WEBVTT - Markets, The Fed, Currency, And Healthcare (Podcast) 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 0:00:11.520 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.640 at Bloomberg dot com slash podcast. Daily national average gasoline 0:00:23.640 --> 0:00:27.280 prices according to Triple A five dollars four dollars and 0:00:27.840 --> 0:00:32.360 cents of barrel regular, unleaded regular, agaunt agunt, Yeah, barrel 0:00:32.400 --> 0:00:35.319 a gallant a barrel of gas that would be enough 0:00:35.360 --> 0:00:39.120 to fill now you. I mean, it's just amazing. So 0:00:39.159 --> 0:00:41.199 that kind of brings to me. That's inflation. So but 0:00:41.320 --> 0:00:44.560 everybody says CP I, you know X energy and food. 0:00:44.560 --> 0:00:46.560 I'm like, how can you can't X out energy and 0:00:48.320 --> 0:00:50.760 agree with you? Why would you? Why would you? So 0:00:50.920 --> 0:00:55.040 I get why economists do it in an esoteric, like 0:00:55.120 --> 0:00:59.600 academic way, because they feel that those costs or prices 0:00:59.640 --> 0:01:02.920 are ada tory. But um, there is no way that 0:01:02.960 --> 0:01:07.880 a public facing civil servant should ever use an inflation 0:01:08.200 --> 0:01:11.240 X X everything you need to live. Right, Let's see 0:01:11.240 --> 0:01:14.039 if a portfolio manager does this stuff for living. Did 0:01:14.040 --> 0:01:15.959 they go extra? Did they look at the whole thing? Hey, 0:01:16.000 --> 0:01:19.960 Desch Bonde, Founder and Chief investment officers, Centerstone Investors, Uh, 0:01:20.120 --> 0:01:21.920 thanks so much for joining us. I mean, inflation is 0:01:21.959 --> 0:01:25.600 out there. How does that factor in I eat inflation 0:01:26.040 --> 0:01:29.920 and the FEDS ability to team inflation, how does that 0:01:29.959 --> 0:01:35.720 factor into your investment outlook? Inflation is elevated, remains elevated, 0:01:35.840 --> 0:01:38.800 but um, you know you are going to be hopefully 0:01:39.200 --> 0:01:41.600 like in a month or two, starting to overlap or 0:01:41.920 --> 0:01:46.400 laugh some of the higher or the steeper rate increases 0:01:46.400 --> 0:01:50.400 from last year. So I think inflation should probably um, 0:01:50.640 --> 0:01:53.120 kind of settle down a little bit and allow the 0:01:53.240 --> 0:01:56.000 market and breathing room. But the feed is still way behind. 0:01:56.040 --> 0:01:58.639 Even if inflation settles down to four or five percent, 0:01:58.720 --> 0:02:02.360 you know, set is still uh you know, behind the curve. 0:02:03.320 --> 0:02:05.200 It's just going to be interesting for them to be, 0:02:05.360 --> 0:02:07.880 you know, in a position to have to continuously raise 0:02:07.960 --> 0:02:10.920 interest rates while the economy is slowing down. For us 0:02:11.000 --> 0:02:14.680 as value investors at center Stone, you know, um, the 0:02:14.720 --> 0:02:17.320 fact that money and capital has a cost again is 0:02:18.040 --> 0:02:22.080 that it's it's it's new, and it means that cash 0:02:22.080 --> 0:02:26.280 flow has some value. It's a value as much as 0:02:26.320 --> 0:02:29.880 we look at cash flow as an important determinant of 0:02:30.720 --> 0:02:33.440 or an input into the valuation with business companies that 0:02:33.520 --> 0:02:36.080 generate cash flows, you know, I eat the types of 0:02:36.080 --> 0:02:39.720 things we invest should be you know, uh in favor, 0:02:39.760 --> 0:02:42.280 and they have been for the last many months now, 0:02:43.040 --> 0:02:46.919 So is you know? I just had breakfast over at 0:02:46.960 --> 0:02:51.000 the where's that place? We go? The lows at the 0:02:51.040 --> 0:02:55.720 Regency short was wonderful. Where the entrepreneur who used to 0:02:55.760 --> 0:03:01.640 always start these kind of UM revenue general raiding tech companies, 0:03:01.919 --> 0:03:04.440 you know, and just grow the top line and then 0:03:04.440 --> 0:03:06.720 sell him Now he says, I'm done with that. I'm 0:03:06.760 --> 0:03:09.720 just focusing on cash cows. And we see the same 0:03:09.760 --> 0:03:12.560 thing abbe in e t s, right, You see a 0:03:12.560 --> 0:03:14.679 lot of inflows into these e t f s that 0:03:14.760 --> 0:03:18.520 have big cash flow generating companies and out of like 0:03:18.560 --> 0:03:23.560 the queues. So is this is value finally going to overtake? 0:03:23.560 --> 0:03:25.160 For lack of a better work, because I know people 0:03:25.280 --> 0:03:27.359 quibble about the meaning of value and growth, but are 0:03:27.400 --> 0:03:31.600 you gonna start seeing that rotation UM really stick this year? 0:03:33.160 --> 0:03:35.360 It's um. You know, It's started about a year ago, 0:03:35.720 --> 0:03:38.880 the rotation as it were, and now it's gathering pace. 0:03:38.920 --> 0:03:42.360 I think it's become fairly obvious that the large cap 0:03:42.400 --> 0:03:46.600 growth stocks are or were over over priced UM and 0:03:46.680 --> 0:03:49.560 their overpriced in a in a in a environment where 0:03:49.760 --> 0:03:53.400 growth is slowing. So then you look at your alternatives, 0:03:53.440 --> 0:03:55.040 and you look at companies that have been kind of 0:03:55.040 --> 0:03:57.480 basically ignored for ten years, my own companies that like 0:03:57.520 --> 0:04:00.840 Parago and we Besoft, that are trading at fraction of 0:04:00.880 --> 0:04:05.320 their intrinsic values. Companies that generate cash free cash flow 0:04:05.360 --> 0:04:07.640 in general and distribute that to share orders through rather 0:04:07.720 --> 0:04:11.600 buy backs or dividends, and so so I'm of the 0:04:11.640 --> 0:04:15.160 mind that that turn already happened. It's gathering pace. Whether 0:04:15.240 --> 0:04:17.039 it's you know, for the one year, I don't know 0:04:17.040 --> 0:04:18.679 if I can make a prediction for like just another 0:04:18.839 --> 0:04:21.000 six seven months, but I'd say for the next three 0:04:21.080 --> 0:04:24.440 or five years that the winds are in the sales 0:04:24.480 --> 0:04:29.240 of value oriented approaches and I'll buy. I mean, you know, 0:04:29.800 --> 0:04:32.640 value investing is not for the faint of heart. What 0:04:32.760 --> 0:04:37.240 led you into the value camp, Well, it's I think 0:04:37.279 --> 0:04:40.560 it's a it's a personality thing, like you know, for 0:04:42.240 --> 0:04:47.120 it's a point of view where a business has an 0:04:47.120 --> 0:04:52.679 intrinsic value UM it's determined by cash flows and tangible things, 0:04:53.520 --> 0:04:56.320 and to me, that's just real um. As opposed to 0:04:56.360 --> 0:04:59.680 me trying to understand what is the potential growth of 0:04:59.720 --> 0:05:02.240 some company that doesn't have any revenues ten years from now, 0:05:02.279 --> 0:05:04.920 what's it going to look like? That? To me, there 0:05:04.960 --> 0:05:09.360 are so many paths, you know, so many uh undetermined 0:05:09.800 --> 0:05:13.279 variables and unknowable variables that that can throw you off 0:05:13.279 --> 0:05:16.200 the path, as opposed to the burden hand of a 0:05:16.279 --> 0:05:18.880 value company, where you know, I don't have to make 0:05:18.920 --> 0:05:21.440 so many guesses about things. To me, it's just a 0:05:21.560 --> 0:05:24.000 it's just a it's just a matter of understanding or 0:05:24.040 --> 0:05:29.000 agreeing that the future is uncertain. If the future is uncertain, um, 0:05:29.040 --> 0:05:32.200 you know, the most value I can add and keep 0:05:32.200 --> 0:05:33.840 on using that word, but the most value I can 0:05:33.839 --> 0:05:37.279 add to our shareholders is to invest in companies where 0:05:37.960 --> 0:05:41.760 uh there's some predictability to the outcome. So I love 0:05:41.800 --> 0:05:43.720 that kind of investing. It's always been what I've been 0:05:43.720 --> 0:05:45.560 doing for thirty years. I feel like it is. I 0:05:45.640 --> 0:05:49.920 feel like I would uh feel safer investing in value 0:05:49.960 --> 0:05:52.719 than growth. You would you feel safer, But it's just 0:05:53.440 --> 0:05:55.760 over my thirty plus odd your career it's been growth. 0:05:55.880 --> 0:05:57.320 There's been a lot of head things. That's why I 0:05:57.360 --> 0:05:59.840 was asking if it would stick. But they also came 0:06:00.240 --> 0:06:04.360 up under some of the most legendary names in value investors, 0:06:04.640 --> 0:06:08.280 John Marie Viard and Charles Duvot. Maybe they teach it 0:06:08.360 --> 0:06:11.239 at the University of Louisville, I'm not sure, but anyway, 0:06:11.760 --> 0:06:15.000 thank you so much for joining us. Always good stuff there, Uh, 0:06:15.080 --> 0:06:23.520 founder and Chief investment officer center Stone Investors. I want 0:06:23.520 --> 0:06:26.120 to bring in Danielle di Martino Booth. She is a big, 0:06:26.160 --> 0:06:29.600 big star here at Bloomberg Markets. We love having her 0:06:29.640 --> 0:06:32.320 on to give us thoughts on these markets and on 0:06:32.560 --> 0:06:35.200 the Federal Reserve. She's at CEO and chief strategist for 0:06:35.279 --> 0:06:40.640 Quill Intelligence, former advisor at the Federal Reserve Bank of Dallas. So, Danielle, 0:06:40.640 --> 0:06:42.400 thanks so much for taking the time again to chat 0:06:42.440 --> 0:06:44.839 with us here. We have a FED meeting next week 0:06:45.240 --> 0:06:49.920 which we expect. Well, um, I think that we should 0:06:49.920 --> 0:06:52.960 expect given you know, I called him the Holy Trinity 0:06:53.080 --> 0:06:56.920 John Williams, Lele brainerd Jerome Powell. You know that that's 0:06:56.920 --> 0:06:59.839 the power seat that by share, they want to see 0:07:00.000 --> 0:07:02.240 share of the FEMC vice share the photo reserve board. 0:07:02.680 --> 0:07:05.440 They've maintained their hawk is stand. I think they've got 0:07:05.480 --> 0:07:10.280 their eye on September. Ira Jersey give a really runoff 0:07:10.360 --> 0:07:12.600 was just a few minutes ago. I think they have 0:07:12.680 --> 0:07:16.320 their eye on getting to that third fifty basis point 0:07:16.400 --> 0:07:19.680 rate hike in front of us in September and achieving 0:07:20.080 --> 0:07:23.960 that almost one billion dollar a month run runoff rate 0:07:24.280 --> 0:07:26.240 for the balance sheet. I think they're going to try 0:07:26.280 --> 0:07:30.800 and communicate that in this coming week's meeting. I didn't 0:07:30.800 --> 0:07:33.960 get a chance to ask iro A Jersey UM earlier 0:07:34.080 --> 0:07:38.760 about the auction this afternoon. Normally I don't care about auctions, UM, 0:07:38.800 --> 0:07:40.880 I probably care less than anyone else in the building, 0:07:41.120 --> 0:07:44.920 But apparently like this is a big deal today. I 0:07:44.920 --> 0:07:47.240 think it's gonna be a forty four billion dollar three 0:07:47.320 --> 0:07:51.119 year sale at one o'clock, and it'll be the first 0:07:51.120 --> 0:07:53.960 time that the FED doesn't play a big part. Right, 0:07:55.400 --> 0:07:58.200 the Fed's not playing a big part. And this will 0:07:58.240 --> 0:08:04.120 indeed be a litmus tests for what the private investor community, 0:08:04.240 --> 0:08:08.840 what their appetite is. And you know, look at these levels. 0:08:09.240 --> 0:08:13.200 I think that a lot of insurance companies, public pensions. Initially, 0:08:13.240 --> 0:08:15.360 there's gonna be this massive amount of relief that they 0:08:15.400 --> 0:08:17.560 can come in and get short paper at high heel. 0:08:18.400 --> 0:08:21.280 And so I don't think that there's We're gonna watch 0:08:21.280 --> 0:08:24.400 it closely, don't get me wrong, UM, but to irish points. 0:08:25.080 --> 0:08:27.840 Once we get further down the line and get through 0:08:28.040 --> 0:08:31.920 natural buyers, people who are desperate for yield. Once they 0:08:32.000 --> 0:08:35.360 get through that population, I think them we're gonna have 0:08:35.440 --> 0:08:39.080 to be watching out for for what's to come in 0:08:39.200 --> 0:08:43.679 terms of do we see the potential for higher rates 0:08:43.720 --> 0:08:46.040 because we have to pull buyers out of the woodwork 0:08:47.080 --> 0:08:52.160 Danielle over the next several months. What is the what 0:08:52.280 --> 0:08:55.240 type of mistake could the Federal Reserve make that maybe 0:08:55.280 --> 0:08:57.920 you're on the lookout for, whether it be maybe too 0:08:57.920 --> 0:09:01.120 aggressive or maybe not aggressive enough. What's the mistake that 0:09:01.320 --> 0:09:05.400 you're maybe have on the on your radar. So I'm 0:09:05.400 --> 0:09:07.840 going to borrow the wisdom of Tom Honig, who I 0:09:07.880 --> 0:09:09.840 have tremendous respect for. He was the head of the St. 0:09:09.880 --> 0:09:12.720 Louis Fed for a long time, UM, and he said 0:09:12.760 --> 0:09:15.840 that one of the mistakes that was made, uh was 0:09:15.960 --> 0:09:21.720 that when the Fed was was was changing its policy stance, 0:09:22.200 --> 0:09:25.559 that they didn't stop and pause. And it's not for 0:09:25.920 --> 0:09:28.480 I'm not necessarily advocating for the FED to stop or 0:09:28.520 --> 0:09:32.000 pause in in September and not and and just stop 0:09:32.040 --> 0:09:35.440 and pause for the entire cycle. But monetary policy does 0:09:35.520 --> 0:09:38.839 act with a lag. What we learned from the the 0:09:38.920 --> 0:09:43.120 national Sessions of Credit Managers was that both UM both 0:09:43.200 --> 0:09:47.440 delivery excuse me, both collection times for services and manufacturing 0:09:47.440 --> 0:09:50.960 dipped into negative territory in May. That's the entire economy. 0:09:51.360 --> 0:09:54.080 Last time we had that was in December two thousand seven, 0:09:54.440 --> 0:09:58.320 when the economy entered the Great Recession. So my concern 0:09:58.400 --> 0:10:00.079 is that we were entering recession and that it that 0:10:00.160 --> 0:10:03.480 that pushes too far, that this could be not a quick, 0:10:03.559 --> 0:10:07.480 shallow recession that a more prolonged and deep one. But 0:10:07.600 --> 0:10:10.480 you do think we are going to go into a recession, 0:10:10.559 --> 0:10:15.120 right because we've had a lot of big economists, big 0:10:15.200 --> 0:10:19.400 names UM like I keep referencing Ed Hyman pushed back 0:10:19.440 --> 0:10:23.080 against UM that that idea and say at least it's 0:10:23.080 --> 0:10:27.680 not their base case for this year or UM. You 0:10:27.679 --> 0:10:30.080 know Ed and I go back a long time. We're 0:10:30.120 --> 0:10:34.319 both University of Texas, you know, crazy crazy UM freaks 0:10:34.400 --> 0:10:38.560 and I respect at but everything that we're seeing, whether 0:10:38.679 --> 0:10:41.840 it's in in car sales. I spoke to somebody who 0:10:41.960 --> 0:10:45.560 is it when I set X is biggest distribution centers 0:10:45.559 --> 0:10:48.200 in Portland, Oregon. He said he's never seen a slowdown 0:10:48.280 --> 0:10:51.280 that like this in twenty five years, just in terms 0:10:51.320 --> 0:10:53.719 of this year volume. And that's what we're hearing. We're 0:10:53.760 --> 0:10:56.000 hearing from Amazon, we're hearing from targets they're sitting on 0:10:56.040 --> 0:10:59.800 in the demand has been destroyed and it's going to 0:10:59.840 --> 0:11:01.720 come through with the lack. I wouldn't be surprised to 0:11:01.720 --> 0:11:05.160 see another big number with consumer credit out at this afternoon, 0:11:05.200 --> 0:11:07.600 late PCE afternoon, because Americans are putting more and more 0:11:07.640 --> 0:11:10.960 on their credit cards to sustain their consumption patterns. But 0:11:11.080 --> 0:11:14.000 that's not that's not you can't prolong that with Jan 0:11:14.080 --> 0:11:18.240 Hatzias at Goldman Sachs recently warned about so are are 0:11:18.280 --> 0:11:21.800 we in stagflation now? Are we in or are we 0:11:21.840 --> 0:11:23.720 even worse in a recession? Now? Do you think? Do 0:11:23.760 --> 0:11:28.240 you think inflation is peaked? Danielle. I do think that, 0:11:28.440 --> 0:11:32.600 especially on the discretionary side, that inflation is peaked. J Powell, 0:11:33.320 --> 0:11:36.080 he's trying to break the back of housing speculation, and 0:11:36.240 --> 0:11:40.000 that's where the policy mistake could come because that that 0:11:40.400 --> 0:11:43.120 input into the CPI is higher than it was at 0:11:43.120 --> 0:11:45.440 the than it was at the peak of the housing 0:11:45.480 --> 0:11:47.679 bubble right now, and we know that it's going to 0:11:47.720 --> 0:11:51.600 continue to filter through a very high level CPI. Even 0:11:51.640 --> 0:11:53.880 if we see discretionary inflation come off its tides, which 0:11:53.920 --> 0:11:56.439 we know is happening, there are other there are other 0:11:56.480 --> 0:12:00.719 very sticky forms, and going into a midstrom election, politicians 0:12:00.760 --> 0:12:03.080 are going to be focused on headline CPI. They're not 0:12:03.120 --> 0:12:06.080 going to give the FED the luxury of focusing on 0:12:06.120 --> 0:12:08.959 the core and and food and energy right now are 0:12:09.000 --> 0:12:12.520 not in the under the Fed's control. So yes, discretionary 0:12:12.520 --> 0:12:15.520 inflations off its highs, but there are other persistent, sticky 0:12:15.559 --> 0:12:18.440 forms that continue to input to feed into the cp 0:12:18.559 --> 0:12:20.400 I inputs at the same time that I think it's 0:12:20.640 --> 0:12:23.800 highly feasible that we're already in recession right now. You've 0:12:23.840 --> 0:12:27.480 got GDP estimates somewh around the two mark for the 0:12:27.520 --> 0:12:30.280 current quarter ending June. By the way, I have a 0:12:30.320 --> 0:12:32.520 listener writing in asking if you think we've seen the 0:12:32.600 --> 0:12:36.200 highs in rates or can rates go higher because the 0:12:36.240 --> 0:12:40.400 FED has difficulty controlling inflation. This is something that Ira 0:12:40.559 --> 0:12:43.880 Jersey also is saying. He's at least close to on 0:12:43.920 --> 0:12:47.320 the long end of highs and rates. And I would 0:12:47.360 --> 0:12:49.480 agree with Ira because there's only so much you can 0:12:49.520 --> 0:12:52.679 do to combat a turn in the labor force, and 0:12:52.720 --> 0:12:56.760 that is that that's your biggest signpost um for your 0:12:56.800 --> 0:13:00.640 long rates. We've we've seen two consecutive months of negative 0:13:00.640 --> 0:13:03.199 net revisions. We've seen two consecutive months of part time 0:13:03.480 --> 0:13:06.199 working part time for economic reason to tick up. You've 0:13:06.200 --> 0:13:09.560 seen your underemployment rate pick up for two months. We're 0:13:09.600 --> 0:13:12.360 seeing signs of turning in the labor force. Once the 0:13:12.440 --> 0:13:15.400 labor force turns your past tense looking into the rear 0:13:15.480 --> 0:13:19.400 view mirror in recession, that signals your peak in long rates. 0:13:20.400 --> 0:13:23.320 All right. Every time we talked to Danielle and you 0:13:23.360 --> 0:13:26.320 get Danielle and Ira on the same day, Well, I 0:13:26.360 --> 0:13:28.880 was just thinking that is awesome. Let's get Danielle on 0:13:29.040 --> 0:13:32.000 with Ed with Ed Hyman. Sure, get the two of them, 0:13:32.000 --> 0:13:34.560 and next time you're in New York, Danielle, we're gonna 0:13:34.559 --> 0:13:37.080 set this all up. I'm gonna call Ed. I love it, 0:13:37.320 --> 0:13:41.400 and that would be fantastic, all right, Danielle di Martino Booth. 0:13:41.559 --> 0:13:43.480 We can corner in our wardrobes. Will both wear burnt 0:13:43.480 --> 0:13:48.319 orange fort Yes, yes, perfect. Perfect. Daniel D. Martino booth 0:13:48.600 --> 0:13:53.559 uh U t Alam also the CEO of Quill Intelligence 0:13:53.760 --> 0:13:56.280 and highly respect. A lot of our listeners love to 0:13:56.280 --> 0:14:00.439 hear her give talks. Also, great social game. Her twitter 0:14:00.480 --> 0:14:04.000 feed is really informative. I don't really tweet much. She 0:14:04.120 --> 0:14:06.560 just read her tweets and get smart. I'll check it out. 0:14:06.600 --> 0:14:08.720 I'll check it out, Okay, Danielle. Great to have you on. 0:14:08.760 --> 0:14:12.960 Thanks so much for joining us. Um, well, usually Paul, 0:14:13.000 --> 0:14:14.599 you do this part. What do I do now? To 0:14:14.679 --> 0:14:16.280 just kind of say, hey, we'll talk in a few minutes. 0:14:16.760 --> 0:14:23.320 This is Bloomberg right now. We want to bring in something. 0:14:23.680 --> 0:14:25.880 You know, a guy who's traded this stuff all over 0:14:25.880 --> 0:14:27.920 the place. Now, I don't think we're ever going to 0:14:27.960 --> 0:14:30.040 see him in the offices here. He is a work 0:14:30.120 --> 0:14:33.440 from home pro and that is Vince Signaola global macro 0:14:33.480 --> 0:14:36.760 strategist for Bloomberg News. He can do this stuff from anywhere. 0:14:36.800 --> 0:14:39.440 So Vince, thanks so much for joining us here. Curtious 0:14:39.480 --> 0:14:42.480 just kind of highlighting currencies out there. Is there a 0:14:42.520 --> 0:14:46.520 bear market case for the U S Dollar? Not yet? 0:14:46.760 --> 0:14:49.480 Not yet, And we won't talk about my trading options 0:14:49.480 --> 0:14:54.280 from the beaches a cup or something. We go, um, 0:14:54.320 --> 0:14:57.760 not not yet. I mean, there's definitely an argument upcoming, 0:14:57.840 --> 0:15:00.840 if you will, but not just quite yet situation. One 0:15:00.840 --> 0:15:02.440 of the things I point out to you is there's 0:15:02.440 --> 0:15:05.480 an amazing inverse correlation right now between the dollar and equies. 0:15:05.800 --> 0:15:07.720 And we saw it this morning. The dollar rolled over 0:15:07.800 --> 0:15:10.440 and we saw a bid and equities once again, typically 0:15:10.480 --> 0:15:13.360 the dollars the tail where you know, and not wagging 0:15:13.360 --> 0:15:15.600 the dog. But for the last two days, the dollars 0:15:15.640 --> 0:15:19.200 actually been leading the equity markets. And one of the 0:15:19.240 --> 0:15:21.320 reasons is, without getting too deep in the weeds of 0:15:21.400 --> 0:15:25.680 this is what what's been driving inflation is commodities. It's 0:15:25.680 --> 0:15:27.640 not a demand for money, it's not a supply for 0:15:27.760 --> 0:15:30.680 money per se um. You know, the Fed's monetary polly 0:15:30.720 --> 0:15:33.360 has policy hasn't changed for fifteen years. We haven't really 0:15:33.400 --> 0:15:36.360 seen any inflation for fifteen years. Now, all of a sun, 0:15:36.360 --> 0:15:39.040 we're seeing it because of the commodity pricess. That's something 0:15:39.080 --> 0:15:42.320 that's legitimately out of control with the Fed. And the 0:15:42.400 --> 0:15:45.200 more they take money out of the system, and the 0:15:45.240 --> 0:15:47.880 more they do this reduction of the balance sheet and 0:15:48.000 --> 0:15:51.560 higher interest rates, the greater divergence between the demand and 0:15:51.760 --> 0:15:55.080 supply for money, and as that diverges, you see a 0:15:55.160 --> 0:15:57.400 greater demand for the dollar. And so I think in 0:15:57.440 --> 0:16:00.360 the near term, as pretty was mentioning, I think we're 0:16:00.360 --> 0:16:02.080 going to see a little bit more demands for the 0:16:02.120 --> 0:16:05.120 dollar than it's going to be a little choppy. Obviously, 0:16:05.200 --> 0:16:09.280 what um what Powell says that an espressor after the 0:16:10.000 --> 0:16:14.040 MC as everyone expects, hikes next Wednesday. UM, my hope 0:16:14.080 --> 0:16:18.840 is exactly opposite of what. So, I'm sorry to interrupt you. 0:16:18.880 --> 0:16:20.640 I'm so god it's got to be. It's it's a 0:16:20.680 --> 0:16:23.360 really good moment when your teacher, your former mentor and 0:16:23.440 --> 0:16:28.120 teacher says the student was right. It Vince, I got 0:16:28.600 --> 0:16:31.480 she's been making your argument over the last several days, 0:16:31.680 --> 0:16:34.240 and no one believes me that like this doesn't matter. 0:16:34.360 --> 0:16:37.040 It's flat and unchanged. You're totally right. But let me 0:16:37.040 --> 0:16:39.280 go cross acid here because if you actually and this 0:16:39.320 --> 0:16:40.680 is what's so interesting to me, A lot of the 0:16:40.720 --> 0:16:43.720 correlations that we saw two years ago, which, by the way, 0:16:43.840 --> 0:16:46.720 Vince also taught me correlations all my rants are really 0:16:47.080 --> 0:16:49.960 Vince's fault. Um, But if you look at what kind 0:16:49.960 --> 0:16:53.760 of happened with oil prices, hired stocks, hire all these 0:16:53.880 --> 0:16:56.320 risk assets that are traditionally supposed to be risk assets, 0:16:56.360 --> 0:16:59.000 they're moving together again in a way that they haven't. 0:16:59.320 --> 0:17:02.280 I would are you year to date, vince your take 0:17:02.400 --> 0:17:06.520 on that? Well? Um, yes, I mean you know, all 0:17:06.560 --> 0:17:10.639 correl all correlations equal one at some point or another 0:17:11.240 --> 0:17:14.000 regarding UL price though, And if you're an FX guy 0:17:14.000 --> 0:17:15.480 and you're looking how to play this, you know you 0:17:15.520 --> 0:17:18.920 were mentioned was he again earlier? CAD yen is an 0:17:18.920 --> 0:17:21.600 exceptional thing to look at. CAD next border of oil? 0:17:22.040 --> 0:17:26.800 U what am I doing now? Canadian dollar to the end, 0:17:28.160 --> 0:17:31.400 so you can bike if you think oil. Okay, that's 0:17:31.440 --> 0:17:33.800 what I get all right, I'm I'm speaking for every 0:17:33.840 --> 0:17:36.280 single one of our listeners out there. True, Okay, I 0:17:36.320 --> 0:17:42.360 got it? Continue an sorry, so no. In a commodity play, um, 0:17:43.040 --> 0:17:45.320 you have to like Canada for a variety of reasons, 0:17:45.359 --> 0:17:50.040 major export or commodities uh oil as well. Um. And 0:17:50.240 --> 0:17:52.840 if if you think you know, you can watch the 0:17:52.880 --> 0:17:56.880 Bloomberg Commodity Index. I think we hit historical hives yesterday. 0:17:57.000 --> 0:18:00.320 If you if you expect that to continue, I I 0:18:00.320 --> 0:18:03.840 would look for the oil exporters to continue to do 0:18:03.920 --> 0:18:07.160 better currency wise, kind of way. By the way, Vince, 0:18:07.160 --> 0:18:11.720 do we almost unrelated? Do we import deflation when the 0:18:11.960 --> 0:18:14.159 end goes to one thirty two? I mean, I'm just 0:18:14.200 --> 0:18:19.520 thinking about Ford and GM and Chrysler buying parts from Japan. 0:18:19.600 --> 0:18:22.800 They can get a lot more for a lot less now, Yeah, 0:18:22.880 --> 0:18:25.639 absolutely if that's where they're getting in from the norward 0:18:25.720 --> 0:18:29.040 China these days. But yes, absolutely correct. Um, it's it's 0:18:29.040 --> 0:18:32.080 always but the flip side of the coin fluid automakers 0:18:32.400 --> 0:18:35.920 where they always pushed back is when the end weekends. Uh, 0:18:35.960 --> 0:18:39.880 the Japanese automakers have a huge advantage over US automake 0:18:39.960 --> 0:18:43.119 good point. It's a double edged sword, really, all right, Vince, 0:18:43.119 --> 0:18:44.800 good stuff. Always love having you. We're gonna have you 0:18:44.800 --> 0:18:46.680 every couple of weeks now, so you're you're locked in. 0:18:46.760 --> 0:18:51.600 Vince Cigarella, Global macro strategists and also cretic UH Markets corresponded, 0:18:51.640 --> 0:18:53.480 joining us talking a little bit of the currency set. 0:18:56.960 --> 0:18:59.960 June is Pride month and a month when we felt 0:19:00.000 --> 0:19:03.400 you selling equality issues here at Bloomberg. Today we bring 0:19:03.440 --> 0:19:07.679 in Oregon CEO Kevin Ali to talk about women's healthcare 0:19:08.040 --> 0:19:11.600 and experiending healthcare for all. Kevin, thanks so much for 0:19:11.640 --> 0:19:13.520 joining us. Here. You know, I read a recent stat 0:19:13.560 --> 0:19:16.600 that only four percent of global funding for research and 0:19:16.640 --> 0:19:20.080 development and healthcare services go towards women's health. That really 0:19:20.119 --> 0:19:21.879 shocked me. Talk to me about what you guys that 0:19:22.040 --> 0:19:25.919 organon are doing here to address the women's healthcare market 0:19:28.160 --> 0:19:30.560 with your Paul and I gotta say that, you know, 0:19:30.600 --> 0:19:33.359 we're really excited because last week we celebrated our one 0:19:33.400 --> 0:19:36.800 year anniversary since the bell ringing ceremony that we had 0:19:36.840 --> 0:19:39.320 the New York Talk Exchange, and we need to do 0:19:39.480 --> 0:19:42.200 really three things to you know, four investors to really 0:19:42.240 --> 0:19:45.359 believe in organize a company. First and foremost, we said 0:19:45.440 --> 0:19:49.560 we would stabilize our established brands business, and we've done that. 0:19:49.640 --> 0:19:54.080 We said we would drive our biosimilars business by double digits. 0:19:54.080 --> 0:19:56.360 We've done that. And now turning to your point, which 0:19:56.359 --> 0:19:58.800 is women's health, we said basically that we're going to 0:19:58.880 --> 0:20:01.359 be an active player in business development because there are 0:20:01.359 --> 0:20:03.639 a number of assets out there looking for a home 0:20:04.040 --> 0:20:07.639 at a reasonable valuation. We've got great cash flow, so 0:20:07.680 --> 0:20:10.159 we've been able to do five business deals over the 0:20:10.280 --> 0:20:13.680 last year to kind of buttress our Our business are 0:20:13.720 --> 0:20:17.520 thriving reproductive health business. So we've gone from two areas 0:20:17.520 --> 0:20:21.080 of focus in fertility and contraception now to seven areas 0:20:21.080 --> 0:20:24.560 of focus, uh, literally in one year. So we're very pleased. 0:20:24.920 --> 0:20:26.560 You know, R and D is starting to emerge in 0:20:26.600 --> 0:20:28.960 the space, and we're a great player to be a 0:20:29.000 --> 0:20:31.560 global leader in the women's health space. There's no other 0:20:31.640 --> 0:20:35.119 large pharma company quite like us in terms of our focus, 0:20:35.119 --> 0:20:37.640 so we're very happy with our potential future options here. 0:20:37.640 --> 0:20:39.879 By the way, Kevin, I know, well a lot of times, 0:20:39.920 --> 0:20:44.560 at least executives don't like to talk politics, and but 0:20:45.160 --> 0:20:48.000 we can't have a conversation about women's health and equality 0:20:48.040 --> 0:20:55.040 without talking about, um uh, the possibility of ROW being overturned. 0:20:55.640 --> 0:21:00.199 How do you react? Um? How have your employees reacted 0:21:00.359 --> 0:21:03.200 to this what what appears to be, at least from 0:21:03.240 --> 0:21:09.200 one point of view, a huge setback in women's rights. Yeah, look, 0:21:09.280 --> 0:21:12.000 you know, I'll tell you, Paul, I think everyone is 0:21:12.000 --> 0:21:15.120 clearly paying attention. As you said, it's still not determined 0:21:15.160 --> 0:21:19.320 fully yet obviously soon we'll find out soon enough. But 0:21:19.800 --> 0:21:22.320 here's the something focus I mean, really, I mean, you know, 0:21:22.359 --> 0:21:25.439 the employees we call founders of this company, all nearly 0:21:25.440 --> 0:21:28.639 ten thousand strong, are focused on our vision of a 0:21:28.720 --> 0:21:31.959 better and healthier every day for every woman. Part of 0:21:32.000 --> 0:21:35.120 that focus is really on trying to solve the issue 0:21:35.119 --> 0:21:39.200 of unintended pregnancies, of which more than fifty of all 0:21:39.240 --> 0:21:41.520 pregnancies in the United States are and intended the same 0:21:41.760 --> 0:21:46.040 x x us has been that way for nearly a decade, uh, 0:21:46.080 --> 0:21:48.439 you know, And so we're starting to invest in things like, 0:21:48.480 --> 0:21:51.840 for example, education and awareness so that she can have 0:21:51.960 --> 0:21:55.080 better discussions with health with her health care provider, and 0:21:55.240 --> 0:21:58.679 offering up um really unique innovative ideas like next one 0:21:58.800 --> 0:22:01.520 on which is in curitible rod that we have long 0:22:01.560 --> 0:22:06.200 acting reversible contraceptive that the potentially essentially says the woman 0:22:06.280 --> 0:22:09.520 having to think about unintended pregnancy for three years with 0:22:09.600 --> 0:22:13.400 a ninety nine point eight percent effectiveness level. So we're 0:22:13.400 --> 0:22:15.760 focused on our end of the spectrum, which is really 0:22:15.760 --> 0:22:19.879 trying to bring innovative and unique solutions to solve some 0:22:19.960 --> 0:22:24.320 of these significant unmend needs like unintended pregnancies. All right, So, Kevin, 0:22:25.119 --> 0:22:27.359 you spun out from merk last year right in the 0:22:27.400 --> 0:22:30.560 midst of a global pandemic. Talk to us about what 0:22:30.600 --> 0:22:34.399