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

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

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Speaker 1: or watch us live on YouTube.

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Speaker 2: All right, we had some ism manufacturing data came out

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Speaker 2: just this morning, a little bit weakerd then expect it.

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Speaker 2: Let's bring in Tim Fury, used the chair for the

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Speaker 2: Institute for Supply Management. The kids know that. As im

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Speaker 2: Tim talk to us about the data we saw today.

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Speaker 2: I'm just looking at the headlines. Came in a little

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Speaker 2: bit below forecast, a little bit below last period as well.

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Speaker 1: Yeah, hi jeessipeball.

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Speaker 3: So the best way to describe this report, although our

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Speaker 3: number is contracting again, is stable, stagnant, stock sluggish and flat.

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Speaker 3: You know the preponderance of the common comments in the

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Speaker 3: over the last couple of months, we're kind of on

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Speaker 3: the plateau. As you know, your listeners. We started to

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Speaker 3: see a grow out back in January. It was a

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Speaker 3: week grow out, not a very strong growout. But in

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Speaker 3: the month of April and then again the month of May,

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Speaker 3: we're basically stuck, and it feels the reason why we're

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Speaker 3: stuck is that there is very little demand. And the

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Speaker 3: reason that there's very little demand is because people are

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Speaker 3: waiting for ray cuts. So when we started the year,

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Speaker 3: the ray cuts were actually a tailwind. Now with the

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Speaker 3: lack of tail of ray cuts, we're actually.

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Speaker 4: Looking at a headwind.

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Speaker 3: So the manufacturing sector is pretty much frozen, and they're

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Speaker 3: unwilling to really invest in capex and in working capital,

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Speaker 3: and to some extent, in people until the horizon clears up.

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Speaker 5: So Tim, what does this mean more broadly for the economy?

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Speaker 3: Well, you know, I think we're just we're six to

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Speaker 3: nine months out ahead of the general economy. So you know,

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Speaker 3: we started to grow out in January, as I said,

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Speaker 3: which would indicate that maybe the general economy would start

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Speaker 3: to see a a better uplift in the fall. But

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Speaker 3: with this plateauing, this could be just a manufacturing plateau

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Speaker 3: depending on what the FED does on the right side.

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Speaker 3: But I don't think we're going to see much movement here.

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Speaker 3: I mean, as time goes on and there's a lack

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Speaker 3: of demand, there's going to be a lack of work.

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Speaker 3: One of the really positive things here the report is

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Speaker 3: that we were stable on a revenue basis month to month,

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Speaker 3: which is good. But we've been expanding slightly for the

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Speaker 3: last three or four months and now we're stable, which

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Speaker 3: really means that as your pipeline your backlog declines, you

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Speaker 3: have less to work on. We could see that production

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Speaker 3: number going to contraction, which would be a whole different story.

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Speaker 3: So that's the first story here. I already mentioned a demand.

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Speaker 3: It's the weakest new order number we've had in a year.

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Speaker 3: Last May's worse at forty two, which is a lot

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Speaker 3: worse than forty five, by the way, but so okay,

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Speaker 3: we're not as bad as last May. And then you know,

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Speaker 3: the positive thing here is on the prices number, where

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Speaker 3: although we're still expanding, we're not expanding as much as

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Speaker 3: we were in April. And we just finished our forecast

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Speaker 3: and our respondents have indicated that for the whole year

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Speaker 3: twenty twenty four, we're looking at a one point nine

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Speaker 3: percent price growth on the cost of things that they buy,

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Speaker 3: of which we've already seen one point six percent so

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Speaker 3: far this year. So if you take that, it really

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Speaker 3: says that we're looking at essentially not much more of

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Speaker 3: a price increase as we close on the year, and

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Speaker 3: you know, hopefully that will spur some demand here, but

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Speaker 3: I think you know everybody's waiting for a little bit

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Speaker 3: more solidity and some positive news here so that people

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Speaker 3: will move on. In the meantime, we've gone from a

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Speaker 3: profit focused performance here to a profit focused performance here

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Speaker 3: with a bigger priority on making sure you're liquid in

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Speaker 3: the event something wrong happens. And that's kind of where

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Speaker 3: we're at all right.

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Speaker 2: Tim, thanks so much for joining us as appreciate getting

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Speaker 2: your thoughts here. On ism day, Tim Fury, Chair for

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Speaker 2: the Institute for Supply Management, talking about these ice and

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Speaker 2: manufacturing numbers came in lighter than expecting. Again, the one

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Speaker 2: that jumped out of me, Jess was a new orders

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Speaker 2: came into forty five five point four. Consensus was forty

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Speaker 2: nine point four, so a big miss there. Last period

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Speaker 2: was forty nine point one. So the new orders kind

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Speaker 2: of gives you a little bit of a leaning indicator

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Speaker 2: weaker than expected.

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

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Speaker 1: weekdays at ten am Eastern on applecar Play and Android

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Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station.

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Speaker 1: Just say Alexa playing Bloomberg eleven thirty.

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Speaker 2: It's stop technology, Let's do it. Why not?

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Speaker 5: Also apparently with the New York Post calls the best

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Speaker 5: dressed man on.

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Speaker 2: Well, that's debatable, dude. I mean, I actually have a

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Speaker 2: problem with his wardrobe, and I just I tend to

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Speaker 2: look past it. Dan ives joined just because he's a

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Speaker 2: big Penn State fan, So I look past it. Dan

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Speaker 2: I's managing director Senior Equity analys for web Boast Securities.

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Speaker 2: Hey Dan, thanks so much for joining us here. Let's

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Speaker 2: talk about chips. And we talked about AI, and you've

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Speaker 2: been on front of this AI trade and really getting

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Speaker 2: people up the speed on on AI and how to

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Speaker 2: play it. But are we still focusing on the chips? Here?

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Speaker 2: Is it in video and everybody else?

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Speaker 6: I mean, look is there? Ultimately it's Jensen and Nvidia's world.

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Speaker 6: Everyone else paying rent? And if you because just plays out,

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Speaker 6: no Amduisa, Sue, potentially Intel, others in the semi food chain,

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Speaker 6: they will start to see a benefit twenty twenty five,

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Speaker 6: twenty six. But for now, there's only one game in town,

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Speaker 6: and that's in video and right I just continue to

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Speaker 6: see an autobond type of path for Jensen and video.

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Speaker 5: Yeah, if anyone watching our YouTube feed can see Dan,

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Speaker 5: now it's kind of in a cotton candy sort of

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Speaker 5: colored shirt right now, but.

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Speaker 2: You know its charcoal gray suit very exactly. That's the

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Speaker 2: way I was brought up a long fan.

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Speaker 5: Can't You can't get the investment banker out of him?

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Speaker 2: No, Dan brings much more color to the whole game. No, Damn.

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Speaker 5: Dan always does so speaking, but sucks. Look at the

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Speaker 5: socks this morning, the Philadelphia City Conductor Index that moving higher.

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Speaker 5: Obviously it houses Bellweather's like in Nvidia, AMD and Intel.

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Speaker 5: But talk to us more about TSMC and some of

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Speaker 5: these other Nvidia suppliers in Asia and what that really

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Speaker 5: means for the development coming off of the back of

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Speaker 5: Obviously we're gonna have that ten for one stock split

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Speaker 5: for in Nvidia coming to Fruition right before the opening

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Speaker 5: of trading on June tenth, So not too far away here, Yeah.

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Speaker 6: Jess, I mean our team was in Taiwan last week.

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Speaker 6: Parties just getting started, and for TSMC for the for

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Speaker 6: the other semi players, I mean, we're seeing demand well

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Speaker 6: into twenty twenty five and this is not double ordering.

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Speaker 6: I think it just shows this AI revolution is kicked

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Speaker 6: off and it's not just the big tech players that

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Speaker 6: are going to benefit now, it's the second, third, fourth derivatives.

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Speaker 6: And that's what we're seeing play out in tech. I

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Speaker 6: have and I have nos that's clearly playing out across NASNAC.

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Speaker 2: Hey, Dan, you know, just look looking ahead a little

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Speaker 2: bit here. A week from today, I believe that we're

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Speaker 2: gonna have that developed conference for Apple. It just seems

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Speaker 2: to me that there's a the expectations there. I think

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Speaker 2: investors want to be kind of wowed a little bit

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Speaker 2: by Apple and maybe some AI discussion. Are we gonna

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Speaker 2: get that or are we going to be disappointed? Do

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Speaker 2: you think?

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Speaker 6: Yeah, Look, we'll be there a week from now. And

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Speaker 6: I think it's the biggest event for Cooking Cooper Tino

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Speaker 6: in over a decade because this is AI coming app.

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Speaker 6: I think most consumers their interaction with generative AI is

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Speaker 6: going to be through an Apple device. So this is

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Speaker 6: important for developers to lay out the stack, what the

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Speaker 6: feature functionality looks like. I think it's your early start

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Speaker 6: of an AI app store, and then the drum roll

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Speaker 6: to an AI driven iPhone in terms of iPhone sixteen

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Speaker 6: will ultimately be iPhone seventy. I think to run us

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Speaker 6: on to growth, it's a massive event for Apple.

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Speaker 5: What about switching it up and looking over to Tesla

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Speaker 5: because I know that's a name that I believe you

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Speaker 5: took off of one of your conviction lists earlier this year.

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Speaker 5: Where do you see that stuckheaded from here?

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Speaker 6: Yeah, it's been in category five storm, but I think

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Speaker 6: they're starting to get through it. I think if you

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Speaker 6: could demand in China's stabilized and ultimately checked by check,

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Speaker 6: I think they're getting rid of some of the overhangings

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Speaker 6: That one is late next week. Does must get that

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Speaker 6: twenty eighteen compactage approved? I think it does get approved.

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Speaker 6: I think that's been a bit of an overhang, and

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Speaker 6: then it's really about demand stabilizing and the next part

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Speaker 6: of the store, the sub thirty kvehicle as well as

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Speaker 6: FSD taking hold. I think that's a big part of

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Speaker 6: the valuation to the Tesla store.

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Speaker 2: So for it's for Tesla and a you know, a

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Speaker 2: lower price car, whether it's sub thirty thousand, whatever the

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Speaker 2: price tag is. I mean, and you're modeling, dan, can

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Speaker 2: they make money on a per unit basis at that

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Speaker 2: price point.

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Speaker 6: They can't. I think they can make money up to

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Speaker 6: about twenty three to twenty four k. But that's look

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Speaker 6: that the scale and scope that's been that's been the

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Speaker 6: whole key of success. I mean, despite everything that we've seen,

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Speaker 6: it used to be fifty five thousand. Now they can

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Speaker 6: make money at twenty two to twenty four thousand. So

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Speaker 6: I think that's really something that you're seeing across I

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Speaker 6: think the industry, their ability to scale, that's a huge

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Speaker 6: part of their advantage. And of course not just here

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Speaker 6: but especially in China and around the world.

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Speaker 5: Are there particular technical levels you're watching for Tesla's stock

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Speaker 5: to see like if the worst of the pain is

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Speaker 5: already passed.

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Speaker 6: Yeah, I think Look in my mind from a sentiment perspective,

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Speaker 6: it has just been as negative as I've seen it

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Speaker 6: in a number of years. I think as we get passed,

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Speaker 6: wait next week the shareholder meeting, you start see stabilization

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Speaker 6: in two Q and three Q, and then I think

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Speaker 6: investors start to look into next year. But again, betting

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Speaker 6: against Musk, betting against Tesla, that's been the wrong bet.

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Speaker 6: Despite you know, I think many that are piled on

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Speaker 6: and I think yet it again, this will be proven

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Speaker 6: to be more of a golden opportunity to own Tessa

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Speaker 6: rather in the start of a negative decline.

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Speaker 2: All right, Dan, thanks so much for joining us as

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Speaker 2: I always appreciate it. Dan, if he's a managing director

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Speaker 2: senior equity analyst at web Bush Securities, joining us here

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Speaker 2: talking all things technology. That's one of the great things

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Speaker 2: about chatting with Dan. You can kind of go all

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Speaker 2: over the tech map and get a conviction comments is

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Speaker 2: kind of.

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Speaker 5: Way the Wall Street's best dressed according to the New

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Speaker 5: York Post. But Paula, we call you the fashion police here.

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Speaker 2: Yeah. Total.

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Speaker 5: So if you you saw Dan in the Bloomberg headquarters,

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Speaker 5: would you stop him last summer? I think somebody came

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Speaker 5: in with sandals.

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Speaker 4: It was.

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Speaker 2: Over your condos clip tops.

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Speaker 5: I'd like to come barefoot.

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Speaker 2: Yeah, well, Dan, you're right. He was written up in

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Speaker 2: the New York Post his uh wonderful wardrobe that he wears.

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Speaker 2: Plus it's all around the world because the guy's always.

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Speaker 5: All right, you guys a learn about where he buys all.

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Speaker 2: Of these up exactly.

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

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Speaker 1: weekdays at ten am Eastern on Apple Car playing Enroud

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Speaker 1: Auto with the Bloomberg Business app, Listen on demand wherever

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

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Speaker 2: SPX up about ten eleven percent this year. SPW the

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Speaker 2: Equal Weighted Index up about four and a half percent here,

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Speaker 2: so still some of those big names kind of driving

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Speaker 2: it here a little bit.

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Speaker 5: Also, the S and P five hundred up twenty three

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Speaker 5: of the past thirty one week, so that since the

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Speaker 5: October low, if you want to go back, that was

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Speaker 5: around October twenty seventh when the S and P made

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Speaker 5: that low, up about coming into today's trading twenty eight

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Speaker 5: percent since that.

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Speaker 2: Let's see what the pros are doing here. Margi Battel

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Speaker 2: is certainly a pro. She's been doing this for some time,

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Speaker 2: has some great perspective market. Bettel is a senior portfolio

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Speaker 2: managered all Spring Global Investments, joining us from Boston via

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Speaker 2: zoom Markie. When you talk to your clients here, what

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Speaker 2: do you tell them about these markets? Should they be

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Speaker 2: focusing on the big tech names, should they be broadening

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Speaker 2: it out to some other sectors. What kind of discussions

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Speaker 2: are you having with your clients these days?

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Speaker 4: Well, we still think the tech sector is one of

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Speaker 4: the leading sectors because they still have secutor growth and

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Speaker 4: cyclical growth behind and so we don't think the sector

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Speaker 4: is really overvalued. Considering the growth that they should have

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Speaker 4: over the next one two three years. We think they

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Speaker 4: still pretty fairly priced and it's still going to be

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Speaker 4: one of the fastest growing sectors.

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Speaker 7: So it's still a market that's selective.

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Speaker 4: We see opportunities in some of the industrials, particularly those

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Speaker 4: companies that are linked to somebody the mega trends such

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Speaker 4: as the move to the cloud and data centers and reindustrialization,

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Speaker 4: reshore and things like that, But a more selective market

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Speaker 4: I think is going.

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Speaker 5: To continue well, Margie. As the calendar just flipped to June,

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Speaker 5: obviously there's different ways to cut kind of seasonality different actors.

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Speaker 5: I know people like to talk about the juneswoon or

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Speaker 5: even Seliman go away, but obviously if you look over

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Speaker 5: the last decade really hasn't worked as well. If you

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Speaker 5: use the seag go function in the terminal, you can

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Speaker 5: see how the S and P five hundreds only been

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Speaker 5: down twice in June over the last decade. So in

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Speaker 5: twenty twenty two, during that beer market and then in

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Speaker 5: twenty fifteen, obviously that correlated with what was going on

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Speaker 5: with some manufacturing slowdowns in China and then obviously those

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Speaker 5: highly indebted European countries that was worries of default there.

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Speaker 5: But in election year periods, typically the summer can actually

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Speaker 5: be a stronger period, but that usually comes when there's

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Speaker 5: more clarity as far as who the winner would be

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Speaker 5: very different kind of setup that we have this time around.

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Speaker 5: But I'm wondering over the next few months, where do

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Speaker 5: you see stocks headed from your as far as when

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Speaker 5: Paul and I were just talking about the rally that

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Speaker 5: the SMP has been on since that October left, well,

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Speaker 5: I don't.

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Speaker 7: Think you can.

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Speaker 4: We always look at the history books to give you

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Speaker 4: comfort for how this year is going to work out.

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Speaker 4: I think we have just a narrow window for the

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Speaker 4: Fed to act if they're going to lower rate before.

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Speaker 4: They'll want to be quiet before the election. But typically

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Speaker 4: election years a strong years. They may waffle around mid

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Speaker 4: year like right now, but no matter who wins, they

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Speaker 4: seem to have a strong finish to the end of

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Speaker 4: the year.

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Speaker 7: So we think that we may see a little bit

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Speaker 7: of back and forth here.

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Speaker 4: Uncertainty of a fed policy over world, the economy continue

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Speaker 4: to show any weakening trends, and then the market I

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Speaker 4: think will look to the end of the year and

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Speaker 4: be pretty optimistic again.

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Speaker 7: So we're looking for a strong finish.

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Speaker 2: Margie, how much is that strong finish predicated upon earnings?

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Speaker 2: I'd love to get your thoughts on kind of what

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Speaker 2: we're seeing in the earnings from corporate America this year

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Speaker 2: and what you expect for the remainder of the year.

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Speaker 2: Can that be a driver of stocks?

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Speaker 4: Well, I think it'll be more of the same companies

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Speaker 4: just as last year. They're more or less continuing to surprise.

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Speaker 7: With better earnings.

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Speaker 4: Profit margins are being maintained. I think that's a little

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Speaker 4: benefit from this little above average inflation that's helping companies.

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Speaker 4: And really, if you look at the first quarterer, we

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Speaker 4: had growth in the GDP of one point three s

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Speaker 4: and P revenues are up i think four percent officer

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Speaker 4: of ten percent, So I think it shows you that

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Speaker 4: the standard and poors our Nasdaq companies are not necessarily

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Speaker 4: reflective of what you see for the say the GDP numbers,

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Speaker 4: and shows companies can still.

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Speaker 7: Grind out profits that are way above the GDP growth.

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Speaker 4: So we think that's what we're going to see, is

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Speaker 4: more something close to that ten percent earnings growth for

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Speaker 4: the year or for the rest of the year.

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Speaker 5: What are some of your top questions that you're getting

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Speaker 5: from clients right now.

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Speaker 4: Well, I think everyone is concerned about interest rates, Will

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Speaker 4: the Fed act or won't they act? And what influence

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Speaker 4: will that have on the economy. I personally don't think

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Speaker 4: it's going to have very much a material impact either way.

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Speaker 4: A quarter or point I think will really change the

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Speaker 4: direction of the economy. It's pretty strong, and people are,

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Speaker 4: of course very concerned about the deficit, how where the

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Speaker 4: money will come from, what we need from foreign investors.

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Speaker 4: Will that cause treasury rates to go up as the

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Speaker 4: government needs to finance very large, very large deficits. I

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Speaker 4: think those are the things that people are focusing on,

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Speaker 4: really more macro rather than any individual sector.

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Speaker 2: Margie. For no particular reason, this studio of radio professionals

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Speaker 2: feels like they're experts on the industrial the electrical grid here,

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Speaker 2: and a lot of folks feel like, you know, maybe

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Speaker 2: utilities are a way to play AI and things like that.

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Speaker 2: How do you think about the grid, the power grid

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Speaker 2: and how it plays into this economy.

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Speaker 7: Well, I think it's funny.

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Speaker 4: It's one of the most boring parts of the market

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Speaker 4: has become one of the most hot and trendy parts.

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Speaker 7: I think the utility companies, I think are.

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Speaker 4: Rather limited way to play the growth in power consumption

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Speaker 4: that we expect we'll see from economic growth and of

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Speaker 4: course from the data centers. And I think a more

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Speaker 4: interesting way to take advantage of those trends really is

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Speaker 4: which companies will participate in the growth of building the infrastructure,

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Speaker 4: hardening the grid, things like that. Again, so that says

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Speaker 4: more companies in the industrial space rather than the utility space,

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Speaker 4: although you could make a case for some of the

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Speaker 4: independent power companies that have excess power that will be

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Speaker 4: able to help balance the needs between various regions and

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Speaker 4: between say unreliable or variable green sources versus space loads

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Speaker 4: such as coal or gas or nuclear.

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Speaker 5: When you're looking at utilities companies, typically people think of

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Speaker 5: them as obviously the consistent dividends that they pay and

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Speaker 5: low volatility, but also in addition to the AI sort

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Speaker 5: of play with this. Could this be basically investors seeing

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Speaker 5: that peak and rates that's happening when you're seeing a

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Speaker 5: particular corner like this that has been rallying since it's

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Speaker 5: April nineteenth, lows that we solve for that particular sevenst group.

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Speaker 4: Well, really, when you look at the utilities, when you

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Speaker 4: look at their price earns ratio, and you look at

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Speaker 4: their dividend yields on that basis, they aren't really attractive

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Speaker 4: as attractors say. It's as they've been historically compared to

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Speaker 4: treasury rates. When you have a tender treasury, say four

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Speaker 4: and a half, four and threecord or something like that,

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Speaker 4: most dividends on utilities are a lot lower. So they

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Speaker 4: really are as competitive as say, as it used to

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Speaker 4: be some years ago, where there would be more of

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Speaker 4: an interest rate played by buying the utilities to get

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Speaker 4: the very high dividend. You'll say, just really, I don't

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Speaker 4: think can be as competitive, just as intermedia.

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Speaker 2: Treasures push that blue button there. Margie, thanks so much

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Speaker 2: for joining us here. Market Bettel, senior portfolio management offspring

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Speaker 2: of Global Investments, joining us from Boston via zoom.

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

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

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Speaker 1: Android Auto. With the Bloomberg Business app, you can also

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Speaker 1: listen live on Amazon Alexa from our flagship New York station,

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Speaker 1: Just say Alexa playing Bloomberg eleven thirty.

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Speaker 2: Jess Mean sitting in for Alex Steele on Paul Sweeney.

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Speaker 2: We live here in on our Bloomberg Inactor Brooker Studio.

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Speaker 2: You streaming live on the internet, John Tucker, that's the

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Speaker 2: internet I've heard of. So I've heard dot com and

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Speaker 2: you can search Bielberg podcast and that's where you find it's.

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Speaker 2: Peter Vosser joins us. He's the chairman of A b

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Speaker 2: b a publicly traded company. A b b N is

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Speaker 2: the ticker.

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Speaker 4: Uh.

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Speaker 2: They are located in Europe and in Zurich. Are good friends?

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Speaker 2: Over and switching. My daughter's in Zurich today? Oh really?

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Speaker 2: Why on holiday? I have no idea, but that's where

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Speaker 2: she has said. I got something. It is it's a

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Speaker 2: beautiful city. Peter, talk to us about ABB What are

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Speaker 2: the challenges you guys are facing here? So you think

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Speaker 2: about to electrify, automate hard, to decarbonize industries. Where's your

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Speaker 2: focus of your company these days?

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Speaker 8: Well, thanks for having me. It's clearly it's the energy transition,

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Speaker 8: which is not only the heart to abate sectors. It's

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Speaker 8: in general the move from a more foscile driven and

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Speaker 8: that system into electric that you system, and then we

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Speaker 8: obviously contribute with our products and systems, which gives us

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Speaker 8: energy savings between twenty and forty or even fifty percent.

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Speaker 2: So that's one angle.

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Speaker 8: The other one is all linked to new technologies around

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Speaker 8: automation and robotics, because we are world leading company in

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Speaker 8: both areas, and that has to do with the reshuring,

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Speaker 8: bringing things closer home again where the markets are, but

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Speaker 8: also in some countries, dealing with the demographics because we

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Speaker 8: have less and less people working in the working age,

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Speaker 8: and therefore robotics and the automation becomes very important. And

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Speaker 8: the last one is AI, which will revolutionize obviously all

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Speaker 8: what's related to automation.

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Speaker 5: In the future, we'll talk to us more about what

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Speaker 5: you think is the best way to try to scale manufacturing.

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Speaker 5: When it comes to the EVE charging space, I.

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Speaker 8: Think what we really need on the emobility side. Let

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Speaker 8: me put it this way, is really work on two fronts.

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Speaker 8: One is a technical side on the charging side, but

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Speaker 8: the other one is also on the user friendiness side,

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Speaker 8: so that they become actually more reliable. They are much

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Speaker 8: more modern. On the manufacturing side, I think we have

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Speaker 8: had clearly in some countries and regions there was some

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Speaker 8: scarcity of manufacturing capacity, which I think have been sold.

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Speaker 8: Was not an issue for ABB in that sense, but

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Speaker 8: it's the product evolution which is very key now. On

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Speaker 8: the other side, I think one that should not forget

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Speaker 8: that the whole network of electrification needs to be up

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Speaker 8: to speed. You cannot just actually consume much more energy.

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Speaker 8: You also need to build the transmission lines that the

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Speaker 8: power actually comes in. Where we have got let's say

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Speaker 8: the charge is installed either for a private passenger cars

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Speaker 8: or for busses, ships, trains, whatever.

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Speaker 5: You want to call it.

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Speaker 8: So I think we need much more infrastructure investments on

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Speaker 8: the one side, and really really to actually get to

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Speaker 8: ev charging and the passenger cars based on electrification much

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Speaker 8: more developed in the future.

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Speaker 2: Peter, who are some of your bigger customers that you're

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Speaker 2: working with these days?

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Speaker 8: We are here in the United States, so we have

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Speaker 8: all kinds of manufacturing companies in that sense. But on

438
00:22:22,040 --> 00:22:26,760
Speaker 8: the industrial side, any any company you can think of

439
00:22:28,000 --> 00:22:31,359
Speaker 8: which are they are in manufacturing space. For example, they

440
00:22:31,480 --> 00:22:35,720
Speaker 8: use our electification products, they use our automation products, So

441
00:22:35,880 --> 00:22:38,800
Speaker 8: you have all the industrial companies and that's where we

442
00:22:38,880 --> 00:22:41,960
Speaker 8: make the difference. The other side, utilities are very key.

443
00:22:42,320 --> 00:22:44,399
Speaker 8: As I just said, they need to make sure we

444
00:22:44,480 --> 00:22:45,240
Speaker 8: have an off supply.

445
00:22:45,800 --> 00:22:48,240
Speaker 2: And I know, I'm just looking at our PGeo function

446
00:22:48,320 --> 00:22:50,800
Speaker 2: where I can see where your revenue comes by geography.

447
00:22:50,960 --> 00:22:53,920
Speaker 2: You're everywhere, a third in Europe, a thirde in you know,

448
00:22:54,160 --> 00:22:57,440
Speaker 2: you're all You're truly a global company. Do you see

449
00:22:57,480 --> 00:23:00,359
Speaker 2: certain parts of the world that are more in front

450
00:23:00,480 --> 00:23:03,800
Speaker 2: of you know, kind of making the transition then some others.

451
00:23:04,720 --> 00:23:07,440
Speaker 8: Yeah, I think I would say that Europe has started

452
00:23:07,480 --> 00:23:11,199
Speaker 8: this rather early with the new Green Deal in Europe,

453
00:23:11,760 --> 00:23:15,760
Speaker 8: but also moving into a very different energy systems. Paid

454
00:23:15,800 --> 00:23:18,919
Speaker 8: some price with the wars in Russia, so energy prices

455
00:23:18,960 --> 00:23:21,480
Speaker 8: have gone up and that some rethinking has taken place.

456
00:23:22,240 --> 00:23:23,320
Speaker 2: I think here in the.

457
00:23:23,480 --> 00:23:27,200
Speaker 8: US you quite clearly see the demand is there in

458
00:23:27,680 --> 00:23:34,120
Speaker 8: all industries now supported by the various acts you have here,

459
00:23:34,320 --> 00:23:37,680
Speaker 8: either the Inflation Act or then also the Industrial Act,

460
00:23:37,880 --> 00:23:39,440
Speaker 8: and that is driving investments.

461
00:23:39,520 --> 00:23:39,680
Speaker 2: Now.

462
00:23:39,960 --> 00:23:43,800
Speaker 8: It's much earlier days than in Europe. For example. AHA

463
00:23:43,960 --> 00:23:46,200
Speaker 8: is a little bit of mixed back, I have to say.

464
00:23:46,320 --> 00:23:49,200
Speaker 8: So you see some countries at the leading edge like

465
00:23:49,400 --> 00:23:53,520
Speaker 8: smaller company countries like Singapore. In China, which is our

466
00:23:53,640 --> 00:23:56,960
Speaker 8: second biggest market after the US, you see actually a

467
00:23:57,080 --> 00:24:00,959
Speaker 8: lot of efforts now being put in place to change

468
00:24:00,960 --> 00:24:05,320
Speaker 8: the electric system in China. A lot of EV cars

469
00:24:05,359 --> 00:24:08,960
Speaker 8: are coming in and you can see that those really

470
00:24:09,760 --> 00:24:13,360
Speaker 8: are now generating the growth in China. Y city subdued

471
00:24:13,480 --> 00:24:16,760
Speaker 8: compared to the US at this stage. So indeed, we

472
00:24:16,800 --> 00:24:20,240
Speaker 8: are operating across the world in more than one hundred countries.

473
00:24:21,200 --> 00:24:24,160
Speaker 8: We get good insights. At the moment, the driving forces

474
00:24:24,200 --> 00:24:28,600
Speaker 8: are really the US and Europe, with let's say Asia

475
00:24:29,080 --> 00:24:31,719
Speaker 8: apart from India are lacking somewhat.

476
00:24:32,040 --> 00:24:35,360
Speaker 5: So where else do you go to expand from here

477
00:24:35,520 --> 00:24:37,000
Speaker 5: when you already are in so many places?

478
00:24:38,520 --> 00:24:41,600
Speaker 8: It's quite clearly US is our key number one market

479
00:24:42,040 --> 00:24:44,640
Speaker 8: and that's where we have a developing We have over

480
00:24:44,680 --> 00:24:46,959
Speaker 8: the last ten years, we have put more than fourteen

481
00:24:47,000 --> 00:24:51,840
Speaker 8: billion dollars into the US in terms of investments. We

482
00:24:52,000 --> 00:24:55,800
Speaker 8: have got forty manufacturing sites in twenty states. We're operating

483
00:24:55,840 --> 00:24:59,080
Speaker 8: in all states with our services, et cetera. So that's

484
00:24:59,080 --> 00:25:02,399
Speaker 8: a key market. We see the electrification market in the

485
00:25:02,560 --> 00:25:05,560
Speaker 8: US as key, but also the industrial one, which has

486
00:25:05,600 --> 00:25:08,919
Speaker 8: a lot to do with bringing home let's say, manufacturing

487
00:25:09,800 --> 00:25:14,520
Speaker 8: capabilities and capacity. And then the second one is clearly India,

488
00:25:14,760 --> 00:25:18,320
Speaker 8: which at the moment is in terms of growth outstripping

489
00:25:19,080 --> 00:25:22,280
Speaker 8: all other countries in a big way. They are very

490
00:25:22,480 --> 00:25:26,280
Speaker 8: low in manufacturing capacity and that's where a lot of

491
00:25:26,480 --> 00:25:30,639
Speaker 8: investments now for the high end manufacturing goes in. And

492
00:25:30,760 --> 00:25:33,760
Speaker 8: then the third one will be Europe quite clearly as

493
00:25:34,080 --> 00:25:37,320
Speaker 8: the European change in the energy system, but also the

494
00:25:37,520 --> 00:25:42,360
Speaker 8: demographic issues which we have in Europe which will take

495
00:25:42,480 --> 00:25:47,040
Speaker 8: out about fifty million of working people over the next

496
00:25:47,119 --> 00:25:49,920
Speaker 8: ten years and that needs to be replaced by automation

497
00:25:50,080 --> 00:25:50,720
Speaker 8: and robotics.

498
00:25:50,760 --> 00:25:53,000
Speaker 2: So there's a lot of investments on going there. Peter,

499
00:25:53,119 --> 00:25:54,760
Speaker 2: thank you so much for joining us. Really appreciate you

500
00:25:54,800 --> 00:25:57,280
Speaker 2: coming here. Peter Barso he's the chairman of ABB. The

501
00:25:57,400 --> 00:26:00,919
Speaker 2: ticker symbol put into your Bloomberg from ABB and Trades

502
00:26:00,960 --> 00:26:03,680
Speaker 2: in Switzerland stuck about half a percent today, all time

503
00:26:03,880 --> 00:26:06,119
Speaker 2: high for the stock today. So that's why we get

504
00:26:06,160 --> 00:26:08,400
Speaker 2: the audience for stocks at it all the time high.

505
00:26:08,400 --> 00:26:11,520
Speaker 2: It's got an airy scream billion Swiss frank market caps

506
00:26:11,560 --> 00:26:14,080
Speaker 2: of not too shabby. Peter Bosser from ABB joining us Here.

507
00:26:16,440 --> 00:26:20,320
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

508
00:26:20,440 --> 00:26:23,960
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

509
00:26:24,000 --> 00:26:26,720
Speaker 1: Auto with the Bloomberg Business App. You can also listen

510
00:26:26,880 --> 00:26:29,920
Speaker 1: live on Amazon Alexa from our flagship New York station,

511
00:26:30,320 --> 00:26:33,080
Speaker 1: Just say Alexa playing Bloomberg eleven thirty.

512
00:26:34,680 --> 00:26:37,440
Speaker 2: Let's talk about global energy, and we do that with

513
00:26:37,800 --> 00:26:41,080
Speaker 2: Ellen Walden. She joins us some transversal. Ellen, I'm seeing

514
00:26:41,240 --> 00:26:43,960
Speaker 2: WTA crude oil off about three point two percent here today,

515
00:26:43,960 --> 00:26:47,320
Speaker 2: it's seventy four dollars and fifty cents. What's your thoughts here, Ellen,

516
00:26:47,400 --> 00:26:50,760
Speaker 2: about the global energy market? What's kind of winning the

517
00:26:50,840 --> 00:26:53,520
Speaker 2: day here? Supply demand? What should we be focusing on?

518
00:26:54,800 --> 00:26:57,600
Speaker 9: I think right now we're seeing kind of some of

519
00:26:57,840 --> 00:27:02,680
Speaker 9: a reaction to opaq pluses recent decision to start to

520
00:27:02,880 --> 00:27:07,920
Speaker 9: maybe unwind the voluntary supply cuts in twenty twenty five.

521
00:27:08,560 --> 00:27:10,359
Speaker 9: So we're not actually talking about a whole lot of oil.

522
00:27:10,400 --> 00:27:12,600
Speaker 9: They're still keeping a lot of their supply cuts in place.

523
00:27:13,440 --> 00:27:17,600
Speaker 9: But I don't think that the market really expected such

524
00:27:17,720 --> 00:27:22,800
Speaker 9: long term guidance from OPEK, and so it's they're reacting

525
00:27:22,920 --> 00:27:27,879
Speaker 9: to that. And it's kind of interesting because gasoline prices

526
00:27:27,920 --> 00:27:30,399
Speaker 9: in the US are also trending downward, which is not

527
00:27:30,520 --> 00:27:33,240
Speaker 9: something we'd usually expect, you know, with this summer driving

528
00:27:33,320 --> 00:27:36,800
Speaker 9: season starting, I think that there's kind of some tension

529
00:27:36,880 --> 00:27:41,000
Speaker 9: here between what is looking Could it could potentially be

530
00:27:41,119 --> 00:27:44,320
Speaker 9: a slightly under supplied market, or if you know, we

531
00:27:44,440 --> 00:27:50,400
Speaker 9: keep seeing inflation running high, then we could even see

532
00:27:50,440 --> 00:27:51,960
Speaker 9: the reverse. And I think the markets are just not

533
00:27:52,200 --> 00:27:54,679
Speaker 9: quite sure at this point, you know, what to expect

534
00:27:54,720 --> 00:27:55,119
Speaker 9: this summer.

535
00:27:55,440 --> 00:27:57,360
Speaker 5: So it seems as if there's no room for more

536
00:27:57,520 --> 00:28:01,000
Speaker 5: supply if the group, when we are talking about OPEC plus,

537
00:28:01,200 --> 00:28:04,760
Speaker 5: wants to defend those prices, let alone push them higher.

538
00:28:04,840 --> 00:28:07,600
Speaker 5: Walk us through the dynamic here of what's set up

539
00:28:07,640 --> 00:28:08,800
Speaker 5: over the next couple of months.

540
00:28:10,119 --> 00:28:12,760
Speaker 9: Yeah, So the group has basically decided to hold their

541
00:28:12,800 --> 00:28:16,000
Speaker 9: current production level steady through the rest of twenty twenty

542
00:28:16,040 --> 00:28:19,920
Speaker 9: four and then starting in twenty twenty five, the plan

543
00:28:20,280 --> 00:28:24,080
Speaker 9: is that they some countries are going well. UAE in

544
00:28:24,160 --> 00:28:26,920
Speaker 9: particular is going to start producing a little bit more

545
00:28:26,960 --> 00:28:28,879
Speaker 9: because their baseline production is going to start to be

546
00:28:28,960 --> 00:28:33,439
Speaker 9: inching up, and other countries like Saudi Arabia and Russia

547
00:28:33,480 --> 00:28:37,159
Speaker 9: and other countries that have made extra voluntary cuts are

548
00:28:37,240 --> 00:28:41,760
Speaker 9: going to slowly start to unwind those mid twenty twenty five.

549
00:28:41,880 --> 00:28:44,640
Speaker 9: So this is really just a very gradual process. And

550
00:28:44,760 --> 00:28:47,200
Speaker 9: I think part of it is because they really didn't

551
00:28:47,200 --> 00:28:49,440
Speaker 9: want to shock the market. They really don't want prices

552
00:28:49,560 --> 00:28:52,600
Speaker 9: to fall. I think they're very happy, or at least

553
00:28:52,600 --> 00:28:56,000
Speaker 9: Saudi Arabia is quite happy with prices in you know,

554
00:28:56,120 --> 00:28:58,800
Speaker 9: in the eighties that generally tends to be prices that

555
00:28:58,840 --> 00:29:01,200
Speaker 9: Saudi Arabia seas is good because the Saudis do not

556
00:29:01,320 --> 00:29:04,239
Speaker 9: want prices to be too high. They're not like, oh,

557
00:29:04,280 --> 00:29:07,280
Speaker 9: we want one hundred and twenty dollars a barrel a country,

558
00:29:07,320 --> 00:29:10,840
Speaker 9: because they see that as basically asking for demand destruction

559
00:29:11,280 --> 00:29:13,960
Speaker 9: and they want to sell their oil, so you know,

560
00:29:14,200 --> 00:29:15,960
Speaker 9: it is kind of a sweet spot that they're trying

561
00:29:15,960 --> 00:29:19,800
Speaker 9: to maintain. I think that prices probably will recover unless

562
00:29:19,800 --> 00:29:24,720
Speaker 9: there's some serious signs of you know, economic trouble, you know,

563
00:29:24,880 --> 00:29:27,480
Speaker 9: heading into say a bit of full blown recession or

564
00:29:27,520 --> 00:29:29,960
Speaker 9: something like that. I do think otherwise we are seeing

565
00:29:30,000 --> 00:29:33,000
Speaker 9: pretty strong demand and I think prices will probably recover.

566
00:29:33,680 --> 00:29:36,080
Speaker 9: You know, Brett will recover to the eighties at least

567
00:29:36,080 --> 00:29:36,720
Speaker 9: the low eighties.

568
00:29:37,080 --> 00:29:40,480
Speaker 2: So Ellen, is it unusual for OPEC to forecast kind

569
00:29:40,520 --> 00:29:43,680
Speaker 2: of production levels, you know, so far in advance, it

570
00:29:43,720 --> 00:29:45,440
Speaker 2: seems like we've been almost on a month to month

571
00:29:45,840 --> 00:29:47,640
Speaker 2: kind of scenario with OPEK and what are they going

572
00:29:47,680 --> 00:29:49,640
Speaker 2: to do with their cuts? But now they're kind of

573
00:29:49,640 --> 00:29:51,920
Speaker 2: giving us some visibility into next year.

574
00:29:53,240 --> 00:29:55,959
Speaker 9: Yeah, it's it's it's like a whole new world because

575
00:29:56,440 --> 00:29:58,400
Speaker 9: we kind of got used to this idea of OPEC

576
00:29:58,480 --> 00:30:00,560
Speaker 9: meets every month. Every month there's a new OPEC meeting.

577
00:30:00,720 --> 00:30:02,880
Speaker 9: Who knows are they going to increase production, decrease it,

578
00:30:03,040 --> 00:30:05,000
Speaker 9: keep it the same, you know, and and so every

579
00:30:05,040 --> 00:30:06,720
Speaker 9: month they kind of had to put this together. And

580
00:30:07,240 --> 00:30:08,880
Speaker 9: I think some people thought that this was a good

581
00:30:08,960 --> 00:30:10,880
Speaker 9: thing because it meant OPEK was, you know, on top

582
00:30:10,920 --> 00:30:13,480
Speaker 9: of the market, ready to make adjustments for everything that

583
00:30:13,600 --> 00:30:16,280
Speaker 9: was happening. But at the same time, there was no

584
00:30:16,520 --> 00:30:18,560
Speaker 9: long term since you know, there's no sense of what

585
00:30:18,680 --> 00:30:20,880
Speaker 9: they were looking for long term. If OPEC really wants

586
00:30:20,960 --> 00:30:25,080
Speaker 9: to be this kind of market manager, you know, ensuring

587
00:30:25,440 --> 00:30:28,320
Speaker 9: price stability, which is really kind of what they want,

588
00:30:28,720 --> 00:30:30,600
Speaker 9: then they need to lay out some kind of long

589
00:30:30,680 --> 00:30:33,720
Speaker 9: term vision. And this is what we've got now. Is

590
00:30:33,760 --> 00:30:36,800
Speaker 9: the market going to go the way OPEK expects absolutely not.

591
00:30:36,880 --> 00:30:38,320
Speaker 9: I think we could say for sure that's the only

592
00:30:38,400 --> 00:30:40,240
Speaker 9: thing we know is that things are not going to

593
00:30:40,280 --> 00:30:44,080
Speaker 9: play out exactly as they planned. But uh, but we

594
00:30:44,240 --> 00:30:47,520
Speaker 9: can What we can know is that this is what

595
00:30:47,720 --> 00:30:49,280
Speaker 9: OPEK wants to happen.

596
00:30:49,360 --> 00:30:52,200
Speaker 5: This is their their goal, and it may not play.

597
00:30:52,080 --> 00:30:55,640
Speaker 9: Out exactly as they have foreseen and they have laid

598
00:30:55,640 --> 00:30:58,040
Speaker 9: out now they've they've gone to a pretty complex set

599
00:30:58,120 --> 00:31:00,000
Speaker 9: of you know, and this month we're going to increase

600
00:31:00,080 --> 00:31:02,120
Speaker 9: by this manta, next month, this Now, it's a very

601
00:31:02,160 --> 00:31:05,400
Speaker 9: complex set of steps. But at the same time, the

602
00:31:05,520 --> 00:31:09,480
Speaker 9: fact that that traders and also consumers have a sense

603
00:31:09,520 --> 00:31:11,640
Speaker 9: of where OPEC wants things to go, I think is

604
00:31:11,800 --> 00:31:14,520
Speaker 9: very very helpful for the long term health of the market.

605
00:31:15,080 --> 00:31:18,840
Speaker 5: What do you think is the most likely outcome to unfold?

606
00:31:18,880 --> 00:31:23,200
Speaker 5: Would it be that just an extension of all existing

607
00:31:23,560 --> 00:31:25,440
Speaker 5: output targets would come to fruition?

608
00:31:27,320 --> 00:31:30,040
Speaker 9: H Well, I think I think that that that's generally

609
00:31:30,160 --> 00:31:33,160
Speaker 9: where they are. You know, things could change though on

610
00:31:33,280 --> 00:31:35,920
Speaker 9: a dime. We could have a major hurricane that knocks

611
00:31:35,960 --> 00:31:38,640
Speaker 9: out production in the Gulf of Mexico for a month

612
00:31:38,760 --> 00:31:40,920
Speaker 9: or more, and then we could see OPEC to act

613
00:31:40,960 --> 00:31:43,400
Speaker 9: and say, hey, we're you know, we're going to increase

614
00:31:43,440 --> 00:31:46,440
Speaker 9: production by two point two million barrels a day starting

615
00:31:46,560 --> 00:31:49,200
Speaker 9: you know, next week. So that's that's definitely the kind

616
00:31:49,200 --> 00:31:51,360
Speaker 9: of thing that is not at all out of the question,

617
00:31:51,960 --> 00:31:53,720
Speaker 9: and so you have to be prepared for this, and

618
00:31:53,880 --> 00:31:58,160
Speaker 9: OPEC is certainly prepared to make adjustments as market conditions warrant.

619
00:31:58,640 --> 00:32:01,640
Speaker 9: But the fact that we know that that barring these

620
00:32:01,760 --> 00:32:04,240
Speaker 9: kinds of things, that if things happen the way they do,

621
00:32:05,080 --> 00:32:07,800
Speaker 9: you know, the way OPEP four seas, then they are

622
00:32:07,920 --> 00:32:10,320
Speaker 9: there's going to be a very kind of slow and

623
00:32:10,440 --> 00:32:14,400
Speaker 9: gentle unwinding of of cuts and there will be more

624
00:32:14,440 --> 00:32:17,880
Speaker 9: supply coming on the market, you know, say by next year.

625
00:32:17,920 --> 00:32:20,560
Speaker 2: At this time, Ellen talk to us about the American

626
00:32:20,600 --> 00:32:24,320
Speaker 2: producers were good friends in Texas and Oklahoma. What are

627
00:32:24,360 --> 00:32:26,160
Speaker 2: they doing in terms of supply these days?

628
00:32:27,600 --> 00:32:29,680
Speaker 9: I think it's stayed to say are good friends in Texas?

629
00:32:29,760 --> 00:32:33,560
Speaker 9: Are not partying like it's twenty fifteen or twenty sixteen.

630
00:32:34,360 --> 00:32:37,160
Speaker 9: This is no longer the same market that we saw

631
00:32:37,280 --> 00:32:39,560
Speaker 9: back then, where it was kind of the wild West

632
00:32:39,640 --> 00:32:43,240
Speaker 9: of production. You know, tons of small companies, everyone was

633
00:32:43,320 --> 00:32:46,720
Speaker 9: just producing, producing, producing. The cash was flowing from the investors.

634
00:32:46,760 --> 00:32:49,480
Speaker 9: The idea was just keep up production targets. You know,

635
00:32:49,600 --> 00:32:52,680
Speaker 9: didn't even matter if you weren't breaking even you know,

636
00:32:53,200 --> 00:32:56,480
Speaker 9: just produce, produced, produce, drill those wells, get those barrels

637
00:32:56,480 --> 00:32:58,920
Speaker 9: out there. You know, meat payroll. Those days are gone.

638
00:32:59,640 --> 00:33:01,600
Speaker 4: They there are way in the rear view mirror.

639
00:33:01,960 --> 00:33:04,719
Speaker 9: We've got, you know, a lot of consolidations. We've got

640
00:33:04,760 --> 00:33:08,840
Speaker 9: people making very smart decisions about where they're drilling and

641
00:33:09,000 --> 00:33:11,520
Speaker 9: exactly how much oil they plan to get from wells.

642
00:33:11,560 --> 00:33:15,280
Speaker 9: There's a lot of very precise imaging going on. A

643
00:33:15,320 --> 00:33:17,760
Speaker 9: lot of these companies are considering exactly what's around them.

644
00:33:17,800 --> 00:33:22,200
Speaker 9: Their acreage has expanded, They're making very educated decisions about

645
00:33:22,840 --> 00:33:25,280
Speaker 9: what wils to bring on the market. They're also facing

646
00:33:25,360 --> 00:33:29,040
Speaker 9: a lot of inflationary pressures. We often think that inflation

647
00:33:29,280 --> 00:33:31,960
Speaker 9: is something that high oil prices cause on the rest

648
00:33:32,000 --> 00:33:35,959
Speaker 9: of us, but these oil companies also feel the effects

649
00:33:35,960 --> 00:33:38,680
Speaker 9: of inflation. And it costs a lot more to drill

650
00:33:38,800 --> 00:33:41,440
Speaker 9: to complete wells than it used to, and so you know,

651
00:33:41,520 --> 00:33:44,320
Speaker 9: we have to take that into consideration when we're looking

652
00:33:44,440 --> 00:33:47,000
Speaker 9: at what's going on. I think the wave of consolidations

653
00:33:47,080 --> 00:33:49,640
Speaker 9: is probably good for the industry. It's definitely much better

654
00:33:49,760 --> 00:33:53,480
Speaker 9: for kind of managing things, keeping prices more stable.

655
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Speaker 5: Than we saw.

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Speaker 9: But it's not always so great for jobs because when

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Speaker 9: more efficiency comes in, jobs had to get eliminated.

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Speaker 2: All right, Ellen, thank you so much for joining us.

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Speaker 2: As always, Ellen Wald, she's president of Transversal Consulting and

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Speaker 2: Senior Fellow at the Atlanta Council, one of her go

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Speaker 2: to voices on global energy.

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Speaker 1: This is the Bloomberg Intelligence Podcast, available on apples, Spotify,

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Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

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Speaker 1: ten am to noon Eastern on Bloomberg dot com, the

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Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You

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Speaker 1: can also watch us live every weekday on YouTube and

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Speaker 1: always on the Bloomberg terminal