WEBVTT - Markets, Oil, And Green Hydrogen 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 --> 0:00:23.360 at Bloomberg dot com slash podcast. I saw a pretty 0:00:23.600 --> 0:00:26.200 cool chart this morning on the Daybreak newsletter. Do you 0:00:26.200 --> 0:00:29.920 read that every day? Paul? The Daybreak News like yeah. Um. 0:00:29.960 --> 0:00:33.680 They feature different charts in macro views, and one that 0:00:33.720 --> 0:00:37.879 I saw was going back twenty years. Whenever we go 0:00:38.080 --> 0:00:42.479 into a rate rising cycle, you start to see the 0:00:42.600 --> 0:00:48.120 yield curve go down or tighten so um for example, 0:00:48.159 --> 0:00:50.960 the spreads between spread between twos and the tens just 0:00:51.000 --> 0:00:53.880 starts to tighten up and maybe even at some points invert. 0:00:54.080 --> 0:00:57.440 Every single rate increase cycle that we've had over the 0:00:57.520 --> 0:01:00.280 last twenty years. Now, that maybe is bad news for 0:01:00.320 --> 0:01:02.320 the economy because of what it signals, and because of 0:01:02.360 --> 0:01:05.000 the fact that we're already looking at a yield curve 0:01:05.040 --> 0:01:08.319 that's going down as the fed um is expected to raise. 0:01:08.720 --> 0:01:11.640 For some people saying now five times this year what 0:01:11.680 --> 0:01:13.480 does that mean. Let's go to Jay Hatfield right now. 0:01:13.520 --> 0:01:18.480 He's the CEO uh Infrastructure Capital Advisors. They have a 0:01:18.560 --> 0:01:21.880 number of funds under management, but he has a long 0:01:22.040 --> 0:01:26.880 career on the street as well as uh NBAS from 0:01:26.880 --> 0:01:29.560 Wharton and U. C. Davis. He worked at S A. C. Capital. 0:01:30.319 --> 0:01:33.640 He was a principal and investmentking at Morgan Stanley. Incredible really, 0:01:33.760 --> 0:01:35.840 c v J. So I appreciate you spending some time 0:01:35.840 --> 0:01:38.280 with us. What do you think about the economy now? 0:01:38.319 --> 0:01:42.119 It looks like, uh, we're trending down in some ways 0:01:42.440 --> 0:01:46.560 at a time when the FED is about to tighten. Well, 0:01:46.920 --> 0:01:48.680 first of all, Matta and Paul, thanks for having me 0:01:48.680 --> 0:01:52.920 on your show again. We think the critical judgment is 0:01:53.000 --> 0:01:58.320 whether the FED is going to overtighten. The data is 0:01:58.400 --> 0:02:02.160 that in the nineteen I'm sorry, of the nineteen tightenings, 0:02:02.720 --> 0:02:06.280 eleven have ended up in recessions and eight in a 0:02:06.360 --> 0:02:10.520 mid cycle soft landing. So that's the critical issue. And 0:02:10.560 --> 0:02:14.800 I think the minutes really disturbed the market because there 0:02:14.880 --> 0:02:17.760 was a lot of discussion about quantitative tightening, which is 0:02:17.760 --> 0:02:21.720 a disaster. But we're more optimistic to the market because 0:02:21.720 --> 0:02:24.680 we don't think they've focused on the fact that Biden 0:02:24.720 --> 0:02:27.040 will have that pointed five out of the seven f 0:02:27.080 --> 0:02:31.200 o MC members soon when they get approved. But that 0:02:31.280 --> 0:02:34.000 doesn't mean that the market won't weaken you know, obviously 0:02:34.160 --> 0:02:37.480 weakened from here is a critical area, and I would 0:02:37.560 --> 0:02:42.080 note as well. Alright, so, Jay, I guess the issue 0:02:42.120 --> 0:02:44.160 for this Federal Reserve. It seems to me, and I'm 0:02:44.200 --> 0:02:49.320 just a novice here, that the signaling the communications been 0:02:49.560 --> 0:02:53.480 very good, Yet the market, as you noted, has maybe 0:02:53.480 --> 0:02:56.320 even thought about the Fed might go even further than 0:02:56.360 --> 0:02:58.800 what they've signaled. How do you think this Federal Reserve 0:02:58.840 --> 0:03:02.200 will proceed from here? Well, I think that what you 0:03:02.240 --> 0:03:04.280 could see, which would be the bowl case, is that 0:03:04.360 --> 0:03:06.880 they go and correct a little bit of this what 0:03:06.919 --> 0:03:09.919 we believe is a misconception about the minutes. Keep in 0:03:09.960 --> 0:03:13.600 mind when the minutes say certain participants, but we don't 0:03:13.639 --> 0:03:16.440 know who those people are. They could just be the 0:03:16.440 --> 0:03:19.640 regional FED governors which tend to be more hawkish. So 0:03:19.760 --> 0:03:23.520 there could be a correction in the communication. Because we 0:03:23.600 --> 0:03:26.000 do believe, like you're one of your prior guests, that 0:03:26.280 --> 0:03:30.360 financial conditions have tightened. Mortgage rates are at basis points 0:03:30.440 --> 0:03:34.120 higher than they were prior to the capitulation on transitory 0:03:34.280 --> 0:03:38.760 so it's possible that Powell tries to soften the message 0:03:39.400 --> 0:03:42.560 and maybe take quantitative tightening off the table, which is 0:03:42.600 --> 0:03:45.960 horrendous for the market because liquidity is what really drives 0:03:45.960 --> 0:03:49.800 the market, not interest rates. So if there's more reduction 0:03:49.840 --> 0:03:51.920 in liquidity, then you know, we think there could be 0:03:51.960 --> 0:03:55.400 a crash and Bitcoin and some of these other momentum 0:03:55.480 --> 0:03:58.800 type investments. That's a great point. I was just reading 0:03:58.840 --> 0:04:01.839 a couple of days ago Muhammad al Arian's column where 0:04:01.840 --> 0:04:05.280 he asked, um, when FED tightening is going to hit 0:04:05.320 --> 0:04:09.360 financial conditions or why it isn't now, And one of 0:04:09.360 --> 0:04:12.320 the reasons that he stated is it's really about the 0:04:12.400 --> 0:04:16.400 liquidity and not about the flow. Um, what what do 0:04:16.440 --> 0:04:19.680 you think about the levels here you mentioned and the 0:04:19.720 --> 0:04:23.200 market just started. I guess it's been kind of in 0:04:23.240 --> 0:04:26.880 a downward trend today, um since the open, and then 0:04:26.880 --> 0:04:31.080 it bounced off of basically forty nine and is now 0:04:31.120 --> 0:04:36.440 coming back up pretty dramatically. Well. Yes, the other easy 0:04:36.680 --> 0:04:40.279 rule is to be long during earning season, at least 0:04:40.279 --> 0:04:42.960 when the economy is strong. So typically we've had a 0:04:42.960 --> 0:04:47.400 few misses, obviously Netflix being the poster child, but normally 0:04:47.520 --> 0:04:52.800 earnings are good and the companies retained their their best 0:04:52.800 --> 0:04:57.359 releases for actual earnings call, so they're they're good news. 0:04:57.920 --> 0:05:01.520 So usually it pays to be long. Journey are in season, 0:05:01.560 --> 0:05:04.840 so it makes sense it's bouncing. But if we violate 0:05:05.120 --> 0:05:06.880 the two hunter day, then usually there's a lot of 0:05:06.920 --> 0:05:10.440 hedging activity that occurs, so it's a risky level in 0:05:10.480 --> 0:05:12.960 the market. What's your favorite sector here that you and 0:05:12.960 --> 0:05:16.160 your team are working on right now. We really prefer 0:05:16.480 --> 0:05:20.599 um are focused on preferred stocks. We think that not 0:05:20.800 --> 0:05:24.159 just value, Like there's been some discussions that even you know, 0:05:24.240 --> 0:05:27.120 value stocks are revived, so we always if we're thinking 0:05:27.120 --> 0:05:29.119 about value, we always want to get paid to weight 0:05:29.240 --> 0:05:33.200 and have income. So preferred stocks were not that bullish 0:05:33.240 --> 0:05:36.200 about the market this year. They have high dividend yields 0:05:36.200 --> 0:05:40.400 and low volatility like today most preferred funds are sort 0:05:40.400 --> 0:05:43.320 of flatished down like twenty basis points, so you get 0:05:43.400 --> 0:05:47.240 high income and low volatility. But we definitely think this 0:05:47.320 --> 0:05:49.920 year is going to be adult swim. So if you 0:05:50.040 --> 0:05:52.920 buy stocks, don't just buy value, but also by income, 0:05:53.000 --> 0:05:54.440 so you get paid to wait, so even if the 0:05:54.440 --> 0:05:59.360 market is down, your income is still stable. All right, Jay, 0:05:59.400 --> 0:06:02.520 Thanks so much for joining us. Really appreciate getting your thoughts. 0:06:02.680 --> 0:06:05.360 They're like getting paid to weight. That's a good feeling. 0:06:05.360 --> 0:06:08.839 I think Jay Halfield, CEO, founder and portfolio manager of 0:06:08.920 --> 0:06:17.960 Infrastructure Capital Advisors here, all right, let's talk energy. I 0:06:18.000 --> 0:06:21.279 got w T I crew eighty five bucks of barrel. 0:06:21.600 --> 0:06:23.440 Where is this thing going? I mean, if I'm gonna 0:06:23.440 --> 0:06:25.239 fill up mats, you know, four D f one fifty, 0:06:25.279 --> 0:06:27.719 it's going to cost a pretty penny. Regina Mayor, she 0:06:27.920 --> 0:06:31.599 is a principal Global sector head for Energy for KPMG, 0:06:31.760 --> 0:06:33.920 and she was a former officer in the U. S. 0:06:34.040 --> 0:06:36.919 Army Reserve, which is very cool. We appreciator service their Regina. 0:06:37.440 --> 0:06:40.600 Where is oil going here? I mean, I've got some 0:06:40.680 --> 0:06:44.919 demand picking up. I have OPEC saying pretty disciplined. Is 0:06:44.960 --> 0:06:48.560 this going higher? Well, it's really all over the map, 0:06:48.680 --> 0:06:51.600 and the predictions are starting to indicate that it will 0:06:51.680 --> 0:06:56.120 go higher. We think triple digit prices are in range 0:06:56.279 --> 0:07:00.400 because we see more upward price pressures versus the onward 0:07:00.440 --> 0:07:04.760 price pressures. UH supply is constrained. I think OPEC plus 0:07:04.839 --> 0:07:07.560 is not necessarily being disciplined. I really think they're at 0:07:07.720 --> 0:07:10.600 near or at capacity that we don't have a global 0:07:10.640 --> 0:07:14.520 safety valve. Yeah, yeah, I think that's partly why they're 0:07:14.560 --> 0:07:17.000 appearing to be so disciplined. Is the word on the 0:07:17.040 --> 0:07:21.160 street is they can't make any morggling. It's it's by 0:07:21.160 --> 0:07:24.800 the way OPEC go on the terminal, you know, of course, 0:07:24.800 --> 0:07:29.280 a great function and you can see that what Regina 0:07:29.360 --> 0:07:32.240 is saying is spot on correct. I mean there are 0:07:32.360 --> 0:07:36.000 very few members of OPEC that have any spare capacity. 0:07:36.040 --> 0:07:38.720 There's a graph in the lower left corner is very 0:07:38.800 --> 0:07:42.920 cool that shows you, UM, So it's interesting to me 0:07:43.040 --> 0:07:45.840 the demand side Regina is telling in terms of the 0:07:45.840 --> 0:07:50.280 global economy. Everyone's worried about um, the yield curve coming 0:07:50.360 --> 0:07:54.960 down and you know, oh Macron plus tightening of the FED. 0:07:55.000 --> 0:07:58.000 But if if the market's willing to bet so big 0:07:58.040 --> 0:08:00.960 on oil, it's got to say something about global growth, right. 0:08:02.040 --> 0:08:04.760 I think that's fair. I mean there's pent up consumer 0:08:04.840 --> 0:08:08.960 demand for consumable goods for travel, and a lot of 0:08:09.000 --> 0:08:12.600 those consumable goods have components that all come from hydro 0:08:12.680 --> 0:08:15.960 carbons and from a barrel of crude, and with supply 0:08:16.280 --> 0:08:20.679 constrained and demand expected to increase, that's why you're starting 0:08:20.680 --> 0:08:23.640 to see triple digits potentially come into the frame. And 0:08:23.640 --> 0:08:27.360 then you add into that the inflationary pressures, increasing cost 0:08:27.440 --> 0:08:31.440 of capital some of the geopolitical hotspots. It all leads 0:08:31.480 --> 0:08:34.760 to potential upward momentum for oil price, at least in 0:08:34.800 --> 0:08:38.440 the near term. Regina, how about our good friends in 0:08:38.559 --> 0:08:43.440 Texas and Oklahoma, the shale patch folks. I kind of 0:08:43.480 --> 0:08:46.880 expected them to not be as disciplined as they have been. 0:08:46.920 --> 0:08:50.800 I expected them when they saw seventy start, you know, 0:08:51.520 --> 0:08:54.400 putting some holes in the ground. I think you're right, 0:08:54.520 --> 0:08:58.280 it's definitely coming um. And also our friends to the north, 0:08:58.440 --> 0:09:02.000 like Canadian rig count and one week went up fifty rigs. 0:09:02.120 --> 0:09:05.480 The US is up thirteen week over week. We are 0:09:05.640 --> 0:09:09.320 in the range where it will spur marginal production, and 0:09:09.360 --> 0:09:12.680 that expectation is that US, Canada and Brazil will start 0:09:12.720 --> 0:09:16.000 to help fill the gap. We've seen so many headlines 0:09:16.040 --> 0:09:19.920 about the popularity of e vs, especially in Europe. The 0:09:19.960 --> 0:09:22.960 growth in sales is that making a dent at all 0:09:23.280 --> 0:09:27.960 in demand? No, no, not yet. It's so marginal. It's 0:09:28.000 --> 0:09:30.360 such a it's such a blip in terms of overall 0:09:30.440 --> 0:09:34.680 fuel consumption that it cannot yet make a dent in 0:09:35.080 --> 0:09:38.800 liquid fuels demand. How about Russia, just real quickly, what 0:09:38.800 --> 0:09:43.040 should we expect from Russia in terms of their discipline? Well, 0:09:43.520 --> 0:09:48.079 how are they going to disappear? They're at capacity to um. 0:09:48.120 --> 0:09:50.959 You know, they may say other things, but what we're 0:09:51.000 --> 0:09:55.120 hearing is they would pump more if they could. All right, Regina, 0:09:55.160 --> 0:09:56.880 thank you so much for joining us. We always appreciate 0:09:56.880 --> 0:10:00.560 getting your perspective on these global energy markets. Again, w 0:10:00.640 --> 0:10:02.959 T I crew to oil eight five bucks empower. Whenever 0:10:03.000 --> 0:10:05.760 I see that, I just expect those wildcatters down in 0:10:05.800 --> 0:10:07.720 Texas and Oklahoma and it started drilling. But they've been 0:10:07.720 --> 0:10:10.800 pretty disciplined to date. Regina mayor Use, a principal Global 0:10:10.840 --> 0:10:14.560 sector head of Energy at KPMG, giving us the thoughts 0:10:14.559 --> 0:10:17.920 here again raising the specter that we're gonna get you know, 0:10:18.040 --> 0:10:21.560 triple digit oil. It's been a long time since we've 0:10:21.640 --> 0:10:25.439 seen that. But you've got rising demand on a reopening 0:10:25.440 --> 0:10:28.280 global economy, and then to date you've had this supply 0:10:28.520 --> 0:10:31.800 pretty well fixed by OPEC, OPEC plus and even by 0:10:31.840 --> 0:10:33.960 the U S producers. So there you go. It's a 0:10:33.960 --> 0:10:40.600 commodity supply demand. All right. Let's talk supply chain. We 0:10:40.679 --> 0:10:43.080 talked about that a lot. It's an issue for so 0:10:43.120 --> 0:10:46.120 many companies, really on a global scale, And I think 0:10:46.120 --> 0:10:49.320 about supply chain concerns. I think about big cargo ships 0:10:49.440 --> 0:10:51.840 starranded off the coast of l A waiting to get 0:10:51.880 --> 0:10:54.480 into port. I think about not enough truck drivers to 0:10:54.520 --> 0:10:57.800 get the stuff out of the ports. But it's also 0:10:57.840 --> 0:11:01.360 that last mile getting the stuff to your door and questions, 0:11:01.480 --> 0:11:04.720 you know, when can technology do? How can technology help 0:11:04.760 --> 0:11:07.160 this whole process? Pain Hunter, he's a CEO and board 0:11:07.240 --> 0:11:10.120 member of get Swift. Pain thanks so much for joining 0:11:10.160 --> 0:11:11.600 us here. Tell us just a little bit about what 0:11:11.760 --> 0:11:15.080 debts swift does and how you kind of work with 0:11:15.080 --> 0:11:18.400 the supply chain. Good morning Matt and Paul. Thanks thanks 0:11:18.400 --> 0:11:21.720 for having me on. So get Swift we operate in 0:11:21.720 --> 0:11:26.880 about seventy countries across almost seventy verticals, so different different industries. 0:11:27.120 --> 0:11:30.000 And what we do is we provide assess softwares and 0:11:30.040 --> 0:11:34.680 service um automation for last mail delivery, including a workforce 0:11:34.679 --> 0:11:37.920 automation in a series of other kind activity services. So 0:11:38.000 --> 0:11:40.640 you could say that we touch everything from your local 0:11:40.840 --> 0:11:43.280 mom and pop store at the corner all the way 0:11:43.320 --> 0:11:46.559 to large multinationals. Now, what I have to do point 0:11:46.559 --> 0:11:48.520 out is what we don't do is we don't actually 0:11:48.559 --> 0:11:53.040 provide drivers. So what we do is effectively partner with 0:11:53.840 --> 0:11:57.839 the companies and the service providers to automate everything. We 0:11:57.920 --> 0:12:02.079 have technology. So how hectic had the last two years 0:12:02.080 --> 0:12:05.679 been for you? Um? Think of it this way? I 0:12:05.720 --> 0:12:09.319 would put it by saying that two years have equated 0:12:09.440 --> 0:12:13.160 to probably ten to fifteen years in normal times. Everything 0:12:13.440 --> 0:12:17.040 kind of got hyper compressed, to put it mildly, And 0:12:17.120 --> 0:12:19.920 I'm not what was it? What was it like? I mean, 0:12:20.480 --> 0:12:25.480 talk to us about March um of was it just 0:12:25.640 --> 0:12:31.600 all of a sudden business is going bananas? It's more 0:12:31.640 --> 0:12:34.080 than going bananas. Really, what you had is I think 0:12:34.080 --> 0:12:36.960 you had to breakdown what I call organizational inertia. Right 0:12:37.040 --> 0:12:39.800 any time you would try to talk about how the 0:12:39.840 --> 0:12:43.120 market is changing, consumer behavior was changing, you would invariably 0:12:43.160 --> 0:12:46.719 encounter resist. It's not in organizations, but some all of 0:12:46.800 --> 0:12:49.520 a sudden, literally in a period of a few months, 0:12:50.040 --> 0:12:54.199 um consumer behavior didn't just expect they demanded it. And 0:12:54.280 --> 0:12:56.440 for a lot of our customers and a lot of 0:12:56.559 --> 0:12:59.280 I would say businesses out there, the realization was a 0:12:59.360 --> 0:13:02.679 very simple real station. Either you evolved and change and 0:13:02.679 --> 0:13:05.280 you provide the service, or you're going to go by 0:13:05.280 --> 0:13:08.160 the way of the dinosaur, and it was really something 0:13:08.160 --> 0:13:10.760 to behold. I haven't seen anything like it probably since 0:13:10.800 --> 0:13:12.920 the days of the you know, the dot com one, 0:13:13.120 --> 0:13:14.880 you know, everybody started going onto the what do you 0:13:14.920 --> 0:13:18.040 call world what web bin? You know, we as we 0:13:18.040 --> 0:13:20.920 think about the supply chain challenges here and again it's 0:13:20.960 --> 0:13:24.600 a global issue. Does this call into question the whole 0:13:24.720 --> 0:13:29.480 concept of just in time inventory? Yes, it does. And 0:13:29.520 --> 0:13:32.160 I think there's a very important lesson in all this, 0:13:32.400 --> 0:13:34.360 you know, and I'm going to use in an analogy, 0:13:34.440 --> 0:13:36.680 and the analogy is that, you know, the lack of 0:13:36.760 --> 0:13:39.800 pain does not mean that there's not a fundamentally something 0:13:39.840 --> 0:13:42.360 wrong underneath it. You know, you're still have some form 0:13:42.400 --> 0:13:45.160 of disease. So what really the pandemic in the last 0:13:45.160 --> 0:13:47.440 two years have done is they have stress tested the system. 0:13:48.320 --> 0:13:50.960 And what has come out as a result of that 0:13:51.320 --> 0:13:54.760 is that first of all, one, it's not unified to 0:13:55.640 --> 0:13:59.720 um it's it's really not being managed effectively from like 0:14:00.040 --> 0:14:03.240 call it a risk horizon aspect of it. And the 0:14:03.280 --> 0:14:06.080 third aspect that I would also point out, it's disjointed. 0:14:06.400 --> 0:14:09.720 Technology is really not unified. There's not visibility in the 0:14:09.760 --> 0:14:12.880 full supply chet system. And that's exactly what we're seeing 0:14:13.000 --> 0:14:15.439 right now, both in terms of you know, what we 0:14:15.480 --> 0:14:18.080 see on the shelves and in terms of the cost 0:14:18.160 --> 0:14:22.200 of goods going up. What is the future bane of 0:14:22.240 --> 0:14:26.400 your industry? I mean, is there a blockchain involved somehow? Um? 0:14:26.640 --> 0:14:30.120 Is there drastic change coming up? Yeah? I would say 0:14:30.400 --> 0:14:32.720 you would have to kind of you know, segmented a bit. 0:14:32.760 --> 0:14:37.120 The first one is workforce management, right, Um, there has 0:14:37.200 --> 0:14:39.400 to be fundamentally a change in terms of the way 0:14:39.800 --> 0:14:43.040 you know, we are evaluating and we're managing the workforce 0:14:43.400 --> 0:14:46.480 in terms of the supply chain. The second is I'm 0:14:46.520 --> 0:14:50.040 a huge believer in automation, and I'm a huge believer 0:14:50.160 --> 0:14:53.400 in emerging technologies, whether there be green I know, you 0:14:53.440 --> 0:14:55.440 guys were talking about hydrogen, you know, and e V 0:14:55.640 --> 0:14:57.560 vehicles and what have you not. I think that is 0:14:57.600 --> 0:15:00.840 a very important component. But together with that, I think 0:15:00.840 --> 0:15:03.080 the other component is going to be a I uh 0:15:03.440 --> 0:15:06.640 and or machine learning in other words, what portion of 0:15:06.680 --> 0:15:09.800 what we do can be automated? And then the last 0:15:09.800 --> 0:15:12.800 component is, uh, you know, let's call the future modeling. 0:15:13.160 --> 0:15:16.400 What does technology to tell you what the upcoming needs 0:15:16.440 --> 0:15:18.800 for the supply chain aren't. And then how do you 0:15:19.160 --> 0:15:22.120 manage that to the full life cycle, whether it's farm 0:15:22.160 --> 0:15:27.000 to table, whether it's managing something from overseas or dealing 0:15:27.040 --> 0:15:30.000 with you know, your basic obstacles that you have, wants, 0:15:30.000 --> 0:15:33.640 you're good to land at the port. All right, very 0:15:33.640 --> 0:15:36.520 cool stuff. I find it fascinating. Paul and I have 0:15:36.560 --> 0:15:40.040 been talking supply chain. Yeah, a lot about the supply chain, 0:15:40.320 --> 0:15:43.080 obviously everyone has over the last two years, which is 0:15:43.120 --> 0:15:44.560 why it's so great to get some time with you. Bin, 0:15:44.600 --> 0:15:47.240 thanks so much for joining us. Baint Hunter is the 0:15:47.240 --> 0:15:58.360 CEO of get Swift, the ticker g S. W Andy 0:15:58.400 --> 0:16:02.400 Marsh joins us. He's the ce of Plug Power and 0:16:02.720 --> 0:16:06.840 this is a company that is innovative in terms of 0:16:06.880 --> 0:16:13.120 alternative energy sources, specifically hydrogen and fuel cell technology, and 0:16:13.200 --> 0:16:17.040 he thanks so much for joining us. Um it has 0:16:17.080 --> 0:16:21.280 been an amazing time for your company and for alternative 0:16:21.320 --> 0:16:24.080 fuel sources. But you know, you know a lot of 0:16:24.080 --> 0:16:27.760 people here hydrogen fuel cell and they think, isn't that 0:16:28.360 --> 0:16:33.200 you know? And also ran, isn't that done? Didn't batteries win? 0:16:33.440 --> 0:16:37.200 What do you say? Well, I would step back and say, 0:16:37.440 --> 0:16:39.400 you know, we've been Plug has been doing this for 0:16:39.440 --> 0:16:43.560 twenty five years. UH, we have fifty tho UITs out 0:16:43.560 --> 0:16:47.160 there were the largest user of liquid hydrogen. And I 0:16:47.160 --> 0:16:50.880 think when you step back and you look at Walmart 0:16:50.960 --> 0:16:55.880 distribution centers, in those distribution centers and around the country, 0:16:56.600 --> 0:17:00.720 the food that got on people's table were in COVID 0:17:01.040 --> 0:17:04.560 somewhere along the line touched the plug power product. And 0:17:04.640 --> 0:17:07.720 you can't say the same for listening batteries. When is though, 0:17:07.840 --> 0:17:10.360 you know? UM I started out as a cover reporter 0:17:10.720 --> 0:17:16.520 in and Frankfurt and around that time BMW had these 0:17:16.640 --> 0:17:21.119 hydrogen fuel cell seven series running around Germany, UH, and 0:17:21.200 --> 0:17:23.800 they said, you know, in giant letters, hydrogen fuel cell 0:17:23.840 --> 0:17:25.560 on the side, and I thought, man, that's got to 0:17:25.600 --> 0:17:28.959 be the future. They're not doing that now, though, how 0:17:29.000 --> 0:17:34.399 come we don't see it coming to you know, consumer vehicles. Well, 0:17:34.440 --> 0:17:38.240 I think we're you're going first hydrogen, you know plugs, 0:17:38.320 --> 0:17:43.200 learning that hydrogen really has its greatest value in commercial activities. 0:17:43.880 --> 0:17:48.080 And we have a joint venture with Renault you Inferrance, 0:17:48.640 --> 0:17:53.880 for which is the second largest battery electric vehicle commercial 0:17:54.000 --> 0:17:57.520 vehicle company in Europe, and we're putting on the road 0:17:57.600 --> 0:18:02.280 this year three fuel cell power vehicles UH for moving 0:18:02.320 --> 0:18:05.800 goods for moving people at airports. And by the year 0:18:06.640 --> 0:18:09.800 we expect to have about a hundred thousand of these 0:18:09.880 --> 0:18:14.000 vehicles on the road. The developments happening, the technology is there, 0:18:14.440 --> 0:18:17.679 and PLUGS been deeply involved in all of it. So 0:18:18.280 --> 0:18:22.520 andy hell supportive is US policy to date for hydrogen 0:18:23.480 --> 0:18:27.080 fuel and hydrogen use? Is there some things need to 0:18:27.160 --> 0:18:31.720 change or is it pretty accommodative supportive? You know, one 0:18:31.720 --> 0:18:36.639 of the advantages I've seen in the United States that 0:18:37.960 --> 0:18:41.720 PLUGS worked closely with people like Senator Schumer for twenty 0:18:41.840 --> 0:18:47.399 years in setting the setting the policy in place in 0:18:47.440 --> 0:18:50.639 the US for fuel fell tax credits. You know, at 0:18:50.640 --> 0:18:54.520 the moment we're building the largest green hydrogen network across 0:18:54.680 --> 0:18:57.800 the country. We have one in Alabama, New York, one 0:18:57.840 --> 0:19:02.920 in California, one in Georgia. And with those hydrogen plants. 0:19:03.720 --> 0:19:06.040 You know, if you look at the what was in 0:19:06.040 --> 0:19:08.680 the Build Back Better Bill, and I think you saw 0:19:08.840 --> 0:19:12.760 have been seeing that the climate provisions are still strongly 0:19:12.800 --> 0:19:16.919 supported by Senator Mansion, who has been deeply involved in 0:19:16.960 --> 0:19:20.879 writing the green hydrogen aspect of that bill. With that 0:19:21.040 --> 0:19:24.600 built passes, the US will have the leading policy in 0:19:24.600 --> 0:19:28.320 the world of support the deployment of green hydrogen. And 0:19:28.400 --> 0:19:30.320 no company is going to be in a better position 0:19:30.359 --> 0:19:36.520 than Plug because quite honestly, we're building it now and greener. 0:19:36.560 --> 0:19:41.000 I imagine you know there are I guess, different kinds 0:19:41.040 --> 0:19:44.400 of hydrogen when you look at the production right, Um, 0:19:45.119 --> 0:19:48.760 is there a greener way to do it? A better 0:19:48.760 --> 0:19:54.040 way to make hydrogen? So? Plug absolutely, and that's why 0:19:54.040 --> 0:19:57.439 we're building the first nationwide network and even in Europe 0:19:57.480 --> 0:20:00.679 we're doing activities today. Maybe take a look at the 0:20:00.720 --> 0:20:04.879 plant we're building in Alabama, New York. It uses hydro 0:20:05.040 --> 0:20:08.080 electric power. If you look at the plant we're building 0:20:08.119 --> 0:20:11.119 in Texas, it uses wind power. It's a feed stock 0:20:11.720 --> 0:20:16.200 with plug power electrolyzers to create the hydrogen. And in California, 0:20:16.240 --> 0:20:22.080 the facilities running off solar power couple with plug power electrolyzers. 0:20:22.520 --> 0:20:24.359 That's the way to do it. I was over at 0:20:24.400 --> 0:20:28.560 cop and even when you talk to utilities, they know 0:20:28.760 --> 0:20:32.840 ultimately the hydrogen needed for the world needs to be green, 0:20:33.320 --> 0:20:37.199 and that really gives PLUG a differential advantage. So, and 0:20:37.240 --> 0:20:39.399 I'm looking at your stock, it's off on a trailing 0:20:39.440 --> 0:20:43.720 twelve month basis. About what's the market concerned about with 0:20:43.920 --> 0:20:48.080 your company? Well, I think that when you you know, 0:20:48.280 --> 0:20:50.439 take a look first, I want to take a step 0:20:50.440 --> 0:20:54.399 back and say, when you start thinking about a world 0:20:54.520 --> 0:21:01.800 where the world's going to be renewable high hydrogen that look, 0:21:01.880 --> 0:21:05.280 there's ups and down, there's issues with the FEDS, but 0:21:05.440 --> 0:21:08.960 long term, this company has an incredibly strong balance sheet 0:21:09.440 --> 0:21:13.720 that can execute on its business plan. With the balance 0:21:13.720 --> 0:21:16.640 sheet it has today, we ended the year with over 0:21:16.760 --> 0:21:20.919 four and a half billion dollars in the bank. I think, uh, 0:21:21.000 --> 0:21:23.760 you know, we're feeling some of the impacts of the 0:21:23.840 --> 0:21:27.280 down downward spiral in the market. We believe it's going 0:21:27.320 --> 0:21:30.560 to recover soon, and we believe that, uh, you know, 0:21:30.640 --> 0:21:34.840 as many analysts. I had an update call him update 0:21:34.920 --> 0:21:39.320 call on Tuesday, and the analysts, you know, thirteen analysts 0:21:39.400 --> 0:21:43.080 came up and said said, plug Power as the stock 0:21:43.160 --> 0:21:45.679 you one I owned in this space. And that I 0:21:45.720 --> 0:21:48.800 think is because we've been doing it so long. People 0:21:48.840 --> 0:21:51.679 know we're not an overnight success. We know how to 0:21:51.720 --> 0:21:54.960 make fuel cells, we know how to generate hydrogen, we 0:21:55.080 --> 0:21:59.440 know how to put vehicles on the road. Yeah, I'm 0:21:59.440 --> 0:22:01.440 looking at the in our function met on the Bloomberg 0:22:01.480 --> 0:22:04.640 terminal twenty buys five holds in one cell. So still 0:22:04.720 --> 0:22:07.080 Street pretty supportive here of this story. But is there 0:22:07.080 --> 0:22:12.240 a path to profitability? Andy? Oh? Absolutely, you You're you're 0:22:12.280 --> 0:22:18.600 going to see late that the company will be profitable. 0:22:19.880 --> 0:22:21.879 All right, We appreciate it. Andy, thanks so much for 0:22:21.920 --> 0:22:24.760 taking the time to get on the phone with us. 0:22:24.760 --> 0:22:27.800 Andy Marcy's the CEO of Plug Power. It's a publicly 0:22:27.800 --> 0:22:32.600 traded company symbol p l u G. Thanks for listening 0:22:32.600 --> 0:22:36.080 to the Bloomberg Markets podcast. You can subscribe and listen 0:22:36.119 --> 0:22:40.399 to interviews with Apple Podcasts or whatever podcast platform you prefer. 0:22:40.760 --> 0:22:44.720 I'm Matt Miller. I'm on Twitter at Matt Miller three. 0:22:45.160 --> 0:22:47.640 Put on fall Sweeney. I'm on Twitter at pt Sweeney 0:22:47.720 --> 0:22:50.359 Before the podcast. You can always catch us worldwide at 0:22:50.400 --> 0:22:51.400 Bloomberg Radio.