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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day, we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. I saw a pretty

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Speaker 1: cool chart this morning on the Daybreak newsletter. Do you

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Speaker 1: read that every day? Paul? The Daybreak News like yeah. Um.

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Speaker 1: They feature different charts in macro views, and one that

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Speaker 1: I saw was going back twenty years. Whenever we go

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Speaker 1: into a rate rising cycle, you start to see the

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Speaker 1: yield curve go down or tighten so um for example,

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Speaker 1: the spreads between spread between twos and the tens just

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Speaker 1: starts to tighten up and maybe even at some points invert.

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Speaker 1: Every single rate increase cycle that we've had over the

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Speaker 1: last twenty years. Now, that maybe is bad news for

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Speaker 1: the economy because of what it signals, and because of

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Speaker 1: the fact that we're already looking at a yield curve

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Speaker 1: that's going down as the fed um is expected to raise.

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Speaker 1: For some people saying now five times this year what

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Speaker 1: does that mean. Let's go to Jay Hatfield right now.

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Speaker 1: He's the CEO uh Infrastructure Capital Advisors. They have a

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Speaker 1: number of funds under management, but he has a long

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Speaker 1: career on the street as well as uh NBAS from

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Speaker 1: Wharton and U. C. Davis. He worked at S A. C. Capital.

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Speaker 1: He was a principal and investmentking at Morgan Stanley. Incredible really,

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Speaker 1: c v J. So I appreciate you spending some time

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Speaker 1: with us. What do you think about the economy now?

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Speaker 1: It looks like, uh, we're trending down in some ways

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Speaker 1: at a time when the FED is about to tighten. Well,

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Speaker 1: first of all, Matta and Paul, thanks for having me

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Speaker 1: on your show again. We think the critical judgment is

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Speaker 1: whether the FED is going to overtighten. The data is

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Speaker 1: that in the nineteen I'm sorry, of the nineteen tightenings,

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Speaker 1: eleven have ended up in recessions and eight in a

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Speaker 1: mid cycle soft landing. So that's the critical issue. And

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Speaker 1: I think the minutes really disturbed the market because there

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Speaker 1: was a lot of discussion about quantitative tightening, which is

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Speaker 1: a disaster. But we're more optimistic to the market because

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Speaker 1: we don't think they've focused on the fact that Biden

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Speaker 1: will have that pointed five out of the seven f

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Speaker 1: o MC members soon when they get approved. But that

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Speaker 1: doesn't mean that the market won't weaken you know, obviously

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Speaker 1: weakened from here is a critical area, and I would

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Speaker 1: note as well. Alright, so, Jay, I guess the issue

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Speaker 1: for this Federal Reserve. It seems to me, and I'm

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Speaker 1: just a novice here, that the signaling the communications been

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Speaker 1: very good, Yet the market, as you noted, has maybe

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Speaker 1: even thought about the Fed might go even further than

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Speaker 1: what they've signaled. How do you think this Federal Reserve

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Speaker 1: will proceed from here? Well, I think that what you

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Speaker 1: could see, which would be the bowl case, is that

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Speaker 1: they go and correct a little bit of this what

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Speaker 1: we believe is a misconception about the minutes. Keep in

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Speaker 1: mind when the minutes say certain participants, but we don't

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Speaker 1: know who those people are. They could just be the

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Speaker 1: regional FED governors which tend to be more hawkish. So

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Speaker 1: there could be a correction in the communication. Because we

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Speaker 1: do believe, like you're one of your prior guests, that

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Speaker 1: financial conditions have tightened. Mortgage rates are at basis points

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Speaker 1: higher than they were prior to the capitulation on transitory

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Speaker 1: so it's possible that Powell tries to soften the message

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Speaker 1: and maybe take quantitative tightening off the table, which is

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Speaker 1: horrendous for the market because liquidity is what really drives

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Speaker 1: the market, not interest rates. So if there's more reduction

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Speaker 1: in liquidity, then you know, we think there could be

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Speaker 1: a crash and Bitcoin and some of these other momentum

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Speaker 1: type investments. That's a great point. I was just reading

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Speaker 1: a couple of days ago Muhammad al Arian's column where

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Speaker 1: he asked, um, when FED tightening is going to hit

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Speaker 1: financial conditions or why it isn't now, And one of

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Speaker 1: the reasons that he stated is it's really about the

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Speaker 1: liquidity and not about the flow. Um, what what do

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Speaker 1: you think about the levels here you mentioned and the

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Speaker 1: market just started. I guess it's been kind of in

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Speaker 1: a downward trend today, um since the open, and then

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Speaker 1: it bounced off of basically forty nine and is now

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Speaker 1: coming back up pretty dramatically. Well. Yes, the other easy

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Speaker 1: rule is to be long during earning season, at least

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Speaker 1: when the economy is strong. So typically we've had a

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Speaker 1: few misses, obviously Netflix being the poster child, but normally

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Speaker 1: earnings are good and the companies retained their their best

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Speaker 1: releases for actual earnings call, so they're they're good news.

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Speaker 1: So usually it pays to be long. Journey are in season,

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Speaker 1: so it makes sense it's bouncing. But if we violate

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Speaker 1: the two hunter day, then usually there's a lot of

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Speaker 1: hedging activity that occurs, so it's a risky level in

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Speaker 1: the market. What's your favorite sector here that you and

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Speaker 1: your team are working on right now. We really prefer

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Speaker 1: um are focused on preferred stocks. We think that not

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Speaker 1: just value, Like there's been some discussions that even you know,

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Speaker 1: value stocks are revived, so we always if we're thinking

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Speaker 1: about value, we always want to get paid to weight

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Speaker 1: and have income. So preferred stocks were not that bullish

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Speaker 1: about the market this year. They have high dividend yields

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Speaker 1: and low volatility like today most preferred funds are sort

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Speaker 1: of flatished down like twenty basis points, so you get

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Speaker 1: high income and low volatility. But we definitely think this

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Speaker 1: year is going to be adult swim. So if you

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Speaker 1: buy stocks, don't just buy value, but also by income,

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Speaker 1: so you get paid to wait, so even if the

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Speaker 1: market is down, your income is still stable. All right, Jay,

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Speaker 1: Thanks so much for joining us. Really appreciate getting your thoughts.

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Speaker 1: They're like getting paid to weight. That's a good feeling.

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Speaker 1: I think Jay Halfield, CEO, founder and portfolio manager of

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Speaker 1: Infrastructure Capital Advisors here, all right, let's talk energy. I

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Speaker 1: got w T I crew eighty five bucks of barrel.

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Speaker 1: Where is this thing going? I mean, if I'm gonna

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Speaker 1: fill up mats, you know, four D f one fifty,

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Speaker 1: it's going to cost a pretty penny. Regina Mayor, she

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Speaker 1: is a principal Global sector head for Energy for KPMG,

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Speaker 1: and she was a former officer in the U. S.

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Speaker 1: Army Reserve, which is very cool. We appreciator service their Regina.

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Speaker 1: Where is oil going here? I mean, I've got some

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Speaker 1: demand picking up. I have OPEC saying pretty disciplined. Is

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Speaker 1: this going higher? Well, it's really all over the map,

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Speaker 1: and the predictions are starting to indicate that it will

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Speaker 1: go higher. We think triple digit prices are in range

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Speaker 1: because we see more upward price pressures versus the onward

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Speaker 1: price pressures. UH supply is constrained. I think OPEC plus

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Speaker 1: is not necessarily being disciplined. I really think they're at

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Speaker 1: near or at capacity that we don't have a global

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Speaker 1: safety valve. Yeah, yeah, I think that's partly why they're

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Speaker 1: appearing to be so disciplined. Is the word on the

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Speaker 1: street is they can't make any morggling. It's it's by

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Speaker 1: the way OPEC go on the terminal, you know, of course,

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Speaker 1: a great function and you can see that what Regina

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Speaker 1: is saying is spot on correct. I mean there are

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Speaker 1: very few members of OPEC that have any spare capacity.

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Speaker 1: There's a graph in the lower left corner is very

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Speaker 1: cool that shows you, UM, So it's interesting to me

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Speaker 1: the demand side Regina is telling in terms of the

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Speaker 1: global economy. Everyone's worried about um, the yield curve coming

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Speaker 1: down and you know, oh Macron plus tightening of the FED.

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Speaker 1: But if if the market's willing to bet so big

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Speaker 1: on oil, it's got to say something about global growth, right.

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Speaker 1: I think that's fair. I mean there's pent up consumer

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Speaker 1: demand for consumable goods for travel, and a lot of

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Speaker 1: those consumable goods have components that all come from hydro

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Speaker 1: carbons and from a barrel of crude, and with supply

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Speaker 1: constrained and demand expected to increase, that's why you're starting

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Speaker 1: to see triple digits potentially come into the frame. And

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Speaker 1: then you add into that the inflationary pressures, increasing cost

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Speaker 1: of capital some of the geopolitical hotspots. It all leads

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Speaker 1: to potential upward momentum for oil price, at least in

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Speaker 1: the near term. Regina, how about our good friends in

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Speaker 1: Texas and Oklahoma, the shale patch folks. I kind of

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Speaker 1: expected them to not be as disciplined as they have been.

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Speaker 1: I expected them when they saw seventy start, you know,

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Speaker 1: putting some holes in the ground. I think you're right,

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Speaker 1: it's definitely coming um. And also our friends to the north,

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Speaker 1: like Canadian rig count and one week went up fifty rigs.

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Speaker 1: The US is up thirteen week over week. We are

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Speaker 1: in the range where it will spur marginal production, and

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Speaker 1: that expectation is that US, Canada and Brazil will start

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Speaker 1: to help fill the gap. We've seen so many headlines

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Speaker 1: about the popularity of e vs, especially in Europe. The

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Speaker 1: growth in sales is that making a dent at all

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Speaker 1: in demand? No, no, not yet. It's so marginal. It's

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Speaker 1: such a it's such a blip in terms of overall

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Speaker 1: fuel consumption that it cannot yet make a dent in

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Speaker 1: liquid fuels demand. How about Russia, just real quickly, what

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Speaker 1: should we expect from Russia in terms of their discipline? Well,

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Speaker 1: how are they going to disappear? They're at capacity to um.

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Speaker 1: You know, they may say other things, but what we're

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Speaker 1: hearing is they would pump more if they could. All right, Regina,

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Speaker 1: thank you so much for joining us. We always appreciate

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Speaker 1: getting your perspective on these global energy markets. Again, w

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Speaker 1: T I crew to oil eight five bucks empower. Whenever

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Speaker 1: I see that, I just expect those wildcatters down in

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Speaker 1: Texas and Oklahoma and it started drilling. But they've been

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Speaker 1: pretty disciplined to date. Regina mayor Use, a principal Global

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Speaker 1: sector head of Energy at KPMG, giving us the thoughts

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Speaker 1: here again raising the specter that we're gonna get you know,

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Speaker 1: triple digit oil. It's been a long time since we've

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Speaker 1: seen that. But you've got rising demand on a reopening

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Speaker 1: global economy, and then to date you've had this supply

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Speaker 1: pretty well fixed by OPEC, OPEC plus and even by

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Speaker 1: the U S producers. So there you go. It's a

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Speaker 1: commodity supply demand. All right. Let's talk supply chain. We

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Speaker 1: talked about that a lot. It's an issue for so

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Speaker 1: many companies, really on a global scale, And I think

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Speaker 1: about supply chain concerns. I think about big cargo ships

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Speaker 1: starranded off the coast of l A waiting to get

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Speaker 1: into port. I think about not enough truck drivers to

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Speaker 1: get the stuff out of the ports. But it's also

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Speaker 1: that last mile getting the stuff to your door and questions,

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Speaker 1: you know, when can technology do? How can technology help

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Speaker 1: this whole process? Pain Hunter, he's a CEO and board

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Speaker 1: member of get Swift. Pain thanks so much for joining

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Speaker 1: us here. Tell us just a little bit about what

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Speaker 1: debts swift does and how you kind of work with

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Speaker 1: the supply chain. Good morning Matt and Paul. Thanks thanks

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Speaker 1: for having me on. So get Swift we operate in

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Speaker 1: about seventy countries across almost seventy verticals, so different different industries.

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Speaker 1: And what we do is we provide assess softwares and

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Speaker 1: service um automation for last mail delivery, including a workforce

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Speaker 1: automation in a series of other kind activity services. So

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Speaker 1: you could say that we touch everything from your local

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Speaker 1: mom and pop store at the corner all the way

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Speaker 1: to large multinationals. Now, what I have to do point

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Speaker 1: out is what we don't do is we don't actually

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Speaker 1: provide drivers. So what we do is effectively partner with

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Speaker 1: the companies and the service providers to automate everything. We

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Speaker 1: have technology. So how hectic had the last two years

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Speaker 1: been for you? Um? Think of it this way? I

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Speaker 1: would put it by saying that two years have equated

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Speaker 1: to probably ten to fifteen years in normal times. Everything

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Speaker 1: kind of got hyper compressed, to put it mildly, And

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Speaker 1: I'm not what was it? What was it like? I mean,

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Speaker 1: talk to us about March um of was it just

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Speaker 1: all of a sudden business is going bananas? It's more

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Speaker 1: than going bananas. Really, what you had is I think

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Speaker 1: you had to breakdown what I call organizational inertia. Right

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Speaker 1: any time you would try to talk about how the

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Speaker 1: market is changing, consumer behavior was changing, you would invariably

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Speaker 1: encounter resist. It's not in organizations, but some all of

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Speaker 1: a sudden, literally in a period of a few months,

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Speaker 1: um consumer behavior didn't just expect they demanded it. And

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Speaker 1: for a lot of our customers and a lot of

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Speaker 1: I would say businesses out there, the realization was a

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Speaker 1: very simple real station. Either you evolved and change and

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Speaker 1: you provide the service, or you're going to go by

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Speaker 1: the way of the dinosaur, and it was really something

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Speaker 1: to behold. I haven't seen anything like it probably since

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Speaker 1: the days of the you know, the dot com one,

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Speaker 1: you know, everybody started going onto the what do you

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Speaker 1: call world what web bin? You know, we as we

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Speaker 1: think about the supply chain challenges here and again it's

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Speaker 1: a global issue. Does this call into question the whole

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Speaker 1: concept of just in time inventory? Yes, it does. And

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Speaker 1: I think there's a very important lesson in all this,

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Speaker 1: you know, and I'm going to use in an analogy,

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Speaker 1: and the analogy is that, you know, the lack of

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Speaker 1: pain does not mean that there's not a fundamentally something

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Speaker 1: wrong underneath it. You know, you're still have some form

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Speaker 1: of disease. So what really the pandemic in the last

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Speaker 1: two years have done is they have stress tested the system.

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Speaker 1: And what has come out as a result of that

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Speaker 1: is that first of all, one, it's not unified to

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Speaker 1: um it's it's really not being managed effectively from like

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Speaker 1: call it a risk horizon aspect of it. And the

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Speaker 1: third aspect that I would also point out, it's disjointed.

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Speaker 1: Technology is really not unified. There's not visibility in the

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Speaker 1: full supply chet system. And that's exactly what we're seeing

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Speaker 1: right now, both in terms of you know, what we

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Speaker 1: see on the shelves and in terms of the cost

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Speaker 1: of goods going up. What is the future bane of

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Speaker 1: your industry? I mean, is there a blockchain involved somehow? Um?

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Speaker 1: Is there drastic change coming up? Yeah? I would say

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Speaker 1: you would have to kind of you know, segmented a bit.

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Speaker 1: The first one is workforce management, right, Um, there has

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Speaker 1: to be fundamentally a change in terms of the way

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Speaker 1: you know, we are evaluating and we're managing the workforce

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Speaker 1: in terms of the supply chain. The second is I'm

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Speaker 1: a huge believer in automation, and I'm a huge believer

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Speaker 1: in emerging technologies, whether there be green I know, you

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Speaker 1: guys were talking about hydrogen, you know, and e V

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Speaker 1: vehicles and what have you not. I think that is

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Speaker 1: a very important component. But together with that, I think

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Speaker 1: the other component is going to be a I uh

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Speaker 1: and or machine learning in other words, what portion of

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Speaker 1: what we do can be automated? And then the last

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Speaker 1: component is, uh, you know, let's call the future modeling.

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Speaker 1: What does technology to tell you what the upcoming needs

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Speaker 1: for the supply chain aren't. And then how do you

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Speaker 1: manage that to the full life cycle, whether it's farm

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Speaker 1: to table, whether it's managing something from overseas or dealing

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Speaker 1: with you know, your basic obstacles that you have, wants,

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Speaker 1: you're good to land at the port. All right, very

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Speaker 1: cool stuff. I find it fascinating. Paul and I have

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Speaker 1: been talking supply chain. Yeah, a lot about the supply chain,

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Speaker 1: obviously everyone has over the last two years, which is

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Speaker 1: why it's so great to get some time with you. Bin,

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Speaker 1: thanks so much for joining us. Baint Hunter is the

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Speaker 1: CEO of get Swift, the ticker g S. W Andy

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Speaker 1: Marsh joins us. He's the ce of Plug Power and

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Speaker 1: this is a company that is innovative in terms of

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Speaker 1: alternative energy sources, specifically hydrogen and fuel cell technology, and

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Speaker 1: he thanks so much for joining us. Um it has

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Speaker 1: been an amazing time for your company and for alternative

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Speaker 1: fuel sources. But you know, you know a lot of

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Speaker 1: people here hydrogen fuel cell and they think, isn't that

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Speaker 1: you know? And also ran, isn't that done? Didn't batteries win?

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Speaker 1: What do you say? Well, I would step back and say,

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Speaker 1: you know, we've been Plug has been doing this for

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Speaker 1: twenty five years. UH, we have fifty tho UITs out

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Speaker 1: there were the largest user of liquid hydrogen. And I

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Speaker 1: think when you step back and you look at Walmart

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Speaker 1: distribution centers, in those distribution centers and around the country,

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Speaker 1: the food that got on people's table were in COVID

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Speaker 1: somewhere along the line touched the plug power product. And

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Speaker 1: you can't say the same for listening batteries. When is though,

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Speaker 1: you know? UM I started out as a cover reporter

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Speaker 1: in and Frankfurt and around that time BMW had these

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Speaker 1: hydrogen fuel cell seven series running around Germany, UH, and

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Speaker 1: they said, you know, in giant letters, hydrogen fuel cell

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Speaker 1: on the side, and I thought, man, that's got to

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Speaker 1: be the future. They're not doing that now, though, how

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Speaker 1: come we don't see it coming to you know, consumer vehicles. Well,

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Speaker 1: I think we're you're going first hydrogen, you know plugs,

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Speaker 1: learning that hydrogen really has its greatest value in commercial activities.

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Speaker 1: And we have a joint venture with Renault you Inferrance,

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Speaker 1: for which is the second largest battery electric vehicle commercial

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Speaker 1: vehicle company in Europe, and we're putting on the road

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Speaker 1: this year three fuel cell power vehicles UH for moving

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Speaker 1: goods for moving people at airports. And by the year

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Speaker 1: we expect to have about a hundred thousand of these

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Speaker 1: vehicles on the road. The developments happening, the technology is there,

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Speaker 1: and PLUGS been deeply involved in all of it. So

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Speaker 1: andy hell supportive is US policy to date for hydrogen

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Speaker 1: fuel and hydrogen use? Is there some things need to

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Speaker 1: change or is it pretty accommodative supportive? You know, one

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Speaker 1: of the advantages I've seen in the United States that

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Speaker 1: PLUGS worked closely with people like Senator Schumer for twenty

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Speaker 1: years in setting the setting the policy in place in

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Speaker 1: the US for fuel fell tax credits. You know, at

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Speaker 1: the moment we're building the largest green hydrogen network across

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Speaker 1: the country. We have one in Alabama, New York, one

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Speaker 1: in California, one in Georgia. And with those hydrogen plants.

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Speaker 1: You know, if you look at the what was in

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Speaker 1: the Build Back Better Bill, and I think you saw

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Speaker 1: have been seeing that the climate provisions are still strongly

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Speaker 1: supported by Senator Mansion, who has been deeply involved in

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Speaker 1: writing the green hydrogen aspect of that bill. With that

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Speaker 1: built passes, the US will have the leading policy in

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Speaker 1: the world of support the deployment of green hydrogen. And

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Speaker 1: no company is going to be in a better position

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Speaker 1: than Plug because quite honestly, we're building it now and greener.

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Speaker 1: I imagine you know there are I guess, different kinds

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Speaker 1: of hydrogen when you look at the production right, Um,

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Speaker 1: is there a greener way to do it? A better

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Speaker 1: way to make hydrogen? So? Plug absolutely, and that's why

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Speaker 1: we're building the first nationwide network and even in Europe

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Speaker 1: we're doing activities today. Maybe take a look at the

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Speaker 1: plant we're building in Alabama, New York. It uses hydro

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Speaker 1: electric power. If you look at the plant we're building

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Speaker 1: in Texas, it uses wind power. It's a feed stock

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Speaker 1: with plug power electrolyzers to create the hydrogen. And in California,

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Speaker 1: the facilities running off solar power couple with plug power electrolyzers.

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Speaker 1: That's the way to do it. I was over at

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Speaker 1: cop and even when you talk to utilities, they know

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Speaker 1: ultimately the hydrogen needed for the world needs to be green,

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Speaker 1: and that really gives PLUG a differential advantage. So, and

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Speaker 1: I'm looking at your stock, it's off on a trailing

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Speaker 1: twelve month basis. About what's the market concerned about with

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Speaker 1: your company? Well, I think that when you you know,

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Speaker 1: take a look first, I want to take a step

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Speaker 1: back and say, when you start thinking about a world

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Speaker 1: where the world's going to be renewable high hydrogen that look,

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Speaker 1: there's ups and down, there's issues with the FEDS, but

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Speaker 1: long term, this company has an incredibly strong balance sheet

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Speaker 1: that can execute on its business plan. With the balance

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Speaker 1: sheet it has today, we ended the year with over

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Speaker 1: four and a half billion dollars in the bank. I think, uh,

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Speaker 1: you know, we're feeling some of the impacts of the

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Speaker 1: down downward spiral in the market. We believe it's going

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Speaker 1: to recover soon, and we believe that, uh, you know,

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Speaker 1: as many analysts. I had an update call him update

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Speaker 1: call on Tuesday, and the analysts, you know, thirteen analysts

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Speaker 1: came up and said said, plug Power as the stock

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Speaker 1: you one I owned in this space. And that I

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Speaker 1: think is because we've been doing it so long. People

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Speaker 1: know we're not an overnight success. We know how to

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Speaker 1: make fuel cells, we know how to generate hydrogen, we

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Speaker 1: know how to put vehicles on the road. Yeah, I'm

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Speaker 1: looking at the in our function met on the Bloomberg

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Speaker 1: terminal twenty buys five holds in one cell. So still

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Speaker 1: Street pretty supportive here of this story. But is there

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Speaker 1: a path to profitability? Andy? Oh? Absolutely, you You're you're

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Speaker 1: going to see late that the company will be profitable.

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Speaker 1: All right, We appreciate it. Andy, thanks so much for

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Speaker 1: taking the time to get on the phone with us.

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Speaker 1: Andy Marcy's the CEO of Plug Power. It's a publicly

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Speaker 1: traded company symbol p l u G. Thanks for listening

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Speaker 1: to the Bloomberg Markets podcast. You can subscribe and listen

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Speaker 1: to interviews with Apple Podcasts or whatever podcast platform you prefer.

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Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three.

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Speaker 1: Put on fall Sweeney. I'm on Twitter at pt Sweeney

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Speaker 1: Before the podcast. You can always catch us worldwide at

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Speaker 1: Bloomberg Radio.