Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim
Speaker 1: Fox along with my co host Lisa Abramowitz. Each day
Speaker 1: we bring you the most important, noteworthy, and useful interviews
Speaker 1: for you and your money, whether you're at the grocery
Speaker 1: store or the trading floor. Find the Bloomberg P L
Speaker 1: Podcast on iTunes, SoundCloud and at Bloomberg dot com. I
Speaker 1: want to take a look at how much it's going
Speaker 1: to cost this Thanksgiving? Uh, thinking about buying perhaps a
Speaker 1: organic turkey. Jennifer Bartashes is over here. She's a of
Speaker 1: Bloomberg Intelligence US food and drug retail analysts, speaking to
Speaker 1: us from Prinston, New Jersey. Jennifer, what are you cooking
Speaker 1: this this h holiday? Well, I am cooking turkey. Um,
Speaker 1: But I'm actually cooking part of a turkey, and we
Speaker 1: have a small household, so we're not interested in a
Speaker 1: lot of leftover. But it's cheaper this year. It is, um,
Speaker 1: you know, definitely. Food food deflation is taking a toll
Speaker 1: um And on average, Thanksgiving is about three point four
Speaker 1: percent less expensive this year than it was last year. UM.
Speaker 1: And so that that's good news for consumers. Well, so
Speaker 1: where is the decline coming from? Because the actual turkey
Speaker 1: itself is not necessarily cheaper, right exactly. Um, But what's
Speaker 1: the decline is really coming from all the other typical
Speaker 1: items that you would think of for your holiday dinner,
Speaker 1: so um, stuffing, green beans, you know, uh, you know, potatoes,
Speaker 1: things like that. Um. And what's happening is that in
Speaker 1: a deflationary environment, all of the retailers are trying to
Speaker 1: get as many sales as possible, um, and so they're
Speaker 1: discounting all of those common items, and so there's a
Speaker 1: little bit of a price war that's happening that's driving
Speaker 1: those prices lower. What what product is sort of the
Speaker 1: focal point for some of these price wars? Um, well,
Speaker 1: anything you know, obviously aside from the turkey, which which
Speaker 1: is a little bit more expensive this year. Um. You
Speaker 1: see everything from you know, the instant stuffing to cans
Speaker 1: of you know, cream of mushroom soup, pretty much all
Speaker 1: the standard basic items that most people buy. Um. Almost
Speaker 1: every retailer has some sort of promotion happening on a
Speaker 1: lot of those core items. But it seems like there's
Speaker 1: something of a divergence between lower cost grocers and the
Speaker 1: higher end sort of organic focused UH stores. Right. I
Speaker 1: mean it seems like prices are going up for the
Speaker 1: more kind of artists, artisanal producers. It's true, especially once
Speaker 1: you get into more more of the organic type of items,
Speaker 1: that prices are going up a little bit more. Um
Speaker 1: And And what's what's happening is that there are more
Speaker 1: and more stores that are selling organic products these days. Um.
Speaker 1: But the the supply is not necessarily expanding at the
Speaker 1: same rate as a number of people that are starving
Speaker 1: those goods, um. And so that that gives it an
Speaker 1: inherently a little bit of extra inflation or or higher prices,
Speaker 1: as people have to pay a little bit more to
Speaker 1: have the goods in their stores, and then they pass
Speaker 1: it on to consumers. So when you look at retailers
Speaker 1: like Whole Foods, UM, fresh Market, Fairway, Um, these are
Speaker 1: all retailers that have lean more heavily in that organic
Speaker 1: and natural space. And as a result, their Thanksgiving basket
Speaker 1: was a little bit higher this year's than the average supermarkets. Yeah,
Speaker 1: meaning that it was more expensive. Right. So I think
Speaker 1: you had some information that the basket at Whole Foods
Speaker 1: would cost a hundred and thirty four dollars, that's for
Speaker 1: twenty items. Compared with one and seventy eight cents at
Speaker 1: Fairway at nine seven dollars a Trader Joe's and nineties
Speaker 1: six dollars and forty cents at fresh Market. Can we
Speaker 1: talk a little bit about why there is price deflation
Speaker 1: in some of these grocery uh products. Well, you know,
Speaker 1: the the the price deflation. Yeah, this is a pretty
Speaker 1: small basket, you know when you're talking about very specific
Speaker 1: things for Thanksgiving, But the price deflation is is really coming.
Speaker 1: It's a it's an overall industry trend where you're seeing
Speaker 1: deflation across the board and it's been a sustained period
Speaker 1: of deflation. UM. And some of that is coming from
Speaker 1: deflation in produce UM. Some of that is coming from
Speaker 1: deflation in proteins like beef and eggs and chicken UM,
Speaker 1: and in dairy as well. UM. And so when that happens,
Speaker 1: it sort of bleeds through and affects all of the
Speaker 1: you know, all of the retail prices within the industry.
Speaker 1: Is it just that we're getting that much more efficient
Speaker 1: at producing food? Um, That's that's that's part of it. UM.
Speaker 1: You know, there's there's there's always a cycle of supply
Speaker 1: and demand with regards to you know, what's produced UM,
Speaker 1: and so you know, you go through limited supply producers
Speaker 1: that overproduced UM, and then you go through, you know,
Speaker 1: a period where there's there's a little too much in
Speaker 1: prices come down UM, and that's kind of a normal fluctuation.
Speaker 1: But we have had kind of a sustain period where
Speaker 1: UM prices have been coming down or staying well UM
Speaker 1: for quite a while. Jennifer Batasha's thank you so much
Speaker 1: for being with us. Jennifer Patasha's US food and drug
Speaker 1: retail analyst for Bloomberg Intelligence, speaking with us from Princeton,
Speaker 1: New Jersey. I'm Lisa Bramwood's my co host, Pim Fox
Speaker 1: is on vacation. This is Bloomberg. I want to learn
Speaker 1: about what fund managers are thinking right now. A number
Speaker 1: of money managers that we spoke to since President elect
Speaker 1: Trump won the election, they've said that they have not
Speaker 1: changed the way that they structured their portfolios significantly or
Speaker 1: their strategies. But perhaps our next guest disagrees. I want
Speaker 1: to bring in David Kudla, CEO and chief investment strategist
Speaker 1: of Mainstay Capital Management, which oversees about two billion dollars UH.
Speaker 1: David Thank you so much for being with us. Good morning,
Speaker 1: Good morning. So have you changed your base case outlook
Speaker 1: and the way that you invest since the election? Absolutely? Uh.
Speaker 1: You know, when we look at it, we look at
Speaker 1: a Trump presidency with a still Republican controlled Congress, but
Speaker 1: specifically with the Trump presidency, a see change in the
Speaker 1: investment landscape. Um. We've already seen what's happened with bond
Speaker 1: yields in the last two weeks, with the prospect of
Speaker 1: tax policy and infrastructure spending, pro growth policies, regulation regulations
Speaker 1: being rolled back, and you know, we see the that
Speaker 1: there is a path here for rates headed higher. The
Speaker 1: Fed will have cover to raise rates even faster than
Speaker 1: maybe they would have. UM. And we've seen the markets
Speaker 1: performing well in specific sectors in this regard that I
Speaker 1: think investors need to take key to this. It's very
Speaker 1: important for the coming weeks and months in their portfolio. Well, so,
Speaker 1: how do you sort of take what's going on and
Speaker 1: put it into an investment thesis? I mean, how do
Speaker 1: you determine when potentially a rally has gone too far
Speaker 1: or when perhaps people's hopes are getting ahead of the reality. Sure,
Speaker 1: so there's some things that happened immediately. UM that that
Speaker 1: could have been expected if one expected that Trump was
Speaker 1: going to win the election. You know, we saw an
Speaker 1: immediate bounce in biotech because biotech and pharma had been
Speaker 1: under a what we considered a political risk with the
Speaker 1: threat of UH pricing regulation what started really in September
Speaker 1: of last year with the Hillary Clinton tweet. As soon
Speaker 1: as Trump won the presidency rather than Hillary Clinton, that
Speaker 1: political risk was greatly diminished. Biotech popped a lot UH
Speaker 1: that we see maybe you know, as a shorter immediate
Speaker 1: bounce other things like banks. You know, we had already
Speaker 1: been favorable towards the regional banks with the prospect of
Speaker 1: FED raising rates that improves their net interest margin or
Speaker 1: basically their profit on landing. Now the regulatory headwind in
Speaker 1: front of banks will probably be diminished, and we expect
Speaker 1: that and we think there's a long runway for banks
Speaker 1: and financial services UH that's now in front of us
Speaker 1: with the Trump presidency, with the infrastructure spend. We'll see
Speaker 1: what comes there and we'll see what policy statements or
Speaker 1: what statements were made during the campaign actually become policy.
Speaker 1: Because he's walked some back, some like announcing its intent
Speaker 1: to pull out of t p P. He's he's gone
Speaker 1: through with. So I'm looking at a tenure yield right
Speaker 1: now in the treasury UH at about two point four percent,
Speaker 1: up from UH one point five percent as recently as September.
Speaker 1: How high do you think that the tenure could go
Speaker 1: and will this be a messy, unwrapped ing of of
Speaker 1: the bond market? Well, it's it's been a messy, unrattling
Speaker 1: for the last two weeks. We've seen yields, depending on
Speaker 1: where we are on the curve, rise as much as
Speaker 1: fifties sixty seventy basis points, and yields around the world
Speaker 1: have gone quite a bit higher. UM. So it's already
Speaker 1: been a little bit massy. We think we could get
Speaker 1: a pause here at some point, you know, around two
Speaker 1: and a half percent on the ten year UH. But
Speaker 1: when we look out longer term and a lot of
Speaker 1: this will will that will be based on you know,
Speaker 1: our Trump's you know, the actual policies with a Republican
Speaker 1: Congress to get put through. Do we see the inflationary
Speaker 1: the pro growth but also inflationary policies that many think
Speaker 1: will go in That has caused the bond market start
Speaker 1: pricing and higher inflation um. You know, but it's easy
Speaker 1: to see that we we now see rates moving higher
Speaker 1: and the one three back in July we saw in
Speaker 1: the tenure um is a generational low bond yields. Well,
Speaker 1: so what argument for why people were going into stocks
Speaker 1: was that, well there was no alternative, right, because bond
Speaker 1: yields were so low. Basically, the dividend you'd you'd be
Speaker 1: paid by owning a broad basket of stocks would be
Speaker 1: more than treasuries. That's changing, and it's changing fast. Do
Speaker 1: you think that this will lead some people to withdraw
Speaker 1: or at least hold back from allocating money to stock.
Speaker 1: So far that has not been the case, but this
Speaker 1: has been one big question among people I speak with. Yeah,
Speaker 1: it's it's an interesting dynamic that will unfold because you know,
Speaker 1: we've talked about the great rotation for a number of years,
Speaker 1: and there have been a lot of false starts where
Speaker 1: where rates have eventually start to go higher. We see
Speaker 1: the rotation from UM from bonds to stocks for that reason,
Speaker 1: although stocks have had a lot of UH stimulus to
Speaker 1: go higher, namely central bank stimulus. I mean, that's what
Speaker 1: we talked about until the election. Is earnings didn't matter.
Speaker 1: Valueations didn't matter. It was about central bank stimulus around
Speaker 1: the world pumping stocks higher. And you know, but the
Speaker 1: way we think the dynamic between stocks and bonds and
Speaker 1: folds initially is investors start to see and again it's
Speaker 1: investors that look at treasuries and high grade corporates is
Speaker 1: a safe investment. But statement after statement they see a
Speaker 1: negative number in terms of their total return because the
Speaker 1: price of bonds moves inversely the yields. As yields go
Speaker 1: higher and stay higher, the bond prices are lower, and
Speaker 1: that will cause people to rethink, you know, how are
Speaker 1: they allocating their investments. And you know, we have been
Speaker 1: saying for a while and continue to say, this is
Speaker 1: where liquid alternative investments are an opportunity when bonds are
Speaker 1: going to be you know, an asset class that potentially
Speaker 1: offers negative returns here for a while. So in terms
Speaker 1: of total return, So, David, what's your what's your best
Speaker 1: bet going forward in the next six months? Banks, financial
Speaker 1: services regionels are bigger, bigger. So we've seen we've seen
Speaker 1: what's happened with the large money center banks we have, um,
Speaker 1: you know, the problem with the Wells Fargo scandal. So
Speaker 1: when we we look at what rising rates will do
Speaker 1: for financial services in general, uh, it is it's help
Speaker 1: with lending. When we look at the regulatory headwinds that
Speaker 1: have been in place, that's affected lending a lot to
Speaker 1: people look at their regional banks. We we think of
Speaker 1: as the hometown lender. People look at at those banks.
Speaker 1: That's where a lot of their revenue comes from. So
Speaker 1: therefore we like the regional banks over larger banks. We like, uh,
Speaker 1: you know, the smaller companies that are domestically oriented versus
Speaker 1: large mauna national conglomerates. So so small regional banks right
Speaker 1: in that fold of a couple of investment themes that
Speaker 1: we think they have a long runway ahead of them,
Speaker 1: even though they've done so great the past two weeks.
Speaker 1: David Kudla, CEO and chief investment strategist at Mainstay Capital Management,
Speaker 1: talking about how banks is his bet going forward, te
Speaker 1: you with the enemy. Donald Trump went to visit The
Speaker 1: New York Times yesterday, a publication that he has maligned
Speaker 1: greatly and that they've had a pretty contentious relationship, and uh.
Speaker 1: He had a wide ranging interview with editors and reporters
Speaker 1: at the New York Times, Ben Brody, Bloomberg Politics supporter
Speaker 1: here in the studio at Bloomberg eleven three oh, to
Speaker 1: talk a little bit about what the three most important
Speaker 1: points were that we learned from that interview. Right, Well,
Speaker 1: as you said, it was certainly wide ranging them. But
Speaker 1: one of the things that I think a lot of
Speaker 1: people took away from it was him saying suddenly that
Speaker 1: he was open to not exiting the Paris Climate Accords.
Speaker 1: This is somebody who has labeled climate change, uh, you
Speaker 1: know what Chinese designed to make America less competitive, and
Speaker 1: suddenly he's saying that, well, he might keep an open
Speaker 1: mind about this. It was a little unclear what exactly
Speaker 1: would sway him one way or the other, but that
Speaker 1: certainly made headlines. Um. He also backed away a little
Speaker 1: bit from some of the neo Nazis have been supporting
Speaker 1: from him, who have been supporting him backed away a
Speaker 1: lot from this campaign, promised to prosecute Hillary Clinton for
Speaker 1: her use of a private email server, and then raising
Speaker 1: a lot of eyebrows in my world, was him saying
Speaker 1: that the president of the United States simply can't have
Speaker 1: a conflict of interest. This was this was quite exceptional.
Speaker 1: The laws totally on my side, meaning the president can't
Speaker 1: have a conflict of interest. UM. There was a great
Speaker 1: story by Bloomberg reporters Caleb Melby and Stephanie Baker about
Speaker 1: how President elect Trump would have a hard time divesting
Speaker 1: his businesses even if he wanted to. UM, can you
Speaker 1: talk a little bit about that and just how conflicted
Speaker 1: he may be? Sure? Well, for one thing, you know,
Speaker 1: he has a broad international empire with a lot of
Speaker 1: international partners, including in the Philippines somebody who is uh
Speaker 1: an envoy to the US. UH. So the level of
Speaker 1: the conflicts and the level of the involvement is just
Speaker 1: so incredibly vast and really unprecedented UH in the history
Speaker 1: of the U. S presidency. But of course there's also
Speaker 1: the real estate issue. A lot of his holdings are
Speaker 1: relatively a liquid and it's not clear exactly what fair
Speaker 1: market value would be UH for him to divest again
Speaker 1: if he were interested, which he does not seem to
Speaker 1: be coming across as he says, an such thing. It's fine,
Speaker 1: And in a strange way, he actually is right about
Speaker 1: the law conflict of interest. UH laws generally exempt the
Speaker 1: president because they have such a wide purview that there
Speaker 1: would constantly be raising questions of that doesn't undo his
Speaker 1: moral or ethical obligation, nor is it going to stop
Speaker 1: his political enemies from raising questions about it or for
Speaker 1: that a matter of reporters who seeing a story yesterday
Speaker 1: that George Washington too had a lot of property. Um,
Speaker 1: but it might not have been as as quite as lucrative,
Speaker 1: but people are sort of looking, uh for some kind
Speaker 1: of precedent that far back. There was another report yesterday
Speaker 1: that the Trump Foundation admitted violating I R S rules
Speaker 1: by uh improperly giving money to someone close to the organization. Um,
Speaker 1: is this an important thing? Is this something that people
Speaker 1: should pay attention to? Does it matter? Well, you know,
Speaker 1: I'll just sort of use Trump's own logic. You know,
Speaker 1: he said that the Hillary Clara the Clinton Foundation, that
Speaker 1: Bill Hilly and Chelsea Clinton Foundation was worthy of looking
Speaker 1: into because people could use it giving to it as
Speaker 1: a way to get access to the precedent to the president.
Speaker 1: They had used it as a way to get access
Speaker 1: to the Secretary of State, and that you know, this
Speaker 1: basically was issue number one or piece of evidence number
Speaker 1: one about the ways that the economy is rigged and
Speaker 1: the way that Washington is rigged. So I think it
Speaker 1: is something that people should be looking into. Uh, it's
Speaker 1: not exactly clear what the nature of that self dealing was.
Speaker 1: They just sort of checked a box on the I R.
Speaker 1: S Form. But yeah, well we're certainly gonna be looking
Speaker 1: into it. Yeah. It seems pretty unclear at this point
Speaker 1: with the scope of it is or sort of how
Speaker 1: how important it is. Um, but it's something to keep
Speaker 1: an eye on. Another thing making headlines today, uh, and
Speaker 1: President elect Trump plans to nominate South Carolina Governor Nicki
Speaker 1: Haley to be United Nations ambassador. Is he getting pushed
Speaker 1: back from his Republican colleagues even though Nicki Haley is
Speaker 1: a Republican herself. Nikki Haley is very popular in the party.
Speaker 1: Nikki Haley is very popular in her state. Of course,
Speaker 1: she was a vocal Trump opponent for much of the primaries,
Speaker 1: never really came around to him. Uh. It's a little
Speaker 1: bit unclear just how comfortable mainstream Republicans are right now
Speaker 1: with some of his picks who have been a little
Speaker 1: bit more outside of the mainstream where they've been a
Speaker 1: little bit more insiders, uh and loyalists. But we do
Speaker 1: know that they are broadly very happy with the choice
Speaker 1: of NICKI Haley, which one are theyt least happy about? Uh,
Speaker 1: that's uh, that's a big question. Steve Bannon is certainly
Speaker 1: someone who they who's gonna be uh a senior strategistic
Speaker 1: counselor uh, somebody who is drawing sort of a headache
Speaker 1: for them insofar as it's brought some pressure and some
Speaker 1: examination from liberal groups who are concerned about his ties
Speaker 1: to white nationalist movements. But uh, you know, picks like
Speaker 1: Ryant's previous for chief of staff, who's the chairman of
Speaker 1: the r n C, they're pretty happy about those. So
Speaker 1: you know, it's a mixed bag for some of them.
Speaker 1: And I've heard um kind of mixed reports about Mitt
Speaker 1: Romney and how seriously uh President elect Trump is is
Speaker 1: considering putting up a secretary of state. Is that it
Speaker 1: is still Is that still on the table too? I
Speaker 1: think it's definitely still on the table. I think he's
Speaker 1: also definitely still considering a lot of people. This is
Speaker 1: a you know, this is a blue ribbon appointment, and
Speaker 1: he's taking it seriously, and I think he's entertaining a
Speaker 1: really wide iety of people from it. And he's somebody
Speaker 1: who uh kind of goes through a lot of different
Speaker 1: possibilities for big choices like this, and UH often doesn't
Speaker 1: sort of commit one way or the other until his
Speaker 1: gut knows, And so you'll hear leaks from this or
Speaker 1: that quarter representing what's purported to be his choice at
Speaker 1: a given moment. But very often once it's made, UH,
Speaker 1: it looks a little bit different from what people on
Speaker 1: the inside for telling us. Ben Brody, Blumber Politics reporter,
Speaker 1: you have an interesting job. I want to talk about
Speaker 1: the story of UH construction companies and that have just
Speaker 1: absolutely searched in the wake of Donald Trump's victory as
Speaker 1: the next US president. And they seem to be soaring
Speaker 1: on the expectation that construction will pick up. But is
Speaker 1: this actually what's going to happen with us? To break
Speaker 1: it all down, is Karen Eubile, Heart and industrials analyst
Speaker 1: at Bloomberg Intelligence. First, Karen, let's talk a little bit
Speaker 1: about Deer earnings. They came out. They were better than expected,
Speaker 1: still down from last year, but better than expected. The
Speaker 1: stock now up more than nine percent. What's going on, UH,
Speaker 1: Deer is consistently beat throughout this cycle. This was a
Speaker 1: big beat. The expectations were thirty cents. That came in
Speaker 1: almost a dollar, So that's part of it. UM. The
Speaker 1: second thing is they sort of signaled that they think
Speaker 1: the bottom is here in aug equipment. UM. And you know,
Speaker 1: I think it's just that they've executed well, and there's
Speaker 1: a lot of hype around these stocks right now, so
Speaker 1: any any news is good news, it seems like. But
Speaker 1: it seems like it's not necessarily that they're predicting such
Speaker 1: an uptick in revenue next year even and frankly, a
Speaker 1: lot of their gains have come from or better than
Speaker 1: expected performance has come from cost cutting. Correct. They still
Speaker 1: expect the North American market to be down five to
Speaker 1: ten percent. That's the most important market for them. Uh.
Speaker 1: They expect lard equipment to be down in a similar amount,
Speaker 1: But they were down twenty five tot in uh in
Speaker 1: uh fifth school sixteen, so I guess five to ten
Speaker 1: looks better. Uh. You know it. It is still going
Speaker 1: to be down in their high margin project products. So
Speaker 1: it's still going to be about execution next year, but
Speaker 1: people have a lot of confidence in it because they've
Speaker 1: done a good job. Did they talk at all about
Speaker 1: what a Trump administration would mean for their outlook going forward,
Speaker 1: do they have any sense of that. The conference call
Speaker 1: is on right now, but um, I so you know,
Speaker 1: I haven't heard the commentary. But what's going on is
Speaker 1: of course everything moved with Trump, right, But infrastructure was
Speaker 1: the big, big excitement around these docks. And interestingly for Deer,
Speaker 1: it's twelve percent of their sales construction equipment, so it
Speaker 1: should not have moved on that. But um, you know, Caterpillar,
Speaker 1: some of the others, they all moved in anticipation. What
Speaker 1: he what he said he wants to do is a
Speaker 1: big number, a trillion dollars over ten years on likely
Speaker 1: very unlikely. Also probably not gonna help next year, maybe
Speaker 1: help if we get anything through. But there's other things.
Speaker 1: Tax rates are expected to be lower, UH, clean it
Speaker 1: regulations are supposed to be lower. So there's just a
Speaker 1: lot of height that it's a very favorable environment for
Speaker 1: business in general, and UH cyclicals even more because of
Speaker 1: the construction spending and they're just really running. And yet
Speaker 1: on Monday, S and P Global downgraded the outlook for Caterpillar,
Speaker 1: which is often thought of as a rival too dear UH,
Speaker 1: saying that the outlook looks less less positive going forward.
Speaker 1: I mean, is Caterpillar facing a different outlook for some
Speaker 1: reason than Deer Uh yeah, Um, Deer's Cats in the
Speaker 1: money market, big market for them, it's down you know
Speaker 1: sixty um and uh so that looks like that's going
Speaker 1: to be bad again next year, maybe not as bad again,
Speaker 1: leveling off Deer's largely. Yeah, Dad Deer's egg. Um, cats
Speaker 1: got mining and construction. They overlap in construction, but the
Speaker 1: outlook is is different and Cat's financial situation is more
Speaker 1: stretched than DearS and that's part of why. Um, you know,
Speaker 1: SMP made the adjustment as well. Um. So they are
Speaker 1: similar in that that the two largest cap stocks in
Speaker 1: the group, but the end markets are really quite different
Speaker 1: with respect to Dear. How much more can make cut? Uh,
Speaker 1: they expect to cut another another hundred and fifteen million
Speaker 1: dollars again, Um, it's going to be probably largely people
Speaker 1: at this point. I think, you know, you can always
Speaker 1: find something. I think they're they're doing some restructuring in Europe.
Speaker 1: I think they're getting to the end of the cost cutting.
Speaker 1: At some point, they've got to start getting some top
Speaker 1: line and and you know, maybe they'll get it by
Speaker 1: the end of next year, but it's certainly not gonna
Speaker 1: happen in the in the first half. You know, I
Speaker 1: have to wonder, I mean, are they replacing people with
Speaker 1: machines or it's just as excess. Uh now they're running there,
Speaker 1: they're running their plants at much lower levels, like they've
Speaker 1: they've shut down their capacity and large equipment is like
Speaker 1: a third of what it was, for example, so they'd
Speaker 1: simply need less people. But that is happening that, you know,
Speaker 1: the longer term trend is that is happening. Karen Yubil,
Speaker 1: Heart Industrials analyst at Bloomberg Intelligence, here with us in
Speaker 1: our Bloomberg eleven three oh studio in New York, talking
Speaker 1: about uh Dear's beat big beat, its stocks are responding,
Speaker 1: and counterpillars more negative outlook. The big question remains, will
Speaker 1: the positive expectations of the market beefa filled with actual
Speaker 1: infrastructure spending. Thanks for listening to the Bloomberg pian L podcast.
Speaker 1: You can subscribe and listen to interviews at iTunes, SoundCloud,
Speaker 1: or whatever podcast platform you prefer. I'm Pim Fox. I'm
Speaker 1: out there on Twitter at pim Fox. I'm out there
Speaker 1: on Twitter at Lisa Abramo it's one before the podcast.
Speaker 1: You can always catch us worldwide. I'm Boomberg Radio m