:32:34,840 --> 00:32:37,160 Speaker 1: We're growing our business in the Texas region right now, 617 00:32:37,360 --> 00:32:41,000 Speaker 1: and we are very very bullish on a going forward basis. Again, 618 00:32:41,040 --> 00:32:43,640 Speaker 1: everything is relative. Again, we were not really sure what 619 00:32:43,720 --> 00:32:45,640 Speaker 1: exactly that's going to do over the next I would 620 00:32:45,680 --> 00:32:48,760 Speaker 1: say two or three quarters, but my senses demanded will 621 00:32:48,920 --> 00:32:50,920 Speaker 1: slow down. But in the good areas of the country 622 00:32:50,960 --> 00:32:54,200 Speaker 1: with his favorable tax policy, is labor availability like there 623 00:32:54,240 --> 00:32:56,040 Speaker 1: is in Texas in the southeast part of the country, 624 00:32:56,240 --> 00:32:58,920 Speaker 1: You're gonna see a lot more economic bybrancy in those 625 00:32:58,960 --> 00:33:00,840 Speaker 1: areas than you are. Another pic the area is where 626 00:33:00,840 --> 00:33:03,920 Speaker 1: we don't see that because of immigration, well, you know, 627 00:33:04,480 --> 00:33:07,520 Speaker 1: because of the overall business climate. I think you see 628 00:33:07,520 --> 00:33:09,600 Speaker 1: you see a migration of people out of the Northeast, 629 00:33:10,280 --> 00:33:12,360 Speaker 1: especially the New York New Jersey area. I think the 630 00:33:12,400 --> 00:33:14,480 Speaker 1: same thing is going to happen in in the Boston area. 631 00:33:14,600 --> 00:33:16,960 Speaker 1: And I think the same thing from California Arizona. So 632 00:33:16,960 --> 00:33:18,760 Speaker 1: when you take a look at me of the bicoastal 633 00:33:18,800 --> 00:33:21,960 Speaker 1: areas of people moving inland and down south, I really 634 00:33:22,040 --> 00:33:24,720 Speaker 1: believe what's going to happen is those particular areas of 635 00:33:24,760 --> 00:33:28,080 Speaker 1: our country. I'm going to continue to grow grow from 636 00:33:28,080 --> 00:33:30,840 Speaker 1: a driven by business and I think at the end 637 00:33:30,840 --> 00:33:32,479 Speaker 1: of the day, I think that is going to be 638 00:33:32,560 --> 00:33:35,520 Speaker 1: really the pocket to grow gover the next decade that 639 00:33:35,600 --> 00:33:38,080 Speaker 1: we need to really focus on, all right, John, great stuff. 640 00:33:38,080 --> 00:33:41,560 Speaker 1: Always appreciate getting your perspective, John Fish. He is the 641 00:33:41,640 --> 00:33:46,000 Speaker 1: CEO and chairman of Suffolk Construction Company UH commercial real 642 00:33:46,120 --> 00:33:50,120 Speaker 1: estate construction on the national scale, giving a sense of 643 00:33:50,240 --> 00:33:52,800 Speaker 1: kind of the the opportunities and the challenges. Of course, 644 00:33:52,840 --> 00:33:55,640 Speaker 1: the key challenge UH and that part of the economy 645 00:33:55,800 --> 00:33:59,120 Speaker 1: is rising interest rates making it tougher to get those 646 00:33:59,160 --> 00:34:02,800 Speaker 1: projects done. All so calls out labor as a challenge 647 00:34:03,120 --> 00:34:05,760 Speaker 1: as well. Getting folks on the site. Thanks for listening 648 00:34:05,800 --> 00:34:09,319 Speaker 1: to the Bloomberg Markets podcast. You can subscribe and listen 649 00:34:09,320 --> 00:34:13,600 Speaker 1: to interviews of Apple Podcasts or whatever podcast platform you prefer. 650 00:34:14,000 --> 00:34:17,960 Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three 651 00:34:18,600 --> 00:34:21,200 Speaker 1: on Fall Sweeney I'm on Twitter at pt Sweeney. Before 652 00:34:21,239 --> 00:34:24,359 Speaker 1: the podcast, you can always catch us worldwide at Bloomberg Radio.