WEBVTT - US Manufacturing Activity Contracted in May for a Third Month 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.560 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:18.560 Eastern on Applecarclay and Android Auto with the Bloomberg Business App. 0:00:18.640 --> 0:00:21.920 Listen on demand wherever you get your podcasts, or watch 0:00:21.960 --> 0:00:24.400 us live on YouTube's. 0:00:23.560 --> 0:00:26.320 Gonna right to Susan Spence. She's the chair of ISM Manufacturing. 0:00:26.400 --> 0:00:28.960 Susan talk to us about this. ISM Manufacturing came out 0:00:29.040 --> 0:00:31.800 at forty eight point five. The consensus was forty nine 0:00:32.120 --> 0:00:33.400 point five. Tell us what's going on? 0:00:34.200 --> 0:00:36.120 Good morning, Thank you for having me on. 0:00:36.479 --> 0:00:41.280 You know, unfortunately we have another month of contraction abouzero 0:00:41.280 --> 0:00:44.159 point two percent lower than last month, so forty eight 0:00:44.159 --> 0:00:44.680 point five. 0:00:44.720 --> 0:00:46.680 We are absolutely under consensus. 0:00:47.200 --> 0:00:49.839 What we're seeing and what our panelists are telling us, 0:00:49.880 --> 0:00:54.880 of course, is a continued issue with uncertainty in the 0:00:54.920 --> 0:00:57.800 market driven by terrorists. So this month, if I can 0:00:57.880 --> 0:01:01.600 talk about demand, outputs, and input, it's demand which is 0:01:01.760 --> 0:01:05.720 new orders, customer inventory, backlog, and new export orders. Three 0:01:05.720 --> 0:01:09.360 of those four indicators continue to contract. Backlog and new 0:01:09.480 --> 0:01:13.800 orders contracted a bit slower this month at a slower rate. 0:01:14.160 --> 0:01:15.600 New export orders. 0:01:15.360 --> 0:01:19.880 Not surprisingly took another plunge in an accelerated reduction at 0:01:19.880 --> 0:01:24.000 a three percentage points lower. So, in our view, the 0:01:24.120 --> 0:01:27.840 lack of new orders driven by that uncertain demand from 0:01:27.840 --> 0:01:31.760 the marketplace demand, the conflicts of who's going to pay 0:01:32.280 --> 0:01:36.680 for the tariff costs. The customer index for inventories does 0:01:36.760 --> 0:01:37.440 remain low. 0:01:37.600 --> 0:01:39.319 We always consider that positive. 0:01:39.319 --> 0:01:43.320 At some point customers have to reorder, and so we're 0:01:43.360 --> 0:01:44.320 hoping to see that. 0:01:44.920 --> 0:01:46.480 But that continues to contract. 0:01:47.080 --> 0:01:51.520 So our in our survey, eighty six percent of the 0:01:51.680 --> 0:01:55.000 general comments from our panelists were about the terriffs. 0:01:55.120 --> 0:01:57.680 It was eighty two percent last month. It just continues 0:01:57.720 --> 0:02:01.440 to grow. It's not gotten any better, and certainty is 0:02:01.520 --> 0:02:02.120 even worse. 0:02:02.120 --> 0:02:06.320 Susan, Susan, do you get the sense that if some 0:02:06.360 --> 0:02:09.120 of the tariff headwinds were removed, things get better quickly 0:02:09.280 --> 0:02:13.320 or is this sort of permanent confusion in the manufacturing sector. 0:02:14.280 --> 0:02:16.280 It's not permanent, but it's not quick. 0:02:16.680 --> 0:02:20.640 So we think if tomorrow everything was settled, and of 0:02:20.639 --> 0:02:21.360 course it won't be. 0:02:21.440 --> 0:02:23.280 We think we're in this for at least the summer. 0:02:23.680 --> 0:02:26.400 It's going to take some time. We already have. 0:02:26.440 --> 0:02:31.760 Some inventory at the higher prices customers, again, is indicated 0:02:31.800 --> 0:02:33.000 by the survey results. 0:02:33.000 --> 0:02:37.480 Are hesitating to order, and so that is driven down. Production, 0:02:37.840 --> 0:02:40.800 backlog is down, and I'll talk about production and employment 0:02:40.840 --> 0:02:43.720 as well. So we're in it for a bit. The 0:02:43.760 --> 0:02:45.520 best thing that could happen is certainty. 0:02:46.200 --> 0:02:48.520 And then my personal belief is it's still going to 0:02:48.560 --> 0:02:50.840 take a few months for folks to not wait for 0:02:50.840 --> 0:02:51.679 the other shoe to drop. 0:02:51.720 --> 0:02:54.000 If you will, Susan, thank you so much for give 0:02:54.080 --> 0:02:55.760 us a couple of minutes of your time. Susan Spence, 0:02:55.880 --> 0:03:00.720 Chair for Ism Manufacturing PMI, the Institute for Supply Management, 0:03:01.120 --> 0:03:05.600 joining us here. Weaker than expected manufacturing numbers coming out 0:03:05.680 --> 0:03:06.160 this month. 0:03:07.760 --> 0:03:11.480 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:03:11.560 --> 0:03:14.960 weekdays at ten am Eastern on Applecarplay and Android Auto 0:03:15.040 --> 0:03:18.120 with the Bloomberg Business app. Listen on demand wherever you 0:03:18.160 --> 0:03:21.320 get your podcasts, or watch us live on YouTube. 0:03:21.880 --> 0:03:24.400 The last time we saw Sam Fazzelli, who's the director 0:03:24.400 --> 0:03:27.040 of research and does some of the healthcare stuff for 0:03:27.040 --> 0:03:29.320 Bloomberg Intelligence, he was here in New York and he 0:03:29.360 --> 0:03:32.320 was on his way to Chicago to some conference where 0:03:32.360 --> 0:03:34.160 a lot of these healthcare folks get together and they 0:03:34.200 --> 0:03:36.440 talk about new drugs and new therapies, and he said, 0:03:36.880 --> 0:03:38.800 watch out, there's going to be some deals coming out 0:03:38.800 --> 0:03:38.960 of there. 0:03:39.000 --> 0:03:39.920 Boy was he right. 0:03:40.520 --> 0:03:44.200 Santa Fe buying immunology biotech Blueprint for nine point one billion, 0:03:44.240 --> 0:03:46.600 Bristol to pay buy in Tech up to eleven billion 0:03:46.600 --> 0:03:50.200 dollars for a cancer deal. Moderner is getting some new news. 0:03:50.200 --> 0:03:53.440 So we got to get Sam here. He's still in Chicago. 0:03:53.480 --> 0:03:56.360 He's at our Chicago office there, Sam, thanks so much 0:03:56.400 --> 0:03:59.360 for joining us here. We've had some deals today in 0:03:59.400 --> 0:04:02.520 the healthcare space. Help us think about this centi feed 0:04:02.640 --> 0:04:06.440 deal here. Nine point one billion dollars. That seems pretty substantial. 0:04:07.360 --> 0:04:11.080 Yeah, well it's more than I have in the back 0:04:11.120 --> 0:04:13.120 of my sofa if you like, and you know the 0:04:13.160 --> 0:04:17.159 little change that you find there. But this sector needs these. 0:04:17.240 --> 0:04:20.040 I mean, we've had a drought of deals since Johnson 0:04:20.080 --> 0:04:23.480 and Johnson did interest Sellular Therapeutics, and then we've got 0:04:23.480 --> 0:04:27.240 this deal now. And the sector, as I'm sure you've 0:04:27.240 --> 0:04:30.440 talked about we've talked about, has been under pressure because 0:04:30.440 --> 0:04:33.680 of all the new issues that are being created for 0:04:33.760 --> 0:04:38.400 them with the current administration, and that really slowed down 0:04:38.440 --> 0:04:40.440 deal making. So it's nice to see this deal happen. 0:04:40.800 --> 0:04:43.480 Not the biggest premium in the world twenty seven billion dollars. 0:04:43.800 --> 0:04:46.040 But still, it's nice to see some of these deals happen, 0:04:46.080 --> 0:04:50.479 and I think, assuming we don't get another round of 0:04:51.279 --> 0:04:56.840 tariffs for farmer drugs and most favored nation conversations turning up, 0:04:57.240 --> 0:04:59.400 it might be the beginning of a little renaissance in 0:04:59.480 --> 0:04:59.960 deal making. 0:05:00.680 --> 0:05:04.279 What was the absolute coolest thing that you learned over 0:05:04.320 --> 0:05:04.800 the weekend? 0:05:04.800 --> 0:05:05.320 I mean, I was. 0:05:05.839 --> 0:05:07.640 Floored yesterday I was sitting and thinking of you and 0:05:07.680 --> 0:05:10.760 reading all these amazing articles coming out about these amazing 0:05:10.760 --> 0:05:14.080 new drugs that could have tremendous effect on cancer. 0:05:14.160 --> 0:05:15.800 For example, what was the coolest thing you heard? 0:05:16.680 --> 0:05:21.800 Yeah, so, Alex, there's been some continued evolution an increase 0:05:21.880 --> 0:05:26.000 in opportunities in breast cancer. So AstraZeneca had two presentations 0:05:26.040 --> 0:05:29.360 yesterday at what they called plenary sessions, and that's one 0:05:29.400 --> 0:05:31.440 of the key areas where I mean the room gets 0:05:31.440 --> 0:05:34.240 packed with ten thousand people or whatever the number is. 0:05:34.880 --> 0:05:37.800 So they had an update on a breast cancer drug 0:05:37.839 --> 0:05:43.800 which is continuing to further expand the options that patients 0:05:43.839 --> 0:05:47.000 when it gets approved. If it gets approved, patients have 0:05:47.160 --> 0:05:49.680 in treating that disease, which has become something that a 0:05:49.720 --> 0:05:52.000 lot of people as long as they're lucky and don't 0:05:52.000 --> 0:05:54.080 get the worst kind of it, it can live with 0:05:54.200 --> 0:05:56.440 for quite a long time now. And then we had 0:05:56.480 --> 0:06:00.760 one also from them on gastric This the guest stories 0:06:00.800 --> 0:06:03.599 of digital junction disease, which is not one of the 0:06:04.160 --> 0:06:06.680 is a bad one and there's not been many therapies there, 0:06:07.200 --> 0:06:10.760 and so that was a really good, very good data set, 0:06:10.800 --> 0:06:13.400 I have to say, practice changing. And there's a whole 0:06:13.480 --> 0:06:17.039 host of phase one, phase two early stage drugs that 0:06:17.080 --> 0:06:19.880 look really good. So I'm going to be coming to 0:06:19.920 --> 0:06:22.000 this conference for I don't know how many more years 0:06:22.040 --> 0:06:23.479 because it's going to keep developing. 0:06:24.120 --> 0:06:27.040 Bristol paying Buy and Tech up to eleven point one 0:06:27.080 --> 0:06:30.440 billion dollars for cancer deals. What's going on there? 0:06:31.160 --> 0:06:34.320 Yeah, up to is the operative word. The actually guaranteed 0:06:34.360 --> 0:06:36.560 cash is about three and a half billion dollars, so 0:06:36.560 --> 0:06:39.560 about one and a half billion right up front, and 0:06:39.600 --> 0:06:42.119 then when the deal closes, and then by twenty twenty 0:06:42.160 --> 0:06:45.680 eight another two billion. That's not contingent on any there 0:06:45.680 --> 0:06:49.400 are just anniversary payments, payments. So that's pretty good given 0:06:49.440 --> 0:06:51.719 that they acquired the asset, amongst the whole host of 0:06:51.760 --> 0:06:55.200 other stuff from a Chinese biotech company acquisition by a 0:06:55.240 --> 0:06:58.479 theist only a few months ago, and it's in a 0:06:58.520 --> 0:07:00.799 new class of drugs that people have got excited about. 0:07:01.640 --> 0:07:06.000 There's Mark that did a deal, There's Summit and Akiso. 0:07:06.600 --> 0:07:09.760 Fizer just did a deal on last week, paying one 0:07:09.760 --> 0:07:13.000 point two billion dollars for a drug in development, which 0:07:13.000 --> 0:07:15.120 we quite like. The data for that was presented here. 0:07:15.400 --> 0:07:17.640 So these are drugs that are trying to push the 0:07:17.680 --> 0:07:20.960 barrier of what we've been able to achieve, which with 0:07:21.000 --> 0:07:24.960 what's called immunotherapy, can you do better? Can you push 0:07:25.760 --> 0:07:28.560 more patients to survive longer using these drugs? 0:07:29.360 --> 0:07:32.280 What about Oh wow, I just lost my train of thought. 0:07:32.280 --> 0:07:34.480 Oh it was there, it was so brilliant, and then 0:07:34.520 --> 0:07:35.119 it went away. 0:07:35.320 --> 0:07:37.960 Oh I know. Funding, here's my brilliant point. 0:07:38.360 --> 0:07:42.840 Government funding for universities that have big medical units. 0:07:42.880 --> 0:07:44.920 Like did What were people saying about that? 0:07:45.600 --> 0:07:47.760 Yeah, they're not happy. I've talked to a lot of 0:07:47.800 --> 0:07:52.000 people here and you know, even my interestingly an uber 0:07:52.080 --> 0:07:55.360 driver that I had who does double just doubles up. 0:07:55.440 --> 0:07:59.000 She works in a lab that does genomic analysis for 0:08:00.080 --> 0:08:04.440 scientists at Northwestern University in Chicago. She said she's noticing 0:08:04.440 --> 0:08:08.080 a palpable slowdown in the request she's getting to do 0:08:08.480 --> 0:08:13.040 analysis of you know, laboratory analysis because people are uncertain. 0:08:14.000 --> 0:08:16.880 It's even got to yuber driver, which is which is 0:08:16.920 --> 0:08:19.000 sad now it is it is a problem. People are 0:08:19.040 --> 0:08:23.480 worried and will We'll have to see whether philanthropists can 0:08:23.480 --> 0:08:24.040 fill the gap. 0:08:24.920 --> 0:08:29.920 Sam, So from your conference there in Chicago, what's is 0:08:29.960 --> 0:08:33.920 the key focus still cancer or is there other parts 0:08:33.920 --> 0:08:37.040 of healthcare that are getting as much I guess attention. 0:08:37.880 --> 0:08:39.960 Yeah, but so this is a cancer conference. This is 0:08:40.000 --> 0:08:43.120 the biggest cancer conference in the world. People come from 0:08:43.200 --> 0:08:45.520 and I have to say there's a palpable increase in 0:08:45.559 --> 0:08:49.560 the number of presentations by Chinese scientists, real and companies. Yeah, 0:08:49.600 --> 0:08:52.880 every year's got more and more, which is expected. They've 0:08:52.880 --> 0:08:57.559 been funding research significantly for the past fifteen twenty years 0:08:57.760 --> 0:09:00.600 and this is the fruits of it. The X conference 0:09:00.679 --> 0:09:04.720 that's coming up is a also. I don't think it's 0:09:04.720 --> 0:09:06.959 in Chicago, but it's over here somewhere in the US. 0:09:07.160 --> 0:09:10.199 Is the American Diabetes That's where you get all the obesity, 0:09:11.160 --> 0:09:14.520 liver disease kind of data that that we're also looking 0:09:14.559 --> 0:09:14.880 forward to. 0:09:15.600 --> 0:09:17.520 All right, Sam, thanks so much for joining us. As always, 0:09:17.520 --> 0:09:19.800 Sam Fizzelli, Director of Research for Global and Industries and 0:09:19.880 --> 0:09:24.160 Senior Pharmaceuticals Anels for Bloomberg Intelligence. He's based in London, 0:09:24.200 --> 0:09:26.920 but he's in our Chicago bureau todays. He spent the 0:09:26.920 --> 0:09:30.360 weekend Eddie as he was just mentioning a cancer conference 0:09:30.400 --> 0:09:32.760 and where you know, a lot of the latest science 0:09:33.600 --> 0:09:36.360 is presented, so and in for investors, it's really important 0:09:36.360 --> 0:09:39.320 to think about how you know which things which I guess, 0:09:39.360 --> 0:09:41.240 therapies and drugs you want to finance? 0:09:41.480 --> 0:09:41.800 Mean work? 0:09:42.080 --> 0:09:44.680 Does Sammon have the coolest job? Like media is really 0:09:44.679 --> 0:09:45.920 cool to one of the people. 0:09:46.080 --> 0:09:47.640 Energy is really cool. We all love it, but like 0:09:47.679 --> 0:09:49.520 his stuff like changes the world and. 0:09:49.800 --> 0:09:52.240 He actually understands the science and can explain it to 0:09:52.280 --> 0:09:53.000 people like us. 0:09:54.760 --> 0:09:58.440 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:09:58.520 --> 0:10:01.920 weekdays at ten am Eastern on Applecarplay and Android Auto 0:10:02.040 --> 0:10:05.080 with the Bloomberg Business app. Listen on demand wherever you 0:10:05.120 --> 0:10:09.240 get your podcasts, or watch us live on YouTube at alex. 0:10:09.040 --> 0:10:10.640 Deal and Paul Sweeney live here in our Bloomberg and 0:10:10.720 --> 0:10:14.000 Arrector Broker Studio streaming live on YouTube as well as 0:10:14.080 --> 0:10:17.719 John was just reporting SMP at fifty nine hundred. I mean, 0:10:17.840 --> 0:10:21.480 after all ups and downs this year, pretty much year 0:10:21.480 --> 0:10:23.760 to date, we're unched on the S and P five hunderd. 0:10:23.760 --> 0:10:25.120 It feels like a lot of effort for not a 0:10:25.200 --> 0:10:29.400 lot of payoff there. Shane Sissel joins US president and 0:10:29.600 --> 0:10:34.400 CEO of ban Rion Capital Management from Chicago, Shana. How 0:10:34.400 --> 0:10:36.959 do you put twenty twenty five year to date into 0:10:37.000 --> 0:10:40.200 context for your clients, because boy, we were down twenty percent. 0:10:40.280 --> 0:10:43.520 Now we've retraced most of that from the recent highs. 0:10:43.679 --> 0:10:48.040 How do you position the twenty twenty five Well, I. 0:10:48.000 --> 0:10:49.920 Went into twenty twenty five thinking it was going. 0:10:49.840 --> 0:10:50.439 To be volatile. 0:10:50.679 --> 0:10:54.520 It lived up to my expectations, so we positioned portfolios 0:10:54.520 --> 0:10:59.400 for volatility and did quite well as a result. Ultimately, 0:10:59.559 --> 0:11:02.520 what come down to is as more and more information 0:11:02.640 --> 0:11:05.120 gets out. We have this twenty four hour news cycle, 0:11:05.160 --> 0:11:10.320 and people get information in real time. The markets are 0:11:10.760 --> 0:11:15.320 able to respond to news quickly. But more importantly, we've 0:11:15.360 --> 0:11:19.280 seen that the retail advisor has been eager to jump 0:11:19.360 --> 0:11:22.440 into the market when it turns downward, which is unusual. 0:11:22.480 --> 0:11:23.760 That's not normally the case. 0:11:24.200 --> 0:11:27.080 It's typically the institutions, and we've seen that kind of 0:11:27.320 --> 0:11:30.760 reversed where the institutions are holding off while the retail 0:11:30.800 --> 0:11:35.000 investors are jumping in, and ultimately that's kept the markets 0:11:35.040 --> 0:11:38.600 from getting too far down and they're able to rebound 0:11:38.600 --> 0:11:39.240 pretty quickly. 0:11:40.320 --> 0:11:40.840 Basically. 0:11:41.320 --> 0:11:43.160 You know, if you look in the past, normally we 0:11:43.360 --> 0:11:46.760 look for the capitulation of the retail advisor, and we 0:11:46.840 --> 0:11:50.200 just haven't seen that. So for those reasons, that's why 0:11:50.280 --> 0:11:52.280 I think there's been such great volatility. 0:11:52.480 --> 0:11:54.000 But on the flip side, you have to wonder, then 0:11:54.040 --> 0:11:56.280 who else is left to buy the rally? So where 0:11:56.280 --> 0:12:00.320 how our funds positioned institutional investors. Clearly retail has been 0:12:00.360 --> 0:12:02.360 buying the dip, so as you mentioned, there may not 0:12:02.440 --> 0:12:03.920 be an extension of that. 0:12:05.240 --> 0:12:08.839 Yeah, but the institutional investors have sat on the sidelines, 0:12:08.880 --> 0:12:11.000 and presently they have the bigger money to put to 0:12:11.080 --> 0:12:13.200 work and more likely to move the market when they 0:12:13.280 --> 0:12:15.920 jump back in. There's still very much on the sidelines, 0:12:16.600 --> 0:12:19.240 so I think there is some opportunity to drive the 0:12:19.280 --> 0:12:22.560 market higher. It's just not how we normally would expect 0:12:22.559 --> 0:12:22.880 it to be. 0:12:23.120 --> 0:12:24.360 It's also a little bit concerning. 0:12:24.440 --> 0:12:28.199 Obviously, the institutional investor tends to be the more informed investor, 0:12:28.800 --> 0:12:30.839 so the fact that they have stayed on the sidelines 0:12:31.600 --> 0:12:33.680 can mean a lot of things, but it's not for 0:12:33.800 --> 0:12:36.640 lack of information on their end and lack of analysis. 0:12:37.360 --> 0:12:40.400 But you know, if we talk about analysis paralysis all 0:12:40.440 --> 0:12:44.640 the time, there's a lot of uncertainty related to tariffs, 0:12:44.960 --> 0:12:49.040 related to the administration, related to monetary policy, and I 0:12:49.080 --> 0:12:52.719 think that in many ways the institutional investor is a 0:12:52.720 --> 0:12:56.960 little paralyzed by the uncertainty and for those reasons unwilling 0:12:56.960 --> 0:12:59.120 to jump into the market, which I think might be 0:12:59.200 --> 0:12:59.840 to their peril. 0:13:00.600 --> 0:13:02.000 Shana, I know you do a lot of work with 0:13:02.000 --> 0:13:05.640 alternative investments. When you speak to independent advisors, how are 0:13:05.640 --> 0:13:09.880 they using alternatives these days when volatility both in the 0:13:09.920 --> 0:13:13.480 equity markets and the bond markets are pretty pronounced. 0:13:13.960 --> 0:13:19.160 Well, that's exactly where they use alternatives. If advisors or 0:13:19.200 --> 0:13:23.160 individuals where to jump and allocate twenty percent of their 0:13:23.160 --> 0:13:26.440 total portfolio two alternatives, they would have actually done quite 0:13:26.440 --> 0:13:28.760 well through the volatility, as these are low to no 0:13:28.880 --> 0:13:32.720 correlation or even in some cases negative correlation assets. And 0:13:32.800 --> 0:13:35.800 so if you look at the most volatile parts of 0:13:36.040 --> 0:13:40.520 the last five months, you look at March, some of April, 0:13:41.160 --> 0:13:44.840 some of February, you'll see that like a BTL, which 0:13:44.880 --> 0:13:47.840 is the AGF anti beta market neutral fund. That fund 0:13:48.920 --> 0:13:52.760 largely outperformed the S and P by a substantial amount, 0:13:52.960 --> 0:13:55.160 was very positive during that period of time. So even 0:13:55.200 --> 0:13:58.240 a small five percent allocation made a huge difference in 0:13:58.240 --> 0:14:00.840 client portfolios. And then you start to pair that with 0:14:01.040 --> 0:14:05.520 other low to no correlation assets like CTA and CBLS 0:14:05.520 --> 0:14:11.439 and MRSK, and then you have Bob Elliott's unlimited multistrat fund, 0:14:11.679 --> 0:14:15.720 and you have a number of these alternative funds that 0:14:15.760 --> 0:14:18.559 all did really well through the volatility. So when equities 0:14:18.600 --> 0:14:21.160 and fixed income were down, they were up, and so 0:14:21.240 --> 0:14:23.680 that actually helped you through the volatilities. So advisors that 0:14:23.720 --> 0:14:26.880 we work with that implemented those portfolios actually wrote out 0:14:26.880 --> 0:14:28.760 that period of time quite well. 0:14:28.960 --> 0:14:31.600 I know that where you look at in the tech 0:14:31.640 --> 0:14:34.560 market isn't necessarily broad strokes or you know, buy AI 0:14:34.880 --> 0:14:38.240 or buy the telecoms or whatever, but the mag seven 0:14:38.320 --> 0:14:41.000 have really helped to lead that rally over the last month. 0:14:41.680 --> 0:14:44.120 Does that continue or do you continue to see value 0:14:44.200 --> 0:14:45.440 in different types of names? 0:14:46.240 --> 0:14:48.920 Well, obviously I see value in different types of names 0:14:48.960 --> 0:14:53.040 as they haven't participated and they are looking more attractive on. 0:14:53.000 --> 0:14:54.200 A valuation basis. 0:14:54.520 --> 0:14:57.480 But the tailwinds really do sit with those tech companies 0:14:57.520 --> 0:15:01.680 because the biggest tailwind to business right now is AI, 0:15:02.160 --> 0:15:06.080 and so anything related to AI, anything incorporating AI wins. 0:15:06.520 --> 0:15:09.920 And so we saw with the mag seven, with the 0:15:09.920 --> 0:15:14.840 most recent Nvidia earnings report that the demand for AI 0:15:15.040 --> 0:15:21.120 is strong and the move to from learning and to 0:15:22.000 --> 0:15:25.680 the next phase of AI is there, and so the 0:15:25.680 --> 0:15:29.680 Blackwell chips, the greater need for computing power. All of 0:15:29.720 --> 0:15:33.000 those things are real and very much in their infancy 0:15:33.160 --> 0:15:36.960 and the sense of that there's no infrastructure there, and 0:15:37.000 --> 0:15:40.160 so there continues to be substantial tailwinds, and so that's 0:15:40.200 --> 0:15:42.760 why they continue to lead. You know, other areas of 0:15:42.800 --> 0:15:46.000 the market have headwinds. So if you look at say energy, 0:15:46.440 --> 0:15:50.360 you know, we have increased supply coming on, but we 0:15:50.480 --> 0:15:55.240 have you know, declining demand from Asia. So that is 0:15:55.320 --> 0:15:57.680 great if you want oil at forty bucks barrel, but 0:15:57.760 --> 0:15:59.960 not great if you're an oil investor or an enery 0:16:00.080 --> 0:16:03.080 G investor. You look at healthcare and we've seen a 0:16:03.120 --> 0:16:06.600 lot of headwindes there but also some tremendous breakthroughs, and 0:16:06.760 --> 0:16:10.720 especially in oncology, so you know, there's pros and constant everything, 0:16:10.760 --> 0:16:12.760 but some of the cyclicals are starting to look cheap, 0:16:12.800 --> 0:16:14.720 and that's definitely a place that I would be looking. 0:16:15.000 --> 0:16:17.080 All right, Shanna, I really appreciate. I appreciate it. Always 0:16:17.080 --> 0:16:17.920 good to get your perspective. 0:16:17.920 --> 0:16:21.640 Shane sissel As, President and CEO of Benryon Capital Management. 0:16:23.320 --> 0:16:27.000 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:27.080 --> 0:16:30.160 weekdays at ten am Eastern on Apple, Coarclay, and Android 0:16:30.200 --> 0:16:33.480 Auto with the Bloomberg Business App. Listen on demand wherever 0:16:33.560 --> 0:16:36.680 you get your podcasts, or watch us live on YouTube. 0:16:36.920 --> 0:16:39.600 This is Boomberg Intelligence. Alex Steel here alongside Paul swe Need. 0:16:39.600 --> 0:16:41.800 This is Boomberg Intelligence Radio. We cover everything you need 0:16:41.840 --> 0:16:44.080 to know in business, economics and finance, a lot of 0:16:44.120 --> 0:16:46.600 media and also a lot of energy. So I don't 0:16:46.640 --> 0:16:49.640 know that much about fusion power. I'm the first one 0:16:49.640 --> 0:16:51.800 to say it. John Tucker apparently knows a lot about it. 0:16:51.800 --> 0:16:54.080 But we're going to discuss this right now. It could 0:16:54.120 --> 0:16:56.479 be a really good source. 0:16:56.240 --> 0:16:57.440 Of clean fuel. 0:16:57.480 --> 0:17:02.120 And for this we bring in tay Technology CEO Michael Binderbauer. 0:17:03.080 --> 0:17:05.359 Just the company, Tay Technology is just closed one hundred 0:17:05.359 --> 0:17:07.600 and fifty million dollars sin its latest funding round. The 0:17:07.640 --> 0:17:10.400 whole point of this company is to develop a commercial 0:17:10.760 --> 0:17:15.000 fusion power Michael, if I knew nothing about fusion, which 0:17:15.000 --> 0:17:16.760 is highly likely, tell me. 0:17:16.880 --> 0:17:18.880 What it is, how hard it is to do. 0:17:20.320 --> 0:17:22.840 Yeah, So it's basically what nature does, based right, It 0:17:22.920 --> 0:17:25.440 gives us our life and energy here on the planet 0:17:25.480 --> 0:17:28.360 from the sun. So any star you look up suffusion 0:17:28.359 --> 0:17:31.040 reactor basically, right. So what we're trying to do is 0:17:31.080 --> 0:17:36.080 to replicate that, terristrially, to make essentially copious power, carbon free, 0:17:36.320 --> 0:17:39.560 clean and sustainable for the future of humanity. 0:17:40.200 --> 0:17:44.680 Where are you in the process at tay So we're 0:17:44.760 --> 0:17:45.320 very close. 0:17:45.400 --> 0:17:47.560 We're just one machine a way to get to a 0:17:47.560 --> 0:17:49.960 point where we actually harvest more energy than what we're 0:17:49.960 --> 0:17:53.520 putting into the facility. This has been obviously a long journey. 0:17:53.560 --> 0:17:55.639 It's hard to do, terrist Really, the stars have a 0:17:55.680 --> 0:17:56.360 lot of gravity. 0:17:56.400 --> 0:17:57.119 We don't have that. 0:17:57.200 --> 0:18:00.120 We to use other means, magnets and all sorts of things, 0:18:00.160 --> 0:18:02.440 and as you've probably seen over the last few years, 0:18:02.480 --> 0:18:05.600 has been a playthrow of news inching really really close 0:18:05.600 --> 0:18:08.199 to the goal and across multiple efforts on the planet. 0:18:08.280 --> 0:18:11.040 So we're about a three year way to get tonate 0:18:11.160 --> 0:18:14.560 energy and somewhere early twenty thirties, we hopefully have a 0:18:14.560 --> 0:18:15.639 power plant online. 0:18:16.880 --> 0:18:18.840 What would be if you're able to achieve it and 0:18:18.880 --> 0:18:21.560 have a power plant? Like what is that? Is that 0:18:21.680 --> 0:18:24.919 just tremendous amount of energy with like no footprint. 0:18:26.320 --> 0:18:28.840 Yeah, it's very small footprint. So it's the highest energy 0:18:28.840 --> 0:18:31.600 density fuel you can have, by the factor of five 0:18:31.720 --> 0:18:35.879 to ten, higher than fission. Even it utilizes hydrogen or 0:18:36.040 --> 0:18:40.119 light species that are ubiquitous, So there's infinite fuel supply 0:18:40.160 --> 0:18:43.120 if you will, and you would harvest clean energy out 0:18:43.160 --> 0:18:45.720 of that at probably starting at a scale of a 0:18:45.760 --> 0:18:48.359 gas fired turbine, so something like four or five hundred 0:18:48.359 --> 0:18:51.560 makawatts per plant, and it would literally be able to 0:18:51.560 --> 0:18:53.800 distribute wherever you needed it in the grid. 0:18:54.680 --> 0:18:54.879 Is there? 0:18:55.200 --> 0:19:00.240 Can you talk about the economics surrounding this technologlogy? 0:19:00.280 --> 0:19:02.520 Who would be the who would be the users. 0:19:02.240 --> 0:19:04.520 The buyers, the developers of this technology? 0:19:05.560 --> 0:19:07.520 Yeah, so I think what we're seeing and this gets 0:19:07.600 --> 0:19:10.719 to what we just announced today. Aside from raising capital, 0:19:10.760 --> 0:19:14.080 we really have a long partnership with Google and they've 0:19:14.080 --> 0:19:16.480 been deep with us on machine learning and tools to 0:19:16.560 --> 0:19:20.520 help make this more efficient and more economic, and in fact, 0:19:20.640 --> 0:19:23.280 they would be a great first off taker for that right, 0:19:23.440 --> 0:19:27.960 all the hyperscalers. Everybody that has high energy intens applications 0:19:28.359 --> 0:19:31.080 growing at tremendous rates, right with a gap between supply 0:19:31.119 --> 0:19:35.440 and demand developing, is looking for electrons and particularly green electrons. 0:19:35.440 --> 0:19:37.679 So those would be probably the first off takers for 0:19:37.760 --> 0:19:38.520 the technology. 0:19:38.760 --> 0:19:41.680 Oh, I got to ask you, John Tucker, he likes 0:19:41.680 --> 0:19:42.119 his fusion. 0:19:42.320 --> 0:19:45.159 What sets you apart from ETR in terms of the 0:19:45.520 --> 0:19:50.639 reactor itself, the containment that's a fusion reactor or what? 0:19:51.840 --> 0:19:55.119 Yeah, so good question. So Eater and others are working 0:19:55.160 --> 0:19:57.639 on tokmacs, we actually are not. We're working what you 0:19:57.680 --> 0:20:01.959 see if you have a visual we have a compact machine, 0:20:01.960 --> 0:20:04.280 not the size of gas turbine that can make about 0:20:04.280 --> 0:20:07.679 the same output as those other plants. It's much more 0:20:07.680 --> 0:20:11.320 efficient uses smaller magnets. There's various tricks in the physics 0:20:11.359 --> 0:20:13.639 that allow you to do that, and that brings something 0:20:13.680 --> 0:20:17.240 that's more compact, cheaper to produce, of course, more economic 0:20:17.320 --> 0:20:19.240 to deploy, easier to maintain, etc. 0:20:19.520 --> 0:20:20.000 And you can. 0:20:20.560 --> 0:20:23.320 Essentially it's centralize these. We think we can build those 0:20:23.720 --> 0:20:26.840 sort of cookie cutter in a factory and deploy on site. 0:20:27.040 --> 0:20:29.000 And the other thing I should add is that sighting 0:20:29.320 --> 0:20:32.720 on this compared to the other nuclear cousin, which is fission, right, 0:20:32.840 --> 0:20:36.400 it is a lot easier. There's no meltdown possibility, there's 0:20:36.440 --> 0:20:40.240 no sort of nuclear accident of substance that people would 0:20:40.240 --> 0:20:42.280