WEBVTT - Virgin Galactic Reaches New Heights 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.279 at Bloomberg dot com slash podcast. Taylor, when I was 0:00:22.320 --> 0:00:25.120 a kid, it was about space was big. We had 0:00:25.200 --> 0:00:28.800 the Apollo program. Um, you know, we'd watch it from 0:00:28.880 --> 0:00:31.720 school in our classrooms. Launches and splashdowns in the middle 0:00:31.720 --> 0:00:33.200 of the ocean. We have people walking on the moon. 0:00:33.240 --> 0:00:37.080 It was really really cool time. Space is making a 0:00:37.120 --> 0:00:39.680 big comeback. You know, it's been kind of quiet since 0:00:39.680 --> 0:00:41.840 the Space Shuttle era, but it's making a big comeback. 0:00:41.840 --> 0:00:45.000 And now we've got billionaires going up seemingly weekly here 0:00:45.040 --> 0:00:47.080 into space or Richard Branson over the weekend. I think 0:00:47.120 --> 0:00:49.920 we've got Jeff Bezos and a matter of days and 0:00:49.920 --> 0:00:53.000 then Elon Musk is out there somewhere. I'm sure, um, 0:00:53.080 --> 0:00:55.360 let's get an over you what's going on in the 0:00:55.400 --> 0:00:58.640 world of space. Laura for Sick Space analysts and owner 0:00:58.680 --> 0:01:02.720 of Astroltical, author of rise of the space age millennial. 0:01:02.800 --> 0:01:08.000 She's also NASA subject matter expert for Planetary Science Missions. Laura, 0:01:08.080 --> 0:01:10.920 this is really a cool time for space travel and 0:01:11.000 --> 0:01:15.479 people that are really into space travel. UM, give us 0:01:15.760 --> 0:01:19.960 your sense, your takeaway on the importance of Sir Richard 0:01:19.959 --> 0:01:23.560 Branson's flight yesterday and the upcoming Jeff Bezos flight. What 0:01:23.640 --> 0:01:25.759 does it tell you about the future of space travel. 0:01:26.600 --> 0:01:28.440 This is really a great time because this is the 0:01:28.480 --> 0:01:32.560 emergence of true commercial private space flight. Where back in 0:01:32.600 --> 0:01:35.440 the two thousands we saw commercial space flight beginning with 0:01:35.520 --> 0:01:38.440 tourists going to the International Space Station, but through Russian 0:01:38.560 --> 0:01:42.000 rockets and Russian training, and now we're seeing purely commercial 0:01:42.000 --> 0:01:46.720 efforts where um, just now yesterday we saw Richard Branson 0:01:46.720 --> 0:01:49.880 and a crew flying on his own rocket through Virgin 0:01:49.920 --> 0:01:51.960 Chalactic and then, as you said, in about eight days, 0:01:51.960 --> 0:01:54.960 we're going to see Jeff Bezos and his crew fly 0:01:55.280 --> 0:01:58.520 on a Blue Origin rocket. And then later this year 0:01:58.560 --> 0:02:02.200 in September, we're gonna see a crew go to um 0:02:02.640 --> 0:02:05.040 orbital space and just orbit Earth for a few days 0:02:05.040 --> 0:02:08.240 through the inspiration formission with Space Sex. So lots of 0:02:08.280 --> 0:02:12.359 really great private spacelight going on, Laura, is it okay 0:02:12.440 --> 0:02:15.399 to ask sort of how you're thinking about the difference 0:02:15.480 --> 0:02:20.240 between the Virgin Galactic versus the Blue Origin. There's differences, 0:02:20.280 --> 0:02:23.680 I believe in one has a few pilots. One I 0:02:23.720 --> 0:02:26.400 think is more automated. Is there a difference in the 0:02:26.400 --> 0:02:32.000 way you're thinking about profitability for these companies or just frankly, 0:02:32.080 --> 0:02:35.200 the technicals of of going up there on on two 0:02:35.320 --> 0:02:39.880 or three different different ships that are operated differently. You're 0:02:39.880 --> 0:02:42.240 exactly right, there's a there's a big difference between the two. 0:02:42.320 --> 0:02:44.720 So one yesterday we saw was a carrier plane that 0:02:44.800 --> 0:02:47.320 released a space plane that launched with two pilots and 0:02:47.400 --> 0:02:50.359 four passengers. And the one that we're going to see 0:02:50.360 --> 0:02:52.799 in eight days Blue Origin is the traditional rocket with 0:02:52.880 --> 0:02:55.200 a capital on top and a capsule separates and lands 0:02:55.240 --> 0:02:58.120 with parachutes. So that is a difference in approach, and 0:02:58.160 --> 0:02:59.919 we're going to have to see how the market plays 0:03:00.000 --> 0:03:02.959 out on whether customers prefer one method or the other, 0:03:03.080 --> 0:03:05.440 or whether safety plays out one method or the other. 0:03:05.680 --> 0:03:07.400 But I think it's too early to say that one 0:03:07.440 --> 0:03:09.239 is better than the other. I think we're just gonna 0:03:09.280 --> 0:03:10.880 have to see, and I will go on both of them. 0:03:11.600 --> 0:03:13.799 I'm sure you and I would too. I'm not sure 0:03:13.919 --> 0:03:15.959 two or fifty thousand dollars a seat though, but for 0:03:16.240 --> 0:03:19.160 a lot of folks probably worth it. So, Laura, what's 0:03:19.200 --> 0:03:21.920 the what are like next steps do you think for 0:03:22.080 --> 0:03:26.359 the commercialization if you will, of space and space travel? 0:03:26.400 --> 0:03:28.640 What are there? I mean, these things are great, Uh, 0:03:28.720 --> 0:03:31.880 it's really interesting, but what are the next steps? We're 0:03:31.880 --> 0:03:35.600 seeing these two sub orbital carriers come online with paying 0:03:35.640 --> 0:03:39.160 passengers and also science. There's science has being done. There 0:03:39.160 --> 0:03:41.640 was a science experiment on the one yesterday, So there's 0:03:41.640 --> 0:03:44.920 some really great opportunities there for not just rich tourists, 0:03:45.000 --> 0:03:49.240 but also for research institutions, NASA and other governments that 0:03:49.320 --> 0:03:51.320 might be able to fly their science or do training 0:03:51.360 --> 0:03:54.040 for astronauts. There's also think I said, space X, who 0:03:54.120 --> 0:03:56.720 is going to be flying not just um, not just 0:03:56.800 --> 0:03:59.480 paying people to the International Space Station as they've been 0:03:59.480 --> 0:04:02.720 doing with the astronauts since last year, but also just 0:04:02.800 --> 0:04:05.000 in orbit around the Earth and a free flyer just 0:04:05.040 --> 0:04:07.920 doing a crew dragon fleece free flyer not even attached 0:04:07.960 --> 0:04:10.520 to the space station. But speaking of space stations, there 0:04:10.560 --> 0:04:13.080 are going to be private space stations coming on board 0:04:13.120 --> 0:04:15.360 in the next decade, so we should see companies like 0:04:15.400 --> 0:04:18.440 Axiom Space and others starting to put up space stations 0:04:18.480 --> 0:04:21.400 that will um work with the International Space Station and 0:04:21.440 --> 0:04:25.159 eventually replace the International Space Station. It's just incredible, I 0:04:25.160 --> 0:04:27.280 think when you think about how far we've come, Paul 0:04:27.360 --> 0:04:31.200 in the last even just decade in terms of commercial 0:04:31.400 --> 0:04:34.800 space flight, and and Laura, I mean it's interesting hearing 0:04:34.920 --> 0:04:39.479 some funny conversations earlier this morning that eventually we'll run 0:04:39.520 --> 0:04:42.800 out of billionaires who can afford this, and it'll want 0:04:42.839 --> 0:04:46.080 to be more mass market. How are you thinking about 0:04:46.320 --> 0:04:50.160 pricing and making it more affordable? What does that look 0:04:50.160 --> 0:04:53.159 like to you? Right so, right now, a trip to 0:04:53.160 --> 0:04:56.239 the International Space Station costs roughly fifty million dollars. There's 0:04:56.240 --> 0:04:58.320 not many people who can't afford that, but a trip 0:04:58.360 --> 0:05:01.120 to several will space is were affordable for for a 0:05:01.200 --> 0:05:04.080 larger group of people. Still not me, but as you said, 0:05:04.279 --> 0:05:06.200 roughly a quarter of a million dollars. We don't know 0:05:06.240 --> 0:05:08.040 the price that Blue Origin is going to sell their 0:05:08.040 --> 0:05:10.719 tickets for um, and that might be affordable for people 0:05:10.760 --> 0:05:13.680 who save up enough money or for people who are sponsored. 0:05:13.680 --> 0:05:16.240 There's a group called Space for Humanity and other groups 0:05:16.240 --> 0:05:19.159 that are trying to sponsor the quote unquote normal people 0:05:19.279 --> 0:05:22.320 who can fly on suborbital space flight. Um. And then 0:05:22.440 --> 0:05:25.880 as this technology become more and more common, just as 0:05:25.960 --> 0:05:28.800 other technologies started out with the wealthy and then we're 0:05:28.880 --> 0:05:31.640 brought downs in price to make it more accessible to 0:05:31.640 --> 0:05:34.200 the common person. The theory is that will happen with 0:05:34.240 --> 0:05:37.760 spaceflight as well. So Laura just want to get a 0:05:37.800 --> 0:05:39.840 sense here what I grew up again, It was NASA, 0:05:39.880 --> 0:05:42.839 It was the U. S. Government leading the way. My 0:05:42.920 --> 0:05:46.080 question now is where is NASA in the global space 0:05:46.520 --> 0:05:49.960 competitive race visa v. China, Russia. Where we as a 0:05:50.080 --> 0:05:53.200 country now as becomes you know, maybe some of the 0:05:53.200 --> 0:05:58.080 responsibility shifts from NASA to these commercial entities. NASA is 0:05:58.200 --> 0:06:00.599 very focused on its Artemis program right now, which is 0:06:00.640 --> 0:06:03.280 going to send the next the next man, and the 0:06:03.320 --> 0:06:05.760 first woman and the first person's color to the Moon. 0:06:06.160 --> 0:06:09.200 It is as soon as four and that's really exciting 0:06:09.240 --> 0:06:11.960 because there is a bit of a jew political competition 0:06:12.000 --> 0:06:14.720 there because the Chinese and the Russian partner to do 0:06:15.080 --> 0:06:17.880 a winner base as well. It's in a different time frame, 0:06:17.880 --> 0:06:20.640 about a decade later than NASA intends to. But NASA's 0:06:20.680 --> 0:06:23.159 partnering with countries all around the world something called the 0:06:23.279 --> 0:06:27.200 Artemis Accords where they partnered with twelve countries around the world. Um, 0:06:27.200 --> 0:06:29.560 it's gonna be a real international partnership there. It's not 0:06:29.600 --> 0:06:31.359 going to be like the Apollo program where it was 0:06:31.720 --> 0:06:34.039 mainly you focused on the United States. This is really 0:06:34.080 --> 0:06:36.360 going to be an international partnership. We even have a 0:06:36.360 --> 0:06:40.240 Canadian astronaut confirmed to fly with American astronaut on the 0:06:40.320 --> 0:06:43.640 Artemist mission around the Moon before the first woner landing 0:06:43.720 --> 0:06:45.960 in the Artemist three mission. So that's really exciting to 0:06:45.960 --> 0:06:49.560 see us finally returned back to the Moon. Laura, I'm 0:06:49.560 --> 0:06:50.960 going to get a lot of hate mail for this, 0:06:51.080 --> 0:06:52.760 but it's my job to ask, so I'm going to 0:06:52.880 --> 0:06:54.640 ask it anyways. I'm going to try to do this 0:06:54.720 --> 0:06:58.599 in the nicest way possible as a space analyst, what 0:06:58.800 --> 0:07:03.200 is the risk the headline risk around the carbon footprint. 0:07:03.240 --> 0:07:06.159 I mean, you think about all the focus on going 0:07:06.200 --> 0:07:08.760 green and protecting our planet and then you have a 0:07:08.760 --> 0:07:11.280 bunch of billionaires who are going into space for fun. 0:07:11.960 --> 0:07:15.200 Is there a risk of any backlash on wondering what 0:07:15.280 --> 0:07:20.120 this is doing to the environment. It's no more harmful 0:07:20.120 --> 0:07:22.280 to the environment than the other types of transportation that 0:07:22.280 --> 0:07:25.400 we use is a key that's a key point right there, 0:07:25.480 --> 0:07:28.360 right that we need to be responsible and how we 0:07:28.600 --> 0:07:31.840 develop our technology and improve our technology to be responsible 0:07:31.840 --> 0:07:34.000 stewards of Earth. And one thing that I would like 0:07:34.080 --> 0:07:36.600 to personally experience I've only heard from other astronauts is 0:07:36.640 --> 0:07:39.280 something called the open view effect where people who see 0:07:39.280 --> 0:07:42.160 the Earth from above, whether that's in orbit or in 0:07:42.240 --> 0:07:46.040 SubOrbit um, they come across a different perspective where they 0:07:46.080 --> 0:07:50.120 actually feel more environmentally connected to our planet. So that 0:07:50.240 --> 0:07:52.560 might be a way that changes people's minds and makes 0:07:52.560 --> 0:07:55.680 them more environmentally conscious by seeing our Earth as one 0:07:55.760 --> 0:07:58.400 fragile planet. Hey Laura, thanks so much for joining us, 0:07:58.480 --> 0:08:01.400 or really appreciate you coming on and sharing your thoughts. 0:08:01.480 --> 0:08:04.880 Law Force like space annalys and owner of Asterioltical, also 0:08:05.040 --> 0:08:11.360 rise of the Space age millennials. This is Bloomberg. You know. 0:08:11.400 --> 0:08:14.040 As I talked to Tom Keane, as I typically do, 0:08:14.160 --> 0:08:16.400 it's always a question of when do we get Tom 0:08:16.440 --> 0:08:18.800 into this market. He's in that triple leverage all cash 0:08:18.840 --> 0:08:22.640 fund and uh, he always feels like he's missed his opportunity. 0:08:22.960 --> 0:08:25.520 But here we are at all time highs again for 0:08:25.560 --> 0:08:28.640 the equity Indusseries is it time to raise cash? What 0:08:28.680 --> 0:08:31.040 do we do here? David ko Talk, chairman and chief 0:08:31.040 --> 0:08:34.080 investment officer Kumblin Advisors, joins us. I believe he's in 0:08:34.160 --> 0:08:37.000 Colorado today. Why would you be in Florida when you 0:08:37.000 --> 0:08:40.160 can be in Colorado in uh the summer. David, thanks 0:08:40.160 --> 0:08:42.400 so much for joining us here. Again, what do we 0:08:42.440 --> 0:08:47.000 tell our good friend Tom Keane about these equity markets? Well, 0:08:47.040 --> 0:08:50.800 thank you very much, fall and I gathered Taylor as 0:08:50.920 --> 0:08:53.440 with you, and it's very nice to chat with old 0:08:53.480 --> 0:08:57.400 friends from Summit County, Colorado, where nine thousand feet nice 0:08:57.559 --> 0:09:01.080 and you just announced Webber Grill and I would say, 0:09:01.160 --> 0:09:05.040 if Taylor and you can find your way to Colorado, 0:09:05.240 --> 0:09:08.440 I will cook you a steak on the deck on 0:09:08.600 --> 0:09:13.719 that Webb grilled sole. As for Tom Kane and what 0:09:13.800 --> 0:09:16.280 he should do with cash, I can't say, but I 0:09:16.360 --> 0:09:19.640 can tell you we have built a cash reserve here recently. 0:09:20.480 --> 0:09:24.600 We are not fully invested. Um. It's been a marvelous 0:09:24.720 --> 0:09:30.880 first quarter, much beyond anyone's expectations. And my grandfather, bless 0:09:31.000 --> 0:09:35.080 his memory, taught me you never get hurt taking some profits. 0:09:35.120 --> 0:09:38.080 So we took a part of the profits of the 0:09:38.120 --> 0:09:41.160 first quarter where we had achieved in six months what 0:09:41.280 --> 0:09:44.440 we thought we would achieve in the whole year, and 0:09:44.520 --> 0:09:48.480 we banked a little and are waiting for opportunity. The 0:09:48.640 --> 0:09:52.599 rest of the portfolios in the United States et F 0:09:52.840 --> 0:09:57.520 structured portfolio, the U S. E t F portfolio is 0:09:58.080 --> 0:10:03.520 heavily overweight. The health sector almost double market wait market 0:10:03.520 --> 0:10:05.920 wait for the if you look at the sectors is 0:10:05.960 --> 0:10:11.640 approximately four or so. We're about twenty eight, very broadly 0:10:11.679 --> 0:10:19.280 diversified within healthcare, devices, parmaceutical, biotech, the gamut structured with 0:10:19.440 --> 0:10:23.000 E t F, and we believe the pandemic is not 0:10:23.240 --> 0:10:27.959 over long haul Covid is with us for a while, 0:10:28.720 --> 0:10:33.280 maybe years, and the healthcare sector has a monumental task 0:10:33.440 --> 0:10:36.920 ahead of it and will step up and deliver results 0:10:36.920 --> 0:10:39.200 as best as it care. You know, David, we love 0:10:39.240 --> 0:10:42.960 getting you on this program more than just the opportunity 0:10:43.120 --> 0:10:45.960 to have you grill us some stakes. You mentioned you're 0:10:45.960 --> 0:10:50.199 not fully invested, and I am curious, what would it take. 0:10:50.600 --> 0:10:54.400 What is the opportunity? Is it a ten pullback? What 0:10:54.640 --> 0:10:58.920 is it that you would be willing to commit more cash? Well, 0:10:59.520 --> 0:11:05.240 I think there's several major issues about which there's uncertainty. 0:11:05.400 --> 0:11:09.360 Uncertainty means you can't put probabilities on that. Taylor. We 0:11:09.440 --> 0:11:14.480 don't know where this China initiative, which is anti US, 0:11:14.640 --> 0:11:19.320 anti capital markets, pulling I p o s, putting on restrictions, 0:11:19.400 --> 0:11:23.240 dealing with two hundred and fifty securities of various types 0:11:23.280 --> 0:11:27.040 that trade in the United States, is going to lead us. 0:11:27.120 --> 0:11:30.520 We have a capital market conflict between the United States 0:11:30.600 --> 0:11:34.120 and China, the two largest economies in the world number one. 0:11:34.160 --> 0:11:37.240 We don't know where that goes, but it can't be pretty. Second, 0:11:37.600 --> 0:11:40.480 we don't have herd immunity in the United States, and 0:11:40.559 --> 0:11:47.199 we have twenty five of the population that is rejecting science. 0:11:47.720 --> 0:11:51.280 Now there's a debate about science, no question about it, 0:11:51.720 --> 0:11:55.719 but there's also evidence. And when you look around, you 0:11:55.760 --> 0:12:01.400 see that the vaccination rollout is not work being completely 0:12:01.520 --> 0:12:04.040 as expected. You then you look at the rest of 0:12:04.080 --> 0:12:07.600 the world and you say, there's six point eight billion 0:12:07.679 --> 0:12:10.600 people out of seven point eight billions that have not 0:12:10.800 --> 0:12:14.600 had a vaccination at all. They're in places where public 0:12:14.640 --> 0:12:20.120 health systems are deficient. So these are massive shocks in 0:12:20.200 --> 0:12:24.720 addition to fires and climate change as a massive shock. 0:12:25.160 --> 0:12:28.680 So what do you do when you have several black 0:12:28.800 --> 0:12:34.320 swans flying around in the flock. You pause, you put 0:12:34.360 --> 0:12:37.719 some cash on the side, you wait, you say, I 0:12:37.840 --> 0:12:41.640 don't know, and therefore I've had a great run in 0:12:41.679 --> 0:12:45.760 the stock market recovery. Now I need to pause, and 0:12:45.840 --> 0:12:49.280 that's what we're doing when we redeploy and where remains 0:12:49.360 --> 0:12:52.640 to be seen were open, but we're not committing to 0:12:52.760 --> 0:12:56.800 that now. David, about thirty seconds left. What is what 0:12:56.840 --> 0:12:58.560 do you think will be the next movement by this 0:12:58.600 --> 0:13:02.600 foot to reserve? Well, I think that FAID doesn't do 0:13:02.679 --> 0:13:05.880 anything until they get to the Jackson Whole meeting, and 0:13:05.920 --> 0:13:13.440 then they have to soft gradualistically, very baby steps, try 0:13:13.679 --> 0:13:17.360 to ease back on easing, a very difficult task or 0:13:17.400 --> 0:13:21.880 any central bank, especially ours, under these circumstances. That's how 0:13:21.880 --> 0:13:24.520 it looks to Bigful. All right, David, thank you so much. 0:13:24.600 --> 0:13:29.440 We as always appreciate your time. Enjoy the cool weather, 0:13:29.480 --> 0:13:32.440 hopefully out in ten thousand feet in Colorado. David Ko talk, 0:13:32.679 --> 0:13:35.480 chairman and chief investment officer Cumbling Advisors again. They have 0:13:35.480 --> 0:13:37.920 about three billion dollars in assets under management, and I 0:13:38.000 --> 0:13:41.320 love Taylor, David. He tells you exactly what he's doing 0:13:41.400 --> 0:13:44.000 with his cash, whether he's building cash, putting it to work. 0:13:44.040 --> 0:13:47.600 It's really an interesting perspective, and he's one of the 0:13:47.640 --> 0:13:51.120 guys that is the in the middle of all the 0:13:51.160 --> 0:13:54.240 craziness of Muni bonds and the technicals and actually manages 0:13:54.280 --> 0:13:56.720 to sit down and explain it to you and great 0:13:56.800 --> 0:14:03.040 Muni portfolio as well. So that's certainly some fun memories. Well, 0:14:03.080 --> 0:14:05.360 I'm gonna bring it. Ben Emmon's managing director of Global 0:14:05.400 --> 0:14:09.200 macro Strategy at Medley Global Advisors, because I get his 0:14:09.840 --> 0:14:12.320 research notes and the problem with his research notes is 0:14:12.360 --> 0:14:14.480 he writes just too many of them, so whenever they 0:14:14.559 --> 0:14:16.880 hit my inbox, I gotta stop. But I'm ever I'm 0:14:16.920 --> 0:14:19.240 doing and read them because there's always good stuff in there. 0:14:19.280 --> 0:14:21.720 But before we get the earnings and markets and all 0:14:21.720 --> 0:14:24.440 that kind of stuff, I'm gonna talk space with Ben. Ben. 0:14:24.840 --> 0:14:27.640 We saw sir Richard Branson go into space over the weekend. 0:14:28.680 --> 0:14:31.400 Is this a business as as an investor? Do you 0:14:31.440 --> 0:14:35.480 pay attention to that kind of stuff? Hi? Thanks for 0:14:35.520 --> 0:14:38.280 having us, Yeah, you'll pay attention. You know, it was 0:14:38.320 --> 0:14:41.000 obviously an amazing moments. I have to have this commercial 0:14:41.000 --> 0:14:44.120 flights into space. You know what I think is really 0:14:44.240 --> 0:14:46.360 good by Richard Branson is you know, he's the CEO 0:14:46.400 --> 0:14:48.280 of the company, and he takes the risk right to 0:14:48.320 --> 0:14:51.080 go up there because it's not without risk, and then 0:14:51.320 --> 0:14:54.000 comes down back to Earth safety and says, I just 0:14:54.040 --> 0:14:56.680 did the customer experience that just showed you live on 0:14:56.840 --> 0:15:00.120 Twitter in the capsule what you can experience me go 0:15:00.200 --> 0:15:02.560 up in space. Right, So you know that's a perfect 0:15:02.840 --> 0:15:06.640 marketing strategy. But it does highlight how far we've gotten 0:15:06.680 --> 0:15:08.880 with this technology. And he spoke to that this was 0:15:08.920 --> 0:15:11.360 not he was dreaming about this like two thousand and 0:15:11.400 --> 0:15:13.360 four because of seven so that they were working on 0:15:13.360 --> 0:15:16.840 these plans to get themselves up in space. So I 0:15:17.280 --> 0:15:19.080 guess what will happen in the future will go a 0:15:19.120 --> 0:15:21.120 lot faster. Now we're gonna get a lot more flights 0:15:21.120 --> 0:15:23.760 in the future. And if you look at that business, 0:15:23.960 --> 0:15:28.560 you know they estimate that the total valuation of space economy. 0:15:28.600 --> 0:15:31.520 So to speaks about how the fifty eight billion, which 0:15:31.560 --> 0:15:34.440 is a lot of different elements to it, but you know, 0:15:34.480 --> 0:15:38.560 as in space exploration and all kinds of industrial activity, 0:15:38.960 --> 0:15:43.640 but that can become significantly larger with events every so yesterday, 0:15:43.680 --> 0:15:46.200 So I think if I would put my mind into 0:15:46.280 --> 0:15:48.640 Kathy Wood's mind, I'd say, like she's probably right, like 0:15:48.720 --> 0:15:52.400 this is a a new industry and Richard Branson just 0:15:52.480 --> 0:15:55.360 took this right up lead bound with a rocket right 0:15:55.360 --> 0:15:58.480 there yesterday. You know, you want to talk about other 0:15:58.520 --> 0:16:01.000 things that the market is certainly in attention to. Ben. 0:16:01.040 --> 0:16:03.000 We love that you can go across a set for us, 0:16:03.040 --> 0:16:06.360 from space tourism to bond yields, and I feel like 0:16:06.360 --> 0:16:09.440 we're at that sweet spot where we were happy that 0:16:09.480 --> 0:16:12.640 bond yields came down because of the way that that 0:16:12.680 --> 0:16:16.080 can inflate some of the equity valuations, but it's also 0:16:16.160 --> 0:16:18.480 given us a little bit of a worrying signal about 0:16:18.480 --> 0:16:21.320 the future of economic growth. Where are you in the 0:16:21.480 --> 0:16:24.240 sweet spot of what yields are telling you at this moment? 0:16:26.000 --> 0:16:29.000 You're right, Taylor, there is you know something about the 0:16:29.040 --> 0:16:32.800 climbing yields in an environment where economic data is really strong. 0:16:33.520 --> 0:16:36.600 It doesn't coinciber one another. And it reminds me a 0:16:36.640 --> 0:16:39.720 little bit of you know, prefinential crisis and the two 0:16:40.000 --> 0:16:43.000 five beer. You know, really strong economy, strong housing market, 0:16:43.040 --> 0:16:46.640 a lot of confidence, but yields with data decline. So 0:16:46.680 --> 0:16:48.200 there is a bit of a dynamic on the one 0:16:48.240 --> 0:16:51.800 hand of positioning that's that's causing that so people were 0:16:51.840 --> 0:16:55.120 short and get wrong fooded is I think improved message 0:16:55.160 --> 0:16:57.640 by theF fect just like back then, maybe someone more 0:16:57.640 --> 0:17:00.240 predictable what we can expect it. There's a tapering, but 0:17:00.320 --> 0:17:03.600 there's also something about the economy itself and be made 0:17:03.680 --> 0:17:06.480 gotten to a point of of a form of overheating, 0:17:07.160 --> 0:17:09.160 and the bond market is said like, you're gonna start 0:17:09.160 --> 0:17:11.800 cooling off. So I come down on that debate that 0:17:11.960 --> 0:17:15.680 yields probably this low reading because we're maybe maybe somewhat 0:17:15.680 --> 0:17:18.399 of a cooling economy and that keeps you know, the 0:17:18.480 --> 0:17:22.320 balances in the markets pretty solid. Right, we have low volatility, 0:17:22.880 --> 0:17:26.640 stock market is doing fairly well. If anything, the rotation 0:17:26.720 --> 0:17:30.040 back into the tech is also supporting other sectors. Ahead 0:17:30.080 --> 0:17:32.240 of these earnings, I think low yields play into the 0:17:32.320 --> 0:17:34.760 people's mind like, yes, the economy is not in the 0:17:34.800 --> 0:17:38.480 recession of anything, it's just moderating against really strong earnings. 0:17:38.480 --> 0:17:41.000 So I think it's it's good for markets. Ben We're 0:17:41.000 --> 0:17:44.560 gonna have the large finance institutions begin to report earnings 0:17:44.640 --> 0:17:47.880 this week. What are you looking for? Yeah, I think 0:17:47.880 --> 0:17:51.479 that the banks itself have obviously a tremendous base effect 0:17:51.480 --> 0:17:53.600 and they're earning some last year. You know, your your 0:17:53.600 --> 0:17:56.800 colleague and the Martins has these great charts on that, 0:17:57.160 --> 0:17:59.000 and I looked up yesterday. The year and year growth 0:17:59.080 --> 0:18:01.440 rate is unbelievable. Will will see in the next few 0:18:01.520 --> 0:18:04.800 days it could be could these percent of some of 0:18:04.840 --> 0:18:07.520 these cases. What you, of course will look for is 0:18:07.560 --> 0:18:11.399 that what is really the loan demands look like on 0:18:11.440 --> 0:18:14.320 the ground, because now the economy is really attraction and 0:18:14.359 --> 0:18:17.360 we're open. What's really changed there is that the kind 0:18:17.400 --> 0:18:19.439 of the process and what they're planning to do with 0:18:19.440 --> 0:18:23.080 all that excess liquidity they've taken up at the reserve, Yeah, 0:18:23.080 --> 0:18:25.159 the reserves and sell the excess reserves as well as 0:18:25.200 --> 0:18:29.200 the reverse repo facility. And then obviously what they've announced 0:18:29.240 --> 0:18:31.680 after the cess test the buy back plans that do 0:18:32.080 --> 0:18:34.919 metical markets. I think there's expectations you could tell today 0:18:34.960 --> 0:18:37.680 from the price section that the banks will come out 0:18:37.720 --> 0:18:40.600 not only with good earnings, but with intentions to really 0:18:40.640 --> 0:18:43.680 further support the equity valuation. So I think banks will 0:18:43.720 --> 0:18:46.840 do quite well in this period. Are those buy backs 0:18:46.840 --> 0:18:50.280 boosting those valuations that you alluded to within the financial sector? 0:18:50.880 --> 0:18:52.960 Is that broad based as well? Are we expecting to 0:18:53.040 --> 0:18:55.800 hear in these second quarter earnings from CEO is a 0:18:55.840 --> 0:18:59.720 lot of commentary about using this excess cash to buy 0:18:59.720 --> 0:19:03.280 back shares. So the banks have a unique tail in 0:19:03.359 --> 0:19:06.240 that sense, right, because you know, they basically got relief 0:19:06.880 --> 0:19:09.560 from the Federal Reserve to start buying back shares after 0:19:09.680 --> 0:19:12.760 a year of being excluded from that. Whereas the buy 0:19:12.840 --> 0:19:15.960 back index itself, you have an SEP SMP buy back 0:19:16.040 --> 0:19:18.040 in next that's now, by the way, game quite a 0:19:18.040 --> 0:19:20.520 bit of value, but the buy back levels have been low, 0:19:21.119 --> 0:19:24.639 so yes, it could be, you know, depending upon again, 0:19:24.680 --> 0:19:26.960 this is a signal. I think maybe what people try 0:19:27.000 --> 0:19:29.760 to connect with the strong economy and low yields is 0:19:29.800 --> 0:19:32.600 this our earnings telling us that you know, a lot 0:19:32.600 --> 0:19:34.439 of companies sit on a lot of cash, are not 0:19:34.480 --> 0:19:37.640 going to deploy it then investment, but buy back shares 0:19:38.080 --> 0:19:40.080 and then in that sense would not necessary to be 0:19:40.119 --> 0:19:43.080 a good signal. So I think it's really the banks 0:19:43.119 --> 0:19:45.440 that will take the lead there. Because they've been given 0:19:45.480 --> 0:19:48.800 the lead, the other companies will see, right. I think 0:19:48.840 --> 0:19:50.679 it's a there's a lot going on in the economy, 0:19:50.720 --> 0:19:52.919 that's for sure. Hey, Ben, thanks so much for joining us. 0:19:52.920 --> 0:19:55.400 We always appreciate chatting with you as well as your 0:19:55.480 --> 0:19:59.840 research notes. Ben Emmon's Managing director Global macro Strategy at 0:20:00.040 --> 0:20:03.679 Eddy Global Advisors, giving us his thoughts on these markets, 0:20:03.880 --> 0:20:06.920 on space and on some of these bank earning's coming 0:20:06.960 --> 0:20:13.760 up this week. What we've got markets once again, equity 0:20:13.800 --> 0:20:17.119 markets setting all time highs. And that's despite the fact 0:20:17.240 --> 0:20:21.639 that the COVID nineteen UH is still very much with 0:20:21.760 --> 0:20:24.800 us on a global scale. Even within the confines of 0:20:24.800 --> 0:20:27.960 the United States, there's there's large portions of this country 0:20:27.960 --> 0:20:30.840 that are under vaccinated and again as a result, facing 0:20:31.119 --> 0:20:34.119 some challenges in the delta variant. But the markets that 0:20:34.240 --> 0:20:36.480 once was a thing for the markets, it doesn't appear 0:20:36.520 --> 0:20:39.240 like it is as much anymore. Christina Hooper joins us. 0:20:39.240 --> 0:20:43.400 This is chief global market strategist for Investco. UH. Why 0:20:43.400 --> 0:20:45.320 do we like Christina because she's a very nice person 0:20:45.359 --> 0:20:48.520 to have on She's very smart and Investco has one 0:20:48.560 --> 0:20:51.800 point three trillion in assets under management, so she knows 0:20:51.920 --> 0:20:54.360 where the money is going. Christina, thanks so much again 0:20:54.400 --> 0:20:57.480 for joining us here. Again, how do you think about 0:20:57.600 --> 0:20:59.280 I mean, you gots you just take us back you 0:20:59.320 --> 0:21:02.560 know a year plus and the markets was the narrative 0:21:02.640 --> 0:21:07.879 was completely driven by UH you know, virus trends and 0:21:08.080 --> 0:21:11.280 and hospitalization rates. That was really moving the market. And 0:21:11.320 --> 0:21:15.120 now even though we have vaccines, there's still some concerns 0:21:15.119 --> 0:21:19.359 out there there. But the market just doesn't seem to care. Well, 0:21:19.440 --> 0:21:22.320 the market, the stock market doesn't seem to care, right, 0:21:22.359 --> 0:21:25.520 but it seems as though the ten year treasury yield, 0:21:25.560 --> 0:21:29.159 the treasury market does seem to care. Now, I was 0:21:29.760 --> 0:21:33.159 raised in this industry on the notion that quite often 0:21:33.600 --> 0:21:37.600 the ten year treasury yield is a better indicator of 0:21:37.760 --> 0:21:41.520 fear than anything we can find, like the vix in 0:21:41.600 --> 0:21:44.680 the stock market. So this could be a scenario where 0:21:44.720 --> 0:21:50.160 we have stocks um seeing that there is economic growth 0:21:50.320 --> 0:21:54.560 that's quite strong, um, seeing very accommodative monetary policy and 0:21:54.640 --> 0:21:57.680