Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm
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Speaker 1: Eastern Time on Bloomberg Radio, or watch us on YouTube
Speaker 1: search Bloomberg clovel News. We've been watching bank stocks in
Speaker 1: a big way this week due to the move up
Speaker 1: in rates, or the volatility and rates, if you will,
Speaker 1: all the Fed talk about monetary policy as a whole.
Speaker 1: Bank stocks st roughly about two percent year to day,
Speaker 1: compared with a nearly six percent drop in the S
Speaker 1: and P five hundred. Citizens Financial Group they're temp up
Speaker 1: around three percent so far this year. Joining us now
Speaker 1: is the chairman and CEO of Citizens Financial Group of
Speaker 1: Bruce van Son. He's with us in the Bloomberg Interactive
Speaker 1: Broker studio. Bruce how are you good, good, good? Um, Bruce,
Speaker 1: I just wanted are you really with every thing going on?
Speaker 1: Tell me how great? How crazy? Is it? Right? Well,
Speaker 1: it's a really interesting time to be in banking. Uh
Speaker 1: So there's a lot of things happening in the macro
Speaker 1: economic environment. But then just the level of competition, the
Speaker 1: technology changes of everything moving digital. It's just lots of challenges,
Speaker 1: which makes things fun to me. Okay, So when we
Speaker 1: you know, we have been trying to figure out what
Speaker 1: happens next. And you know, just when we thought the
Speaker 1: end of last year, we thought we had a good
Speaker 1: handle on things. Of course, then you have the Ukraine war, um,
Speaker 1: and we know the costs and we talked about the
Speaker 1: humanitarian costs, which you know there is no excuse for,
Speaker 1: but we're trying to figure out kind of where it
Speaker 1: all goes. Do you feel like you have good visibility
Speaker 1: because you play into individuals, small businesses, institutional What are
Speaker 1: you seeing from them when you I'd say that the
Speaker 1: economy is still on a very solid footing. Uh. You know,
Speaker 1: the major worry at the moment is inflation. That inflation
Speaker 1: is very harmful. Uh. It affects businesses, it affects individuals,
Speaker 1: particularly those at the lower end of the economic means. UH,
Speaker 1: and so getting inflation back under control is a very
Speaker 1: urgent task, and I think the FED now is on it. UH.
Speaker 1: They've made the first hike, and I think they've talked
Speaker 1: about being aggressive to this is. Job one is to
Speaker 1: bring this down. So UM, I think they'll hopefully engineer
Speaker 1: a soft landing. That's that's you know what what would
Speaker 1: be the desired outcome. But I think the economy has
Speaker 1: enough power that if they go about it the right
Speaker 1: way and they're measured and UH, they start to bring
Speaker 1: inflation down, this could be a very good year for
Speaker 1: the US economy for stocks ultimately could kind of bounce back.
Speaker 1: If you get some kind of stalemate or resolution in
Speaker 1: the Ukraine, UH, and the Fed does its job, it
Speaker 1: can still be quite a positive year. What what does
Speaker 1: it mean to you in terms of of, you know,
Speaker 1: how the Fed actually can pull this off. Does that
Speaker 1: mean a fifty basis point? Yeah, I think they probably
Speaker 1: should should step it up a little bit for the
Speaker 1: next meeting or two, and then kind of they can
Speaker 1: sit back and digest. If they start to see the
Speaker 1: numbers coming back down, then they could kind of go
Speaker 1: drop back to twenty five and just again take the
Speaker 1: data in and uh and even uh pause after a
Speaker 1: certain time. But you know, right now the market is
Speaker 1: projecting that the short rates go up to maybe two
Speaker 1: and a half by the end of the year. Historically speaking,
Speaker 1: that's still relatively low from an absolute standpoint, So I
Speaker 1: don't think it chokes off economic activity. It doesn't choke
Speaker 1: off all the private equity money going to work trying
Speaker 1: to get deals done. The pipelines for deals are still
Speaker 1: very strong, and people see that. The FEDS telegraphed what's happening.
Speaker 1: But what's the biggest part of your business deposits loans?
Speaker 1: Individual loans business, Well, the kind of overall mix of
Speaker 1: our loan book is about fifty four percent consumer and
Speaker 1: forty six percent commercials, so we're pretty well balanced between
Speaker 1: serving individuals. I'd put small businesses in with individuals, and
Speaker 1: then the commercial side. We we cover companies, middle market
Speaker 1: companies from twenty five million up to mid corporate companies
Speaker 1: with three billion in revenues, So that's that's been our focus.
Speaker 1: What's demand among those two sides of the business in
Speaker 1: terms of just business overall loan demand or and I'm
Speaker 1: also curious about deposits, especially among individuals. Are they higher
Speaker 1: than normal or yeah, deposits are still elevated given all
Speaker 1: the liquidity that the FED pumped into the system and
Speaker 1: that the government pushed out into into the economy. So um,
Speaker 1: I think. You know, most banks are sitting with relatively
Speaker 1: low loan to deposit ratios and we're been waiting for
Speaker 1: loan demand to pick up. We are seeing that our
Speaker 1: rates to be able to charge to make more money
Speaker 1: with the higher rates. So it looked going into the
Speaker 1: year that all that was lined up very well because
Speaker 1: the loan growth and fourth quarter was quite high, both
Speaker 1: on the consumer side and on the commercial side. Companies
Speaker 1: starting to draw down on their lines again so they
Speaker 1: could make investments in inventories and plant and equipment to
Speaker 1: meet the higher demand that they saw coming. So those
Speaker 1: were all good signs. We haven't really seen an interruption
Speaker 1: in that yet, so the first quarter it's still held
Speaker 1: in pretty good. But again back to the macro, the
Speaker 1: fear is if the Fed uh moves more aggressively or
Speaker 1: if people start to pull back and say, well, I
Speaker 1: don't know what's going to happen, that could cool that off.
Speaker 1: A little bit, but at this point I'm going to
Speaker 1: stay optimistic and say that won't happen. Bruce. I want
Speaker 1: to go back to something that you said a little
Speaker 1: earlier at the start of our discussion, talking about inflation
Speaker 1: and hurting the consumer at the lower end of the
Speaker 1: income spectrum. What do you hear from small businesses, from
Speaker 1: medium sized businesses, middle market businesses about inflation and the
Speaker 1: effect that it's having on their costs. It depends on
Speaker 1: the nature of the business. Um. I think many companies
Speaker 1: have been able to pass through the inflation, so they're
Speaker 1: maintaining their margins. Uh. And you know, I'd say the
Speaker 1: bigger the company, maybe the bigger capacity to do that.
Speaker 1: Maybe not always as easy for smaller businesses, but even
Speaker 1: small businesses like restaurants. What what's the Have you been
Speaker 1: out and had a stake lately? Yeah, exactly. I mean
Speaker 1: there's the higher costs for for labor and for the supplies,
Speaker 1: the meat and other ingredients has gone up, so so
Speaker 1: many people are able to pass that through at this point,
Speaker 1: What about for you and in your firm are you
Speaker 1: are you seeing higher costs? So we've had to take
Speaker 1: people more. One of the nice things as an offset
Speaker 1: is those higher rates mean we're going to start repricing
Speaker 1: our loans faster than we repriced deposits, and so that
Speaker 1: additional income allows us to cover some of that higher
Speaker 1: cost of our people. At this point. The other thing
Speaker 1: that we constantly are seeking to do is to look
Speaker 1: for ways to run the bank more efficiently, and so
Speaker 1: we're trying to substitute capital. Can you use artificial intelligence
Speaker 1: or can you use bots to automate some tasks that
Speaker 1: used to require people that we're probably less uh enriching
Speaker 1: from a from a kind of growth standpoint, the jobs
Speaker 1: that menial things that that get in the way of
Speaker 1: people enjoying their careers. Can we can we kind of
Speaker 1: take those off the table and allow people to do
Speaker 1: some of the more higher value add stuff. We're talking
Speaker 1: with Bruce beans On, chairman and CEO of Citizens Financial Group.
Speaker 1: What what is the importance of still having branches like
Speaker 1: k I'm amazed. I'll even walk in like the city
Speaker 1: branch in the corner and it's like it's probab We
Speaker 1: just we just uh you know, made a big play
Speaker 1: to get into New York metro by buying HSBC's East
Speaker 1: Coast branches and then buying Investors Bank, which is we
Speaker 1: just got approval on this week from the FED, so
Speaker 1: that'll close shortly, but that'll give us a combined two
Speaker 1: branches in the New York metro area, top ten deposit
Speaker 1: market share, a million new customers. People say, I'm saying
Speaker 1: you're all in on branches. All right, We're still in
Speaker 1: on branches. So you say, well, Bruce, you know you
Speaker 1: also launched a digital bank, so you have citizens access,
Speaker 1: is doing business in fifty states. Why do you need branches? Uh? Interestingly,
Speaker 1: are most satisfied customers value all our distribution channels. So
Speaker 1: if you have a branch network where you can offer advice,
Speaker 1: you have a digital channel where you can people use
Speaker 1: their phone and bank on their phone and make check
Speaker 1: deposits and check balances. So it's convenience. You're offering convenience.
Speaker 1: And then on the weekend that branches aren't open and
Speaker 1: you have a question, you can call the contact center.
Speaker 1: If you have all those channels working at a high level,
Speaker 1: seamlessly together, that's when you have a really satisfied customer.
Speaker 1: So it's help me channel like retail. Yes exactly, that's
Speaker 1: what's happening. Yeah. I just interviewed earlier today Jason Wilk,
Speaker 1: the CEO of Dave, it's three billion dollar market cap
Speaker 1: fintech startup. But the idea is to displace banks the
Speaker 1: same way that Chime is looking to do that. How
Speaker 1: do you make sure that these you know, digital first
Speaker 1: fin techs don't take customers from you? Well, I think, um,
Speaker 1: there's lots of examples you mentioned those. There's uh the
Speaker 1: payments companies are trying to take revenue streams away from banks.
Speaker 1: I think what banks have is a full products set
Speaker 1: and an ability to be an individual's trusted advisor on
Speaker 1: their life's journey. So that's where we're trying to position
Speaker 1: ourselves that you should open your bank account at Citizens
Speaker 1: and uh, look at all the great things we can
Speaker 1: do for you. We can give you wealth advice, we
Speaker 1: can figure out how to refinance your student loans. We
Speaker 1: can help you buy your first house. We can give
Speaker 1: you a home equity line of credit when that's an
Speaker 1: advantageous way to borrow. So uh so banks that can
Speaker 1: give you that advice to make you more successful on
Speaker 1: your financial journey. I think that's hard for some of
Speaker 1: these uh startups to compete against. And and they can
Speaker 1: go in and uh, they can offer since they're they're
Speaker 1: kind of a lot of times the profit motive is relaxed,
Speaker 1: so they can uh offer services at below cost to
Speaker 1: try to gain customers. But ultimately can they really deepen
Speaker 1: that customer relation and turn those into profitable relationships is
Speaker 1: still an open question. So the market is valuing them
Speaker 1: on their growth rates, and so they're all pushing really
Speaker 1: hard to just acquire customers. Many of these companies aren't profitable,
Speaker 1: and the question is what what's the ultimate outcome for them?
Speaker 1: But ultimate outcomes you want to make sure you're bringing
Speaker 1: in younger customers right that you hold on grab them
Speaker 1: young and do and and we are. So one of
Speaker 1: the things we're focused on mass affluent young professionals. One
Speaker 1: of our lead hook products there is student loan financing
Speaker 1: for those people listening. If you're carrying some high costs
Speaker 1: student debt many are. Unfortunately, there's opportunities to consolidate that
Speaker 1: into a single loan at a lower interest rate and
Speaker 1: we put money back in your pocket. Uh and so
Speaker 1: so that's allowed us to gain a lot of market
Speaker 1: share and get younger in our customer base. Quick question
Speaker 1: Home buying is it happening slowing down just quickly? Home
Speaker 1: buying is still uh in good shape. There's people who
Speaker 1: are kind of figuring out the next phase of their
Speaker 1: life and they're moving around a bit, and so I
Speaker 1: think the purchase market's going to stay strong this year.
Speaker 1: Thank you so much, great interview, and thanks so much
Speaker 1: for giving us a bunch of time. Bruce Fanson, He's
Speaker 1: chairman and chief executive officer of Citizens Financial Group. Here
Speaker 1: in our Interactive Broker Studio, you're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic
Speaker 1: on Bloomberg Radio. So a story online of Bloomberg Business
Speaker 1: Week on the Bloomberg terminals, but Hong Kong and how
Speaker 1: it went from COVID zero to one of the world's
Speaker 1: deadliest outbreaks. To him, how did this happen? Well? Joel
Speaker 1: Webber is editor at Bloomberg Business Week. Keep with us
Speaker 1: in the Bloomberg Interactor Broker Studio. Ian Marlow is Asia
Speaker 1: Government senior reporter for Bloomberg News. He joins us on
Speaker 1: the phone from Canada. The story by Ian Marlow and
Speaker 1: surely Jao you can read in story on the Bloomberg
Speaker 1: terminal and at Bloomberg dot com slash business Week, Joel,
Speaker 1: when we think about Hong Kong and during the course
Speaker 1: of the pandemic, oftentimes we think about how good of
Speaker 1: a job it has done in controlling the spread of
Speaker 1: the outbreak. It was all well and good until omicron
Speaker 1: COVID zero worked really really well for a long time
Speaker 1: in Hong Kong, and then all of a sudden it didn't.
Speaker 1: And what's really surprising about Ian's reporting in this story
Speaker 1: is it shows you know, just how contagious something like
Speaker 1: omicron can be. They had some mechanisms in place, and
Speaker 1: they basically were overwhelmed by them because the virus um
Speaker 1: spread so quickly and became incredibly lethal. Because there was
Speaker 1: also some lackadaisical qualities that I think we're bred and
Speaker 1: while a lot of people never got vaccinated, there's distrust
Speaker 1: between citizens and state. Um that or you probably unique
Speaker 1: to Hong Kong. Um. And you know Ian from the
Speaker 1: outside looking and um, you know you you live in
Speaker 1: Hong Kong, You're you're stuck in Toronto, can't get back yet, um.
Speaker 1: And yet this, you know, it has been a devastating
Speaker 1: impact on especially the elderly community in Hong Kong. What
Speaker 1: have you? What did you learned outside looking in during
Speaker 1: the course of reporting the story. Yeah, I think the
Speaker 1: one thing that that really struck me was just how
Speaker 1: little the government had done to prepare for what, to
Speaker 1: the rest of us seemed like the inevitable, the fact
Speaker 1: that the virus was going to come in. It looked
Speaker 1: like they were basically overconfident that there was a case
Speaker 1: of hubris. And we had seen this kind of play
Speaker 1: out across a couple of different so COVID zero or
Speaker 1: elimination uh places like in Taiwan, and in New Zealand,
Speaker 1: uh and and in the mainland right now, which is
Speaker 1: also facing a big outbreak. Uh. But I think everyone
Speaker 1: sort of assumed that at least the government might have
Speaker 1: been doing something ramping up isolation facilities for example, or
Speaker 1: uh you know, having some kind of contingency plan in place, uh,
Speaker 1: you know, for once cases started rising beyond the capacity
Speaker 1: of these really owners travel restrictions and contact tracing regimes
Speaker 1: that had kept the virus out for so long, because
Speaker 1: of course they had these contingency plans in place in
Speaker 1: general for pandemics, because of their experience with stars about
Speaker 1: twenty years ago. So it was pretty shocking I think
Speaker 1: for for the city to go from a place that
Speaker 1: was totally calm, had spent two years basically dodging the
Speaker 1: worst of the pandemic uh to then end up in
Speaker 1: a style outbreak UHO when there's vaccines that are you know,
Speaker 1: fully available for everyone. So I think that was that
Speaker 1: was shocking, I think for people in Hong Kong, and
Speaker 1: can you explain what's like there for people who haven't
Speaker 1: been to Hong Kong, For people haven't spent time. They're
Speaker 1: very densely populated. A lot of people live in really
Speaker 1: really small homes. And I mean when I say small,
Speaker 1: I mean the way you write about them, as you
Speaker 1: describe them as coffins. Yeah, exactly. I mean in Hong
Speaker 1: Kong the government refers to them UH as subdivided housing units,
Speaker 1: but really we're talking about a bed with some stuff
Speaker 1: strung up around it. There's a lot of uh inequality
Speaker 1: in Hong Kong. It's obviously the one of the most
Speaker 1: expensive housing markets in the world. A lot of people
Speaker 1: in a lot of the poorest neighborhoods are crammed into
Speaker 1: places that just will not work with a mainland China
Speaker 1: style lockdown, and so that was one of the reasons
Speaker 1: why the government from the beginning was kind of reluctant
Speaker 1: to really impose the kind of harsh measures that everyone
Speaker 1: is familiar with from Wuhan and and other Chinese cities.
Speaker 1: But but once on the cron got in, Uh, this
Speaker 1: isn't a place really where you can even really isolate
Speaker 1: at home. I mean, uh, you know, the high rises
Speaker 1: of New York and other American cities are one thing,
Speaker 1: but I mean Hong Kong, everyone is sort of packed
Speaker 1: into ten percent of the land maps one of the
Speaker 1: densest cities on Earth, and so there was a lot
Speaker 1: of what they called, you know, in epidemologicals, are in
Speaker 1: vertical transmission. People were infecting their neighbors up and down. Uh.
Speaker 1: There were you know, a bathroom and kitchen exhaust fans
Speaker 1: that were kicking the virus all around these really densely
Speaker 1: populated high rises. And once on the cron got in, Uh,
Speaker 1: it really raced like wildfire through the city and there
Speaker 1: was a race kind of whackable locking down all these
Speaker 1: high rise towers. At one point early on in the
Speaker 1: in the pandemic, my building was locked down entirely because
Speaker 1: there was a single COVID case UH in one of
Speaker 1: the two towers UH and the cops pulled up outside
Speaker 1: lost everyone in until everyone had been tested and everyone
Speaker 1: tested negative. So this is a city that really took
Speaker 1: everything very seriously. But once the cases started, you know,
Speaker 1: going from a handful to you know, tens of thousands
Speaker 1: a day. At one point it was well over fifty
Speaker 1: thousand a day in a city that had spent most
Speaker 1: of the last year at zero hate to day. There
Speaker 1: are measures just could not keep up with what was happening,
Speaker 1: and healthcare system just utterly and totally collapsed. And how
Speaker 1: much of a problem too, is I mean, obviously sounds
Speaker 1: like a policy failure. We talked about you right about
Speaker 1: the government enforcement of the new National Security Law and
Speaker 1: how that has effectively banned political opposition. And I think
Speaker 1: about you know, lack of access to maybe you know,
Speaker 1: more global media to really understand this global pandemic. How
Speaker 1: much of that is also to blame. Yeah, I think
Speaker 1: there's a large element of this preventable outbreak that was political.
Speaker 1: Hong Kong has adopted a mainland style COVID zero approach
Speaker 1: to total elimination of the virus, So there was no
Speaker 1: tolerance for any cases whatsoever, even when vaccines were uh
Speaker 1: you know, being administered throughout the city. So this was
Speaker 1: a problem from the very beginning that had uh you know,
Speaker 1: political routs. The last two years of the pandemic had
Speaker 1: basically been two years of Beijing taking unprecedented political control
Speaker 1: over over Hong Kong in the in the wake of
Speaker 1: those democracy protests that everyone saw in twenty nineteen, which
Speaker 1: only really dissipated once social distancing measures came down because
Speaker 1: of the pandemic. So even at the city was uh
Speaker 1: you know, preparing for this, uh you know, preparing for
Speaker 1: the pandemic and putting in all these measures, Beijing was
Speaker 1: taking more control, and what was generally considered a very
Speaker 1: efficient technocratic, uh you know, free market government just became
Speaker 1: more and more under this way of China. All Right,
Speaker 1: we gotta run. Hey, listen, great stuff, Ian, Thank you
Speaker 1: so much. Ian Marlowe of course at Bloomberg News until Webber,
Speaker 1: editor of Bloomberg Business Week. This is Bloomberg Business Week
Speaker 1: with Carol Measure and Bloomberg Quick Takes. Tim Stinovic on
Speaker 1: Bloomberg Radio. We did have a bunch of headlines coming
Speaker 1: out of Europe. I feel like, Tim, I I can
Speaker 1: barely keep up, you know, I can't even there. And
Speaker 1: it doesn't just have to do with the war, but
Speaker 1: it also has to do with the rising COVID cases
Speaker 1: in some parts of the world. Uh. And of course
Speaker 1: much of the West focused on there as President Biden
Speaker 1: continues to make his way across the across the continent. Right.
Speaker 1: And you know, I've talked about just like one of
Speaker 1: the headlines out of Europe that have really caught us
Speaker 1: is about the possible use by Russia of weapons of
Speaker 1: mass destruction and nuclear weapons. So we kind of have
Speaker 1: I feel like a perfect guest to tackle it all.
Speaker 1: And so let's bring in Crystal Watson, Senior scholar at
Speaker 1: the Johns Hopkins Center for Health Security at the Bloomberg
Speaker 1: School of Public Health, the Johns Hopkins Bloomberg School of
Speaker 1: Public Health that is supported by Michael or Bloomberg, the
Speaker 1: founder of Bloomberg LP and Bloomberg Philanthropies. Dr Watson, really
Speaker 1: good to have you with us. I do want to
Speaker 1: get to COVID in just a few minutes, but uh,
Speaker 1: a little earlier in our program. Um, Carol and I
Speaker 1: were talking about Yen Stoltenberg of NATO and what he
Speaker 1: said with regard to chemical and biological weapons. And this
Speaker 1: is part of your specialty at the Johns Hopkins Center
Speaker 1: for Health Security at the Bloomberg School of Public Health. UM,
Speaker 1: explain what's at risk here if Russia were to use
Speaker 1: chemical weapons. Yeah, thanks for having me on. I think, um,
Speaker 1: we have seen the devastation that chemical weapons can cause,
Speaker 1: and and most of the world has committed to not
Speaker 1: using chemical weapons to via international treaty. UM. So I
Speaker 1: think that it will put a lot of things up
Speaker 1: in the air if Russia did choose to use chemical
Speaker 1: weapons UM against the Ukrainian people, because they're they're definitely
Speaker 1: their norms against this, their heart prohibitions against the use
Speaker 1: of chemical weapons. UM. But we also have the complicated
Speaker 1: history of with what history, with what's happened in Syria
Speaker 1: and the lack of our in terms of a red
Speaker 1: line for Syria. I think that the response will be complicated. Well,
Speaker 1: can you can you define biological and chemical weapons for
Speaker 1: our audience and help us just understand what they are
Speaker 1: and what they do. Yeah, So, biological and chemical weapons
Speaker 1: are two separate categories. Of unconventional weapons UM that are
Speaker 1: both banned by international treaty and have signatories from most
Speaker 1: countries around the world. UM Biological Both of these weapons
Speaker 1: would be UM the use of a biological agents or
Speaker 1: chemical agents in a way that is intended to harm
Speaker 1: individuals or use on a larger scale potentially as well.
Speaker 1: And so UM any any chemical or biological agent that
Speaker 1: is used in that way can be considered UM banned
Speaker 1: under the Biological Weapons Convention or the Chemical Weapons Convention.
Speaker 1: So what do like, where are we in terms of
Speaker 1: like I understand, you know, weapons to counteract missile attacks
Speaker 1: and so and so forth. You know what realistically, like
Speaker 1: do you guys talk about it? John's Hopkins when it
Speaker 1: comes to what we might not need to do if
Speaker 1: there is some kind of attack, or what can we
Speaker 1: do ahead of time to kind of protect ourselves. What
Speaker 1: are what are the smart conversations we need to be
Speaker 1: having the realistic ones. I think, UM, we need to
Speaker 1: talk about what would actually be the goals of of
Speaker 1: Russia using these weapons against the Ukrainian people. UM. I
Speaker 1: think with there's a higher likelihood of use of chemical
Speaker 1: weapons because of the history of use, the recent history
Speaker 1: of use by Russia and our support of youth in
Speaker 1: Syria against the Syrian people. So looking at what what
Speaker 1: that would actually um do for prutent efforts, I think
Speaker 1: is will help us give an understanding of the likelihood
Speaker 1: of their use. I do think it's less likely that
Speaker 1: biological weapons can be will be used because they're they
Speaker 1: provide less of a strategic advantage UM than chemical weapons might.
Speaker 1: I hope that neither of them are really on the table,
Speaker 1: But we have seen a history of violations by by
Speaker 1: Russia of both of these treaties, and so I think
Speaker 1: we need to plan for um the case that they
Speaker 1: might be used. So we've only got about a minute
Speaker 1: and a half left here. I mean, all of this
Speaker 1: is so heavy, Uh, just when we think, you know,
Speaker 1: two years were coming out of the pandemic and and
Speaker 1: and you know, we're not in Ukraine and or we're
Speaker 1: not a refugee, or we haven't lost family members, so
Speaker 1: we know how difficult UM this this has been when
Speaker 1: it comes to the pandemic. What's front and center for you?
Speaker 1: What are you thinking about in terms of these sub
Speaker 1: variants macron some sub variant. Are you anticipating another spike?
Speaker 1: We just did a story from Business Week about what's
Speaker 1: going on in Hong Kong. Right now, we're watching what's
Speaker 1: going on overseas. UM. Are you anticipating we're going to
Speaker 1: see some kind of spike here and just got about seconds? Sure? Yeah,
Speaker 1: we are seeing in Europe and it may be contributing
Speaker 1: to some of the spikes in in such as an
Speaker 1: in Hong Kong and in South Korea. UM. This is
Speaker 1: the B A to sub variant of omicron, and so
Speaker 1: we are starting to see some upticking cases in New
Speaker 1: York for example, UM and Texas in the US and
Speaker 1: maybe a few other places and some indication in wastewater
Speaker 1: surveillance that we may be seeing UM more virus circulating
Speaker 1: and wastewater. So I think we have to prepare that
Speaker 1: we may see an additional omicron surge with the B
Speaker 1: I two subpariant. What is that just in the last
Speaker 1: thirty seconds we have with you, Dr Watson, What does
Speaker 1: that surge look like? Should we be prepared for something
Speaker 1: that we saw in December in January? I think it
Speaker 1: will in terms of severity, will probably look similar to
Speaker 1: the prior omicron surge. UM. Hopefully it won't be as high,
Speaker 1: but we still have a large proportion of the populations
Speaker 1: who haven't been infected by omicron so I we have
Speaker 1: seen in Europe, for example, that it has been a
Speaker 1: large She's blowed well. We are so grateful that we
Speaker 1: got some time with you. Dr Crystal Watson. She is
Speaker 1: Senior Scholar at the Johns Hopkins Center for Health Security
Speaker 1: at the Johns Hopkins Bloomberg School of Public Health. On
Speaker 1: the phone from Baltimore, of course, supported by Michael R. Bloomberg,
Speaker 1: founder of Bloomberg Philanthropies and Bloomberg LP Carol Master, Tim Stanovic.
Speaker 1: We are Bloomberg Radio. I'm road Michael, Yeah, but you
Speaker 1: let me drive? No, no, no, all right, please Gravels.
Speaker 1: I don't want to drive. It's a good question. Drive
Speaker 1: this ride to the close on Bloomberg Radio. All right, everybody,
Speaker 1: just about ten minutes left in the trading session on
Speaker 1: this Thursday, on this Friday's even we're seeing an uptick.
Speaker 1: We've been seeing some buying into the clothes, as Charlie mentioned,
Speaker 1: pretty much at our best levels of the session. And Tim,
Speaker 1: once again, we're seeing some tech aut performance here. Help
Speaker 1: us make sense of it. Hillary Kramer, President and Chief
Speaker 1: Investment Officer at a n G Capital Research. Hillary Kramer
Speaker 1: is also the author of Game Changer Investing, How to
Speaker 1: Profit from Tomorrow's billion dollar trend. She joins us once
Speaker 1: again on the phone from New York City, So help
Speaker 1: us make sense of it, Hillary, It's it's we're just
Speaker 1: I mean, if you if you go back to where
Speaker 1: we were a little over a week ago, it's a
Speaker 1: completely different mood in the market. Yes, we're really riding.
Speaker 1: We're really riding ourselves up into that end of the quarter.
Speaker 1: It's it's window dressing for the most part. And all
Speaker 1: them easy money's pretty much Jim been made here already.
Speaker 1: What do you mean, it's just window dressing end of
Speaker 1: the quarter. All of the fund managers, you know, they
Speaker 1: were miserable early on, and this is an opportunity just
Speaker 1: the group think with just all buy. And of course
Speaker 1: you have to combine it with some reality, which is
Speaker 1: for example, like Intel and then video today. Yeah, performance, right, Well,
Speaker 1: it's funny that you say that, right, so that when
Speaker 1: we open up or check out our quarter list, aiments
Speaker 1: were like, oh yeah, they were good, they were smart,
Speaker 1: they were in some of the top performers. Right, that's
Speaker 1: some of the window dressing. That's going on well longer
Speaker 1: term now, you know, Hillary, we are at this point,
Speaker 1: this this UM point where we're trying to figure out
Speaker 1: are we topping out on yields? Are we bottoming out
Speaker 1: on equity selling? Is it too early to make that call?
Speaker 1: In your view, it is too early because we have
Speaker 1: the federal reserve next month, and we have earnings, and
Speaker 1: those two are the big factors. And Carol, I'm always
Speaker 1: saying Mark is going to go up. You know, we're debarish, bullish,
Speaker 1: But in this particular case, we really have to see
Speaker 1: what happens with earnings up to combined earnings for hundred
Speaker 1: looks to be about two thirty dollars, and we'll see
Speaker 1: if we're really going to make it and uh and
Speaker 1: what those CEOs have to say about the supply side.
Speaker 1: But we but we still have revenue growth right like
Speaker 1: it's I mean, the economy is still growing um and
Speaker 1: we still have revenue growth. We just had on UM
Speaker 1: the CEO of Citizens Financial Group. You know, they are
Speaker 1: publicly held bank, twenty billion market camp. They just made
Speaker 1: some acquisitions and branches here in New York City, and
Speaker 1: he had optimism about the outlook even the housing market
Speaker 1: um and thinking that in the face of what he
Speaker 1: expects and things should be a more aggressive fed. Well,
Speaker 1: we have revenue growth because we have such high inflation
Speaker 1: and there's so much money slashing around, and people have
Speaker 1: made a lot of money, and a group of people
Speaker 1: that didn't make money previously, the renovators, the contractors, the plumbers,
Speaker 1: the electricians, so they've made so much money they're spending.
Speaker 1: That's a lot of why revenue growth is in the picture.
Speaker 1: And the banks are very happy because they've really taken
Speaker 1: better care of their balance sheet. Uh, going into anything
Speaker 1: that could be scary looking if you're looking over a cliff.
Speaker 1: So why do we need to keep an eye on
Speaker 1: in terms of earnings as the next catalyst? You said that,
Speaker 1: you know, that's really what we need to be focused on.
Speaker 1: But what are the red flags or or what are
Speaker 1: you really going to try to watch to help you
Speaker 1: understand how these companies are are taking this inflationary environment.
Speaker 1: It's the industrials and it's and it's the banks and
Speaker 1: what they are going to tell us. Yes, those those
Speaker 1: are the two that I'm going to really have my
Speaker 1: eye on. And as we know, the banks come first. Yeah,
Speaker 1: JP Morgan right April thirteen, six in the morning. It's
Speaker 1: just around the corner. Having said that, in terms of
Speaker 1: the banks, you like Goldman Sacks. I love Goldman Sachs
Speaker 1: and I have for a while Carol Goldman Sachs. It
Speaker 1: is a bargain at two point four percent of it
Speaker 1: in yield right, it's certainly way off of it's fifty
Speaker 1: two week high and can really benefit in a market
Speaker 1: that has volatility because in many ways they're able to
Speaker 1: use their balance sheet and they're able to use it
Speaker 1: in a smart way that a commercial bank of JP
Speaker 1: Morgan just can't do. Golden Stacks is very stealth. It's
Speaker 1: about a hundred dollars almost or just about ten bucks
Speaker 1: shy hundred dollars ninety dollars off of its fifty two
Speaker 1: week HI, so it has come way down. Another particularly
Speaker 1: that you have is Newell Brands UH. It's the parent
Speaker 1: company of Rubber Made, as well as Coleman camping Um
Speaker 1: supply chain concerns. That's why the stock got hit so
Speaker 1: badly and why Newell n w L is trading at
Speaker 1: twelve times this year's earnings YO dollar stock. But they
Speaker 1: actually had a strong fourth quarter and the CEO has
Speaker 1: said he's not worried about the supply chain issues, and
Speaker 1: so much of their money comes from Schwebs Canada, Dry
Speaker 1: Sun Kiss. They made Clomado. There's a tomato. Yeah, I
Speaker 1: don't know. It's a clam juice and tomato juice. That
Speaker 1: sounds disgusting. It was, you know, my dad had actually
Speaker 1: worked on the advertising paid for that. That's how I
Speaker 1: know about it. Yeah, is it good? I don't really know.
Speaker 1: What does dad say? I was like, you know, pretty young.
Speaker 1: Then another name that you like is PayPal. Talk to
Speaker 1: us about that one. Well, PayPal, certainly it may not
Speaker 1: be there this year. Yeah, PayPal just got slammed. So
Speaker 1: it was a bargain at eight four dollars in it,
Speaker 1: but at one fifteen we're still talking a bargain because
Speaker 1: PayPal has just become the standard. Plus they have Venmo,
Speaker 1: they have Zoom, they have something called Chargehound. They're really
Speaker 1: and they're finding niches in the market. So what's the
Speaker 1: problem the fires low expectations there? The concern was that
Speaker 1: pap that well, much of the concern is that JP
Speaker 1: Morgan Chase getting into the business by having Zell for example,
Speaker 1: you know what the Apple going to do. But it
Speaker 1: still seems that the Venmo PayPal brands are strong. Interesting.
Speaker 1: I was just looking at the stock price, right, so
Speaker 1: I'm still thinking about Clamato. I am certainly not PayPal shares,
Speaker 1: by the way, up about a buck today. If you
Speaker 1: had to put some new money to work just today,
Speaker 1: where would you do it or where are you putting
Speaker 1: it together? Is it these names you just talked about?
Speaker 1: It would be it would be new old for sure
Speaker 1: to get that to it in yield, and because it's
Speaker 1: a cheap stock, and then people are still like the
Speaker 1: rubber Maid and it's been around forever, and ingredient is
Speaker 1: incredibly undervalued. That's your starches and your sugars and uh.
Speaker 1: And for me, that's one that at seven dollars. Uh,
Speaker 1: it's training at twelve times this year's earnings and a
Speaker 1: three percent of it in yield. That's what I'm looking for.
Speaker 1: I'm looking for safety. And then I'm taking some flyers
Speaker 1: out there, not not going into Tesla. I know electric vehicles,
Speaker 1: electric is where to be, so I'm looking at some
Speaker 1: of these small guys like them. The easy lightning emotors
Speaker 1: are the electric Wait, all right, we gotta run, Hey, listen.
Speaker 1: Great to talk names with you, as always are thanks
Speaker 1: to Hillary Cram where she's president chief investment Officer at
Speaker 1: A and G Capital Research. Thanks for listening to Bloomberg
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