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Speaker 3: we're going to go to one right now on BECHP
Speaker 3: and Anglo Americans. So BCHP is one of the world's
Speaker 3: largest metal producers and copper producers are huge, and they
Speaker 3: have made a third bid for Anglo American, which is
Speaker 3: another copper producer but has other stuff.
Speaker 2: They have some South African assets.
Speaker 3: They have De Beer's, for example, the diamond producer, They
Speaker 3: have a fertilizer, etc. And BHP really want wants to
Speaker 3: buy this company for its copper assets. Their third bid.
Speaker 3: The problem is it's complicated. They want to have Anglo
Speaker 3: Americans spin off all of its South African assets before
Speaker 3: the takeover, and that makes things a little daisy and
Speaker 3: Anglo American doesn't really like it. The difference is is
Speaker 3: that Anglo American is now talking to BHP and they
Speaker 3: will talk until May twenty nine. They have not yet talked.
Speaker 3: So let's get more on this. Grants for Bloomberg Intelligence
Speaker 3: Global head of Metals and Mining. So this bid, this
Speaker 3: third bid is almost fifty billion dollars US.
Speaker 2: I'm talking about. What do you think?
Speaker 4: I must be honest, Hi, thank you for having me on.
Speaker 4: It's further than I thought BHP would have gone, and
Speaker 4: it just shows how really keen they are on getting
Speaker 4: hold of Anglers, particularly the copper assets. There are some
Speaker 4: other interesting assets as well, but I think it just
Speaker 4: shows you what value BHP is ascribing to the whole
Speaker 4: Anglo portfolio. I must say, when we do a some
Speaker 4: of the parts valuation, we get to around about twenty
Speaker 4: nine pounds, which is kind of where the offer stands
Speaker 4: today on an undisturbed share price basis.
Speaker 3: An undisturbed share price means what before the bid was,
Speaker 3: before the rumor mill got the bid out, and then
Speaker 3: the price.
Speaker 4: Pace exactly, yeah, exactly, So the price is based on
Speaker 4: the twenty third of April, so before before the news
Speaker 4: came out. Basically on today's numbers, it's closer to thirty
Speaker 4: one pounds. That would be today's offer, which which kind
Speaker 4: of puts it above as some of the parts valuation.
Speaker 4: If you really want to stretch the valuation, I can
Speaker 4: get it to thirty eight pounds, but then you have
Speaker 4: to do some really interesting things. You have to say
Speaker 4: the piers is worth what it is on the book
Speaker 4: which Anglo has, which is around seven point two billion,
Speaker 4: and given today's diamond market, that's a stretch. And you
Speaker 4: also have to ascribe positive value to Woodsmith the fertilizer
Speaker 4: project up in the north of England, which you know
Speaker 4: many would consider it's still a cost to the business
Speaker 4: and and and probably ascribe very little value. So you know,
Speaker 4: it's a it's a I think it's a it's a
Speaker 4: decent offer, but as you mentioned, it's the deal structure
Speaker 4: that seems to be the roadblock for Anglo American.
Speaker 5: Yeah, and on that end, if I were Anglo American,
Speaker 5: I'm like, no, if you want to buy this company,
Speaker 5: this is the company you guys deal with that afterwards,
Speaker 5: why make us go through you know all the process
Speaker 5: of doing it. I mean, is that kind of where
Speaker 5: Anglo American is right now in term position?
Speaker 4: Well, I think two things. One one is yes, you're right.
Speaker 4: The challenge will be that if if Anglos tries to
Speaker 4: spin off both Amplats and Cumber, there will be some
Speaker 4: shareholders who won't be able to hold it in their portfolios.
Speaker 4: Their mandates just won't allow them. And also they probably
Speaker 4: may not want to own pure play Platinum or iron
Speaker 4: Ore companies. So so you know, if you have a
Speaker 4: lot of force sellers, that puts some of the value
Speaker 4: in question for these two businesses. But I would say, look,
Speaker 4: I mean Angler have kind of opened the door a
Speaker 4: little bit because they've said, well, you know, we will
Speaker 4: spin off Anglo Platinum, we will deal with we are
Speaker 4: going to deal with this issue because you know, we
Speaker 4: think that a slimmer version of the company without Anglo
Speaker 4: Platinum is best for both companies. So they've kind of
Speaker 4: slightly opened up the door in terms of, well, we're
Speaker 4: going to do half of that anyway. So perhaps a
Speaker 4: compromise for BHP would be Tosaka, will you do that
Speaker 4: and we'll deal with CUMBA that that's possibly the next
Speaker 4: sort of compromise that may come out.
Speaker 3: I mean, that's why it's so funny because after BHP
Speaker 3: came out with the first offer, then Angler, to kind
Speaker 3: of fend them off, was like, all.
Speaker 2: Right, right, we will divest a couple of these assets.
Speaker 3: So they're like weirdly giving approval to the deal, but
Speaker 3: also not at this same time, it's very odd taking
Speaker 3: a step back for a second ground.
Speaker 2: Why does BHP want Anglo so badly?
Speaker 4: I think, I think, well, there are two reasons. One,
Speaker 4: I think there is a bit of there. There was
Speaker 4: a bit of opportunism because Anglo share price was relative
Speaker 4: to every every everyone else there will the diversified miners
Speaker 4: was under pressure after they cut production guidance and the
Speaker 4: share price reacted badly on the back of that. So
Speaker 4: there was a there is some opportunism. But if you
Speaker 4: look at the sort of scope and the quality of
Speaker 4: their copper assets, if you look at it on a
Speaker 4: margin basis, just a simple margin basis, their copper business
Speaker 4: actually generates better margins than BHP's overall. Now, in part
Speaker 4: because BHP has Olympic Dam in South Australia, which has
Speaker 4: been a challenging asset for them, But nevertheless, the quality
Speaker 4: is really good and they have a lot of expansion
Speaker 4: options within their copper portfolio. So these are really good
Speaker 4: assets and it would be very difficult to get hold of.
Speaker 4: So I think, you know, it's I can see that
Speaker 4: the attractiveness in the whole copper portfolio for BHP.
Speaker 5: Grant, are you as bullish on copper as.
Speaker 2: The rest of the universe? The rest of the universe.
Speaker 4: Let me put it this way, I think the current
Speaker 4: price has got well away from where we are on
Speaker 4: a fundamental basis, So I think there's a lot of
Speaker 4: speculative interest in the metal. And you know, just as
Speaker 4: a as a very rough gauge, the amount of interest
Speaker 4: I'm getting from from more generalists people I haven't spoken
Speaker 4: to before kind of gives me that rough sense that
Speaker 4: you know, I think we're very very squarely in a
Speaker 4: bull market, but there is a lot of speculative interest
Speaker 4: in the in the metal as well, so you know, yes,
Speaker 4: I can see the long term appeal. I just think
Speaker 4: where we are currently, we're a little bit of drift
Speaker 4: from where fundamentals should suggest the price should be.
Speaker 3: Yeah, that's all cyclical structural thing, right, structural shift We
Speaker 3: need copper for the long term data centers, for the grid,
Speaker 3: for the power industry, for the green transition. But it's
Speaker 3: still cyclical, right, Like it's still going to be about
Speaker 3: China's property sector is not so great, et cetera. How
Speaker 3: do you think this plays out? So Anglo is going
Speaker 3: to talk to BHP until May twenty ninth, what do
Speaker 3: you think happens in these seven days?
Speaker 4: Well, there's got to well, there's got to be a
Speaker 4: bit of movement. I think the interesting thing if you
Speaker 4: if you read the Angler response, there wasn't there wasn't
Speaker 4: you know, it wasn't there that the BHP's bid undervalued
Speaker 4: the company. So all it's all going to well, I
Speaker 4: think it all boils down to the deal structure. Now,
Speaker 4: you know, as I say, BHP is willing to compromise
Speaker 4: on perhaps Cumber, they move closer together, or there's some
Speaker 4: sort of adjustment where bhd's BHP does lift an offer
Speaker 4: in lieu of the fact that there's this risk that
Speaker 4: if they have to sell Cumber or spin it off,
Speaker 4: this this flowback risk. So I think that's that's what
Speaker 4: the discussion point is going to be. You know, it
Speaker 4: depends on how on the willingness of of Anglo and
Speaker 4: what both parties to compromise a little bit more.
Speaker 2: I guess all right, Gram really appreciate it. Thank you
Speaker 2: so much.
Speaker 3: Grants for Bloomberg Intelligence, a global head of metals and mining.
Speaker 2: On the latest, you're.
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Speaker 3: Let's get more on all of those. Jim Bartasha's Bloomberg Intelligence.
Speaker 3: The senior analyst covers retail, staples and packaged food.
Speaker 2: She's joining us, all right, Jennifer, we'll walk us through
Speaker 2: the Target numbers.
Speaker 6: Well, so, when we saw the results today, obviously Target
Speaker 6: missed on profit, which is really one of the catalysts
Speaker 6: behind the stock being down today. But they are very
Speaker 6: optimistic about second quarter and for the rest of the year,
Speaker 6: and so I think there's a little bit of reticence
Speaker 6: about how realistic that is when it comes to second
Speaker 6: quarter in terms of same store sales. You know, Target
Speaker 6: says that they're going to return to profit, like they're
Speaker 6: going to return to growth in second quarter. It's feasible,
Speaker 6: but remember last year second quarter is when they had
Speaker 6: the blowback from all of the boycotts, so they have
Speaker 6: a really easy comparison when you talk about a year
Speaker 6: over year. So that return to growth, yes, but there's
Speaker 6: a caveat around it. That means to me that the
Speaker 6: second half is going to be really important if they're
Speaker 6: going to reach those goals that they put out today.
Speaker 5: Is the Target shopper the same similar, no relation to
Speaker 5: the Walmart shopper.
Speaker 6: Well, historically speaking, the Target shopper has been a slightly
Speaker 6: higher income household. They tend to be a little bit
Speaker 6: more fashion forward, fashion focus type individuals, so there's been overlap.
Speaker 6: But Walmart has slowly been encroaching on what has been
Speaker 6: Target gets kind of main audience, and Target has seen
Speaker 6: that their customers are under a lot of pressure because
Speaker 6: they're sort of middle income households. There's been a lot
Speaker 6: of inflationary pressure, a lot of cutbacks and discretionary spending,
Speaker 6: so there's been kind of pressure from both sides, and
Speaker 6: so Walmart says they're going to up their private label game,
Speaker 6: especially in apparel that could be a threat to Target,
Speaker 6: but it is one of Target's core strengths. So if
Speaker 6: they can get people to come back and start engaging again,
Speaker 6: that's really what historically has helped Target drive their success.
Speaker 3: So reaffirming their guidance for the full year, I mean,
Speaker 3: like you mentioned, that means they're going to have to
Speaker 3: really deliver in the back of what are the levers
Speaker 3: they can pull to do that.
Speaker 6: So from a profit perspective, they have a lot of
Speaker 6: things that are that they've been doing in terms of
Speaker 6: cost control, in terms of streamlining their supply chain. Their
Speaker 6: inventory was down in another seven percent this quarter. Those
Speaker 6: are all great things because it helps make them more
Speaker 6: efficient and cost effective. So from a margin perspective, you know,
Speaker 6: there's still some runway to continue to expand margins. The
Speaker 6: real question is are they going to be able to
Speaker 6: drive sales growth. What's concerning is that the in store
Speaker 6: sales for same store sales are still significantly lower. And
Speaker 6: you know, part of the idea behind the discretionary categories
Speaker 6: is that people come into stores and they browse and
Speaker 6: they find an outfit or they find an accessory. And
Speaker 6: it's great that digital sales are reaccelerating, but if people
Speaker 6: aren't in the store, that's a hard thing for Target
Speaker 6: to deal with.
Speaker 5: Hey, Jen, want to think back to the Walmart releases
Speaker 5: that I've really paid attention to. I always see double digit,
Speaker 5: maybe twenty percent e commerce sales growth. How does Target
Speaker 5: do there?
Speaker 2: Well?
Speaker 6: Target actually does pretty well in terms of digital sales growth,
Speaker 6: but there's a very different strategy. Walmart is pursuing a
Speaker 6: strategy of as many possible items as possible on the
Speaker 6: Walmart dot com. They do a lot of third party sales.
Speaker 6: When it comes to Target, they're broader shurtment is much
Speaker 6: more curated, and so they are very thoughtful about which
Speaker 6: vendors they bring onto the Target dot com to enhance
Speaker 6: the offering that Target has. So it's it's there's there're
Speaker 6: different different approaches to e commerce. Both are seeing some success,
Speaker 6: but you can't really compare them, you know, strictly side
Speaker 6: by side.
Speaker 3: What other company, Like, what did you make of then TJX,
Speaker 3: for example, because in some ways they can be immune
Speaker 3: from the slowdown, right because everyone me included will go shop.
Speaker 3: There are we seeing that reflected in the numbers?
Speaker 6: Yeah, I mean, I think the strong results from TJX
Speaker 6: today just underscore that people still like the treasure Hunt,
Speaker 6: but people are seeking value. And one of the things
Speaker 6: that Target talked about today is that they need to
Speaker 6: reinforce that value proposition. That's part of why they've rejiggered
Speaker 6: their entire Target loyalty program with Target Circle TJX. Everybody
Speaker 6: knows you can go and you have the potential to
Speaker 6: find something that is an amazing deal, and that's enough
Speaker 6: to draw people into stores. Target has has gotten a
Speaker 6: little bit away from that.
Speaker 2: Yeah, yeah, see paulism.
Speaker 3: So Paul's never been in a TJX, so I don't
Speaker 3: think he truly understands the beauty of this.
Speaker 5: I went to my first Walmart last weekend. You didn't, Yeah,
Speaker 5: I'm having.
Speaker 3: So that's like a semi gold star. So they have
Speaker 3: not only just discounted stuff, but they have the runway
Speaker 3: and that's the jam. That is designer stuff on some
Speaker 3: serious sale and you can get that on clearance and
Speaker 3: you're looking at like a ninety percent off a designer
Speaker 3: kind of situation.
Speaker 5: Do you know beforehanded whether it's going to be there?
Speaker 2: No, that's that's that's fun.
Speaker 3: Then you add the treasure hunt and you don't know
Speaker 3: the beauty that will be unveiled as you go in.
Speaker 2: Am I selling this appropriately?
Speaker 3: Jen?
Speaker 6: Absolutely? I mean that is that is some of the appeal.
Speaker 6: You just you never know what you're gonna find, and
Speaker 6: so you go as often as you as you can
Speaker 6: because there's a chance you'll find that amazing deal.
Speaker 5: What's the promotional environment out there, Jenner. Are the Walmarts,
Speaker 5: the tjx's, the targets. Are they putting out a lot
Speaker 5: of promotions to get people in this show store or
Speaker 5: to click that button?
Speaker 6: Yeah, there's the promotional environment has been escalating, and so
Speaker 6: we talk you hear Walmart talk about rollbacks that's basically
Speaker 6: putting things on sale or discounts. Target talked about cutting
Speaker 6: prices on by the end of the summer up to
Speaker 6: five thousand items, all for essential So the idea is
Speaker 6: to try to advertise that there's value proposition there and
Speaker 6: you know in force that they're they're looking at for
Speaker 6: the customer, trying to get people to engage in in
Speaker 6: coming back and perhaps buying a little bit more. And
Speaker 6: let's be honest, it doesn't hurt from a public relations
Speaker 6: perspective when you have the White House talking about retailers
Speaker 6: not being responsible enough and rolling back costs on essentials.
Speaker 6: So there's certainly a little bit of a play there
Speaker 6: to help appease some of that political pressure.
Speaker 2: Is but that doesn't make me want to buy the
Speaker 2: stock though.
Speaker 6: No, But but it does, but it does help it,
Speaker 6: you know, it does help ultimately from a consumer perspective.
Speaker 6: If you're if you if you think that it's a
Speaker 6: better value to shop there, or that you're getting more
Speaker 6: for your money, you're more inclined to shop there, and
Speaker 6: that ultimately leads to your traffic and your sales, and
Speaker 6: that is what is appealing to investors.
Speaker 7: What are the.
Speaker 5: Dollar stores seeing these days? Are they seeing a pickup
Speaker 5: in traffic? Maybe people trading down from a Walmart or Target.
Speaker 6: There's been some trade down into the dollar stores, and
Speaker 6: we tend to see that every time we go through
Speaker 6: sort of an economic depression. But one of the challenges
Speaker 6: for the dollar stores is that people are coming in,
Speaker 6: but they've abandoned the discretionary spending, even though at a
Speaker 6: dollar store the discretionary spending is not that expensive, so
Speaker 6: their consumables mix. For example, a Dollar General is close
Speaker 6: to eighty percent of their sales are what we could
Speaker 6: be considered consumable items. That is good in terms of
Speaker 6: people coming into the store, but it's not great for
Speaker 6: the long term mix for the company because those are
Speaker 6: very low margin sales. They're high frequency, but people have
Speaker 6: been really watching those, you know, watching their wallets, and
Speaker 6: so the basket sizes are a little smaller. The mix
Speaker 6: is more just you know, more consumable. So we'll be
Speaker 6: watching for any signs that they're getting some hiring, hiring
Speaker 6: come households coming in to spend on those more discretionary items,
Speaker 6: or that the their their core consumers are loosening spending
Speaker 6: a little bit. But honestly, this quarter is probably not
Speaker 6: going to be you know, panning out.
Speaker 2: No, definitely not.
Speaker 3: I'm target falling the most I should say, going back
Speaker 3: to Target, the mostion is November of twenty twenty two.
Speaker 3: Does that feel extreme to you, considering that the actual
Speaker 3: numbers weren't like terrible terrible?
Speaker 6: I think the I think there's a you shouldn't dis
Speaker 6: Target for being Target. I guess this is my response
Speaker 6: to that. And what I mean, like, what I mean
Speaker 6: by that is, you know, Target has always been about
Speaker 6: the fashion, It's been about the discretionary categories. It's been
Speaker 6: about home decoor, it's been about things you know, of
Speaker 6: that nature. They've never tried to be, you know, heavy
Speaker 6: on the essentials category. And so when you've got consumer
Speaker 6: weakness and you've got people who aren't spending in those categories,
Speaker 6: it's hard to beat up Target for being true to
Speaker 6: what their values are. And so you know, you know
Speaker 6: what I would say is, you know, if we see
Speaker 6: some improvement in just the discretionary spending, Target will start
Speaker 6: to take off again. You know, their sales will accelerate,
Speaker 6: people will be coming back. It's it seems more of
Speaker 6: a waiting game for when the consumer is ready for
Speaker 6: that at this point.
Speaker 2: All right, Jen, thanks a lot. We think you're just awesome.
Speaker 2: Thanks so much.
Speaker 3: Jim Bartasha's Bloomberg Intelligence senior retail, staples and packaged food
Speaker 3: analysts Paul, So, can you go to a TJX or
Speaker 3: like a target sometimes, like we just do like one every.
Speaker 5: Month space a little bit? Is there stuff for dudes
Speaker 5: in TJX or? Okay?
Speaker 2: Yeah, I mean no, I mean you're definitely gonna hate it,
Speaker 2: like this is not made.
Speaker 3: For you, but here, but go anyway, channel check.
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Speaker 2: Let's just be totally clear here.
Speaker 3: Nothing's going to matter until today when Nvidia comes out
Speaker 3: after the closing bill, and then when Future's open later
Speaker 3: on that night.
Speaker 2: That's when we're going to see the action. Okay, let's
Speaker 2: just be all to be clear.
Speaker 5: On Uportunately, we have cow Master Tim Sentovik. They'll be
Speaker 5: breaking it down on Bloomberg Radio.
Speaker 2: That's right, so we'll have that.
Speaker 3: Sylvia Jablonski is chief executive officer and chief investment officer
Speaker 3: over it Defiance ETFs.
Speaker 2: She joins us.
Speaker 3: Now, Hey, Sylvia, how how will Nvidia move the market?
Speaker 3: I know that's such a silly question, but in reality,
Speaker 3: what is its potential to move after hours?
Speaker 8: Good morning, Alex, great to see you.
Speaker 9: You know, I think it certainly has a huge, huge
Speaker 9: impact on how markets move, and we'll have a huge
Speaker 9: impact on markets move on how markets move based on
Speaker 9: what we hear after ours.
Speaker 8: You know, I just like, look back over the couple
Speaker 8: of years.
Speaker 9: I feel like, when you know, we had the tech
Speaker 9: recession in twenty twenty two, Apple was kind of the
Speaker 9: darling that was holding up amongst the others. And then
Speaker 9: you know, last year everything kind of rebounded and then
Speaker 9: the story was you know, Tesla for a while until
Speaker 9: it started to crash, and then it quickly transitioned over
Speaker 9: to chat ChiPT and you know Microsoft and the video
Speaker 9: now and so the video is the.
Speaker 8: Start of the show this year, and whatever Jens M.
Speaker 9: Wong says is going to dictate whether or not we have,
Speaker 9: you know, a rally at.
Speaker 8: Least in the short term, or pull back in the
Speaker 8: short term.
Speaker 9: I don't think, you know, I don't think that the
Speaker 9: result anyone thinks the results are going to be devastating, right,
Speaker 9: and the stock does tend to move around earnings, but
Speaker 9: you know, the future outlook here is great either way.
Speaker 5: Hey, so be one of the many reasons we like
Speaker 5: chatting with you as we get a good feel for
Speaker 5: what's happening in the ETF space. Are we seeing We're
Speaker 5: seeing some big moves in a commodity space, whether it's
Speaker 5: gold or copper or chocolate. You know, are you seeing
Speaker 5: that in the flows in your ETFs.
Speaker 8: Yeah, we're you know, we're seeing that.
Speaker 9: So we actually we actually have a couple of ETFs
Speaker 9: that are you know, that are focused on things like
Speaker 9: hydrogen and things like that, but just generally in terms
Speaker 9: of the market and in terms of where we think
Speaker 9: the puck is going, you know, there's just so much
Speaker 9: interest right now in uranium and in copper uranium.
Speaker 8: You have the story of.
Speaker 9: The sanctions on Russia, you have this global commitment to
Speaker 9: go carbon neutral or try to go carbon neutral, you know,
Speaker 9: the different climate energy committees committed to that, to using
Speaker 9: nuclear power by twenty fifty to go you know, kind
Speaker 9: of completely green. And it's in such short supply right now.
Speaker 9: So the amount of just growth and performance that we
Speaker 9: see in uranium is absolutely you know, startling at the moment.
Speaker 9: And then I think another one is copper. And we're
Speaker 9: talking about Navidia tonight. Well, in order for Navidia and
Speaker 9: all of these companies to run their data centers and
Speaker 9: continue to do you know, supercompute and quantum computing and
Speaker 9: processing this data and actually just managing the heat that
Speaker 9: these computers give off, you need copper. So copper is
Speaker 9: you know, one of the most excellent conductors of electricity.
Speaker 9: It's efficient in terms of its ability to absorb heat
Speaker 9: better and you know kind of run things more efficiently,
Speaker 9: and so the need for copper is very much on
Speaker 9: the rise around this navidia Ai story.
Speaker 3: I love that you mentioned that, and I also well,
Speaker 3: I love that Paul mentioned that and then you talked
Speaker 3: about it. I also wonder if you're seeing something similar,
Speaker 3: say with utilities and utility ETFs, because as you pointed out,
Speaker 3: you need copper for all these data centers, but you
Speaker 3: also need energy. And we've seen utilities really outperform this year,
Speaker 3: and that's usually defensive trade, but I'm considering if it's
Speaker 3: actually a growth trade at this point. And I'm wondering
Speaker 3: what you're noticing in terms of flows.
Speaker 9: Yeah, I've been thinking a lot about that too, actually,
Speaker 9: And then to pile on top of that, you know,
Speaker 9: the energy needed, the different you know, kind of utilities
Speaker 9: needed to like then we kind of like forget about
Speaker 9: the nuts and bolts because they tend to be a
Speaker 9: little more boring than you know, the semiconductors that are
Speaker 9: making robots and doing all these things. But you need
Speaker 9: them to essentially on all of these innovations, but on
Speaker 9: top of that, I would pile on things like tech
Speaker 9: and connectivity, right, things like five G and then like
Speaker 9: six G the next generation of telecommunications.
Speaker 8: You know, you need companies like T Mobile and AT.
Speaker 9: And T and you know Crown Castle and like these
Speaker 9: these these cell towers that are in the middle of
Speaker 9: the country helping to foster low latency, foster smart.
Speaker 8: Cities and communications.
Speaker 9: Because you can create all of these you know, high
Speaker 9: tech types of devices and machines and data, but but
Speaker 9: they actually have to flow through to wherever they're supposed
Speaker 9: to go, and so you need kind of like the
Speaker 9: old school telecommunications for that too. So I think that's
Speaker 9: how you broughten out the AI trade. Right, Like, if
Speaker 9: if you have Fomo from Navidia, look to that stuff,
Speaker 9: look to the utilities, look to the copper, look to
Speaker 9: the the five G stuff. You know, that's where the
Speaker 9: opportunities still lie.
Speaker 5: So but and you've I think you've been pretty consistent
Speaker 5: Sylvia that you like the stocks in the in that
Speaker 5: tech space, whether it's you know, yeah, is that still
Speaker 5: the case, or you concerned that maybe, I don't know,
Speaker 5: valuations they might be a little bit stretched, or how
Speaker 5: do you think about those big tech names these days?
Speaker 9: So I remind myself every time I feel like a
Speaker 9: tech stock has gotten too high to buy and I'm
Speaker 9: looking at like a three to four percent pullback, and
Speaker 9: I'm thinking about, you know, whether or not I should
Speaker 9: dive in because of where evaluations are. I start running data, right,
Speaker 9: I start running like the last forty years, last thirty years,
Speaker 9: the last twenty years, the last ten years. And if
Speaker 9: you just run the NASDAK performance as compared to anything
Speaker 9: like broad based s and P five hundred, you know,
Speaker 9: russell doubt whatever it is, the performance is like is
Speaker 9: like twice over a decade, twice out of the SMP
Speaker 9: over twenty years, twice out of the SMP and so on.
Speaker 9: And you know what leads the Nasdaq, it's tech, right.
Speaker 9: So I just think that over time, in terms of
Speaker 9: our ability to actually experience continued GDP growth, to actually
Speaker 9: experience innovation and you know, make up for population issues,
Speaker 9: the job worker demand issues, all of these things, you
Speaker 9: need technology. So I just don't think it's going away.
Speaker 9: And you know, if you look at things and what
Speaker 9: they're doing, I mean they're growing to their valuations.
Speaker 3: You also talk about if you look at stocks in
Speaker 3: this space, you look at io n Q, I have
Speaker 3: no idea what that is.
Speaker 9: Yeah, so that's a quantum compute. That's a quantum computing company.
Speaker 9: And then again this is on my thesis of so
Speaker 9: we have AI. We're so excited about AI, and like, gosh,
Speaker 9: don't you wish you held in the video and Microsoft
Speaker 9: the day before you know, the chat cheapt you know,
Speaker 9: mania hit the market, let's call it.
Speaker 8: So I think that's where we are with quantum computing.
Speaker 8: I think that that's going to be the next mania
Speaker 8: that hits the market because people are starting to realize
Speaker 8: that you have all of this. What does AI need.
Speaker 9: In order to work? AI needs data and it needs
Speaker 9: data that's correct. It needs data that's efficient. It needs
Speaker 9: data that runs in two different you know, parallels and
Speaker 9: parameters versus you know, a binary state, which is what
Speaker 9: the computers we have do. Now you need supercomputers and
Speaker 9: quantum computers. And then companies like ion Q they do
Speaker 9: just that, right, They they run data, they run simulations
Speaker 9: in two different states at the same time. And so
Speaker 9: I think that that's necessary for AI to ever be
Speaker 9: you know, really tangible and impact like all the different
Speaker 9: sectors out their healthcare, financials, you know, banks, aerospace and
Speaker 9: defense and all that.
Speaker 8: You have to compute this data.
Speaker 5: Hey, Sylvia, if you're tech exposure here, how concerned are
Speaker 5: you about maybe an interest rate environment which is I
Speaker 5: guess maybe a little bit higher for a little bit longer.
Speaker 8: You know, it's there.
Speaker 9: I would say I was a lot more concerned about
Speaker 9: it a couple of you know, like like a couple
Speaker 9: of months ago. But it does look like in facial
Speaker 9: inflation is continuing to trend downward. I don't think, you know,
Speaker 9: the feed is pretty clear on the fact that they're
Speaker 9: not looking to raise rates if it's higher for a
Speaker 9: little bit longer. I mean, it's just it's not feeding
Speaker 9: into their earnings. I think it impacts when we think
Speaker 9: about tech. I think it definitely impacts the companies you
Speaker 9: know that Alex just asks about like ion Q that
Speaker 9: that are a little bit smaller, they have higher debt
Speaker 9: levels to service and things like that. But you know,
Speaker 9: or even like the Tesla's right that that are that
Speaker 9: you know have kind of like high levels of debt
Speaker 9: and innovation and whatnot around their AI and the EV's
Speaker 9: and all that. But I think the large cap companies
Speaker 9: like Microsoft, Google, it's just been much to do about
Speaker 9: nothing for them. You know, they keep performing, they're doing buybacks,
Speaker 9: that earnings are up offits are supposed to be up
Speaker 9: twelve to thirteen percent in coming years.
Speaker 8: So I'm not that worried about it.
Speaker 9: Of course, you know, if it turns the other way,
Speaker 9: then you know, of course it matters.
Speaker 8: Right, we're gonna get a pull.
Speaker 2: Back, Sylvia, So good to catch up.
Speaker 3: Love chatting with you, Sylvia Deablonski, CEO and CIO of
Speaker 3: Defiance ETFs.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 1: Just Say Alexa playing Bloomberg eleven thirty Well.
Speaker 5: Bloomberg periodically does a poll, a political poll with Morning
Speaker 5: Console than the latest poll is available, and according to
Speaker 5: the Pole, half of swing state voters say they're worried
Speaker 5: about violence surrounding the US presidential election, and many swing
Speaker 5: state voters also say they're worried about about the growing
Speaker 5: number or growing presidence of artificial intelligence, and that it
Speaker 5: could one day diminish privacy and hurt job prospects. So
Speaker 5: let's get some more color on this. Jody Schneider joins us.
Speaker 5: She's a political news director for Bloomberg Television Radio. She
Speaker 5: joins us in Washington, d C. Jody, I don't think
Speaker 5: we've ever had this whole concern about violence surrounding an
Speaker 5: election before, but I guess post January sixth, it's a thing.
Speaker 2: Yeah, it is.
Speaker 10: And we asked specifically about this because we've been doing
Speaker 10: this poll now since last fall, as you know, Paul,
Speaker 10: and we've been asking about the candidates themselves, and we
Speaker 10: continued to ask about that, but we wanted to ask
Speaker 10: on some issues as well, and this seemed to be
Speaker 10: one that's percolating out there quite a bit that we
Speaker 10: hear a lot from, and so we went and asked
Speaker 10: the voters themselves, as the you in these swing states,
Speaker 10: in these seven swing states, and as you noted, about
Speaker 10: half say they are concerned about that, and it seems
Speaker 10: to be pretty evenly split between Republicans and Democrats in
Speaker 10: terms of that concern.
Speaker 2: So that's real and that.
Speaker 10: Could affect them in terms of how they vote, perhaps
Speaker 10: whether they vote, because both parties really need a big turnout.
Speaker 10: It's going to be, as everyone expects, a close election,
Speaker 10: close in terms of the popular vote, and of course
Speaker 10: that affects the electoral college, which is where it comes
Speaker 10: down to, where the rubber meets the vote.
Speaker 2: If you will, Jody does the fear sway how people
Speaker 2: are going to vote.
Speaker 10: Well, I think it more could affect whether they vote, Alex.
Speaker 10: I really think that's part of it. If you fear that,
Speaker 10: you know, perhaps there's going to be violence surrounding this,
Speaker 10: or there's this kind of fear about things, maybe you say.
Speaker 10: And we've seen a lot of polling around the fact
Speaker 10: that there isn't a lot of excitement around either candidate.
Speaker 10: We had at one point polls showing that which there
Speaker 10: was someone other than Biden or Trump. But this is
Speaker 10: who we have. This is who's going to be on
Speaker 10: the ballots, and so I think it's more going to
Speaker 10: be a turnout issue. We'll see now. Of course, we
Speaker 10: do this pulling and we all talk about polls a
Speaker 10: great deal in an election year like this, but it's
Speaker 10: still it's still about five and a half months out
Speaker 10: before the election. And a lot of people don't make
Speaker 10: up their minds fully until after Labor Day, so this
Speaker 10: is still this is an issue that could affect voting,
Speaker 10: but we still have plenty of time before people actually
Speaker 10: start voting.
Speaker 5: So Jody, aside from these issues, what are kind of
Speaker 5: the key issues that are polling has kind of illuminated
Speaker 5: are kind of going to be the key issues for
Speaker 5: these candidates through the election.
Speaker 10: Yeah, so the race is narrowing according to Again, these
Speaker 10: are seven swing states where we think, you know, a
Speaker 10: lot of the election will be determined, and we found
Speaker 10: that six and ten of the voters worry about misinformation,
Speaker 10: not only violence, but misinformation. Forty six percent I had
Speaker 10: concerns about perhaps foreign interference in the election. So that's
Speaker 10: an interesting take. We've seen former President Trump's swing state
Speaker 10: lead dipping slightly. He is still ahead in many of
Speaker 10: these swing states according to our poll, but it has
Speaker 10: dipped slightly since the last time we pulled about a
Speaker 10: month ago. So that could be viewed as a little
Speaker 10: bit of encouraging news for those who support Biden, but
Speaker 10: those who support Trump say, well, he's still ahead there,
Speaker 10: So we have that. We also have that Biden gaining
Speaker 10: ground from April in each of the competitive sun Belt states.
Speaker 10: So that's an interesting factor that he's gaining there. The
Speaker 10: states where he needs to win, he absolutely must win
Speaker 10: what we're calling those blue wall states of Wisconsin, Pennsylvania, Michigan,
Speaker 10: which he won last time, which Hillary Clinton famously did
Speaker 10: not win in her race against Donald Trump. We're finding
Speaker 10: that he is doing a little bit better there. They're
Speaker 10: separated by no more than two percentage points in those
Speaker 10: blue wall states, so very close there, Judy.
Speaker 3: When you talked about misinformation, how do voters then, what
Speaker 3: do we have an idea where voters are going to
Speaker 3: get their information if they're worried about misinformation, Well.
Speaker 10: That's a really good question, Alex and so many of
Speaker 10: them talk about misinformation, but then they go to places
Speaker 10: where they are, you know, where there's potentially misinformation, and
Speaker 10: a lot of voters are getting their news from a
Speaker 10: lot of places that we don't necessarily consider traditional news outlets.
Speaker 10: So it's an interesting question. We did ask about TikTok.
Speaker 10: That's been a big issue the US government has under
Speaker 10: legislation that was passed emergency funding for Ukraine and other
Speaker 10: places in the world. It was in there a ban
Speaker 10: on TikTok if the Chinese parent by dance does not
Speaker 10: sell it. We asked whether we asked these swing state
Speaker 10: voters whether they thought it was a good idea to
Speaker 10: ban TikTok, and almost half said they thought it was.
Speaker 10: So another interesting wrinkle there in terms of information.
Speaker 5: Jody, what is the polling demonstrated about, if anything, about
Speaker 5: voters feelings about former President Donald Trump? And I guess
Speaker 5: the current trial that he's dealing with, as well as
Speaker 5: the other legal challenges for the former president.
Speaker 10: Yeah, so we saw that about one thousand respondents mentioned
Speaker 10: or alluded to that trial in comments given to us
Speaker 10: as part of the poll, which shows that they're aware
Speaker 10: of it. They know that it's happening. We didn't ask
Speaker 10: a specific question. In the past, we had asked if
Speaker 10: he was to be convicted of a crime, would that
Speaker 10: affect their decision to vote for him, and that did
Speaker 10: poll quite high. We didn't ask that specific question now,
Speaker 10: we asked about their knowledge of this, and again many
Speaker 10: people knew this was happening. So that will you know.
Speaker 10: We will know in the next few weeks whether he
Speaker 10: will be convicted or not in the New York case,
Speaker 10: and that will be something interesting to see in further polls,
Speaker 10: whether his either being acquitted or found guilty. There is
Speaker 10: something that could affect voters perceptions going into the noveper election.
Speaker 3: We may not know this, but is anyone going to
Speaker 3: watch the debates to really get a sense of who
Speaker 3: they want to vote for? I just I'm so struck
Speaker 3: by undecided because both of these individuals have been president before.
Speaker 3: I mean, usually the debates are for people that nobody knows,
Speaker 3: like a governor of a state that we're going to
Speaker 3: have to get to know on a global stage and
Speaker 3: a federal stage.
Speaker 10: What do you think, Yeah, I'm always amazed to you know,
Speaker 10: these both these people, I mean, have had so much
Speaker 10: coverage for so long. How could anybody in America not
Speaker 10: have an opinion about them? Right? But at the same time,
Speaker 10: people watch the debates both to really to double down
Speaker 10: in some ways on their opinion. If they feel that,
Speaker 10: you know, they're very much for Donald Trump and they
Speaker 10: see him in the debate and they like him, they say, okay, good,
Speaker 10: that really validates my decision to vote for him. Or
Speaker 10: on the other hand, if they're looking, you know, to
Speaker 10: see whether somebody the person that they don't think they
Speaker 10: want to vote for, but they do particularly well that night,
Speaker 10: that may you know, that could sway their opinion. It's
Speaker 10: a perception kind of thing, but it matters. We found
Speaker 10: out that debates do matter a great deal to how
Speaker 10: the elector perceives the candidates. This will be a very
Speaker 10: early debate happening in June. We haven't seen this in
Speaker 10: cycles lately, so that may that may tell us something
Speaker 10: about people's willingness.
Speaker 9: To go out and vote.
Speaker 5: All right, Jody, thank you so uch for joining us.
Speaker 5: Really appreciate getting some of your time. Jody Schneider, political
Speaker 5: news director for Bloomberg Television and Radio, joining us from Washington,
Speaker 5: d C. And another question, I was kind of like,
Speaker 5: are the anybody can pay attention to the conventions in
Speaker 5: the summer. Yeah, I mean, I think probably just because
Speaker 5: there might that might be a place where if there's
Speaker 5: violence and may be there. We certainly saw it in
Speaker 5: the past conventions. So I'll be interest to see how
Speaker 5: much people pay attention to the conventions. Yeah, so we
Speaker 5: already know we did, We already know who the candidates are.
Speaker 2: Yep.
Speaker 3: And also particularly I think there was a swing state
Speaker 3: now swing state, but primary where Nikki Hilly got votes
Speaker 3: like twenty two percent of the voter or something, even
Speaker 3: though she wasn't actually running anymore.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 1: Say Alexa playing Bloomberg eleven thirty.
Speaker 3: All right, thank you so much, John Tucker, Malex Steel
Speaker 3: alongside Paul swe Need this a Bloomberg Intelligence Radio. Some
Speaker 3: breaking news over in the UK SOS according to BBC,
Speaker 3: but a UK general election will now be held on
Speaker 3: July fourth. The backdrop for this is that in local
Speaker 3: elections and also in polling the Labor Party has been
Speaker 3: gaining a lot. When it comes to say the Conservative Party,
Speaker 3: which is currently in power with the Prime Minister Rashi Sunak.
Speaker 3: Now you can make an argument it's hard to govern
Speaker 3: if the opinion polls show you so much out of favor. Also,
Speaker 3: inflation has been high, although it's come down a little
Speaker 3: bit today to two point three percent was the latest read.
Speaker 3: Growth has been sort of stagnant. We're waiting for the
Speaker 3: Bank of England to cut as well, so there was
Speaker 3: an expectation that Rishisunac would call for early elections. He
Speaker 3: hinted it would be in the back half of this year,
Speaker 3: which could kick off as much as July. The theory
Speaker 3: was that he would wait until the fall, which was
Speaker 3: when we'd see prices actually come down in terms of inflation.
Speaker 3: But it looks like he decided he was going to
Speaker 3: ramp it up a July election, and also coincides with
Speaker 3: get this the first flight of asylum seekers that are
Speaker 3: being sent to Rwanda. This is a very controversial proposal
Speaker 3: that he touted, allowing the Tories to make their migration
Speaker 3: clamp down a core focus of the campaign versus say,
Speaker 3: maybe inflation.
Speaker 2: Anyway, that was the best thing. That's all I got.
Speaker 2: That's great. So let's go somebody who knows a little
Speaker 2: bit more, shall we, Yeah, let's do this week.
Speaker 5: Got the James Wilcock. He's just going to join us here,
Speaker 5: his Bloomberg Radio senior producer in London. I guess James
Speaker 5: just reading some of the top live stuff here. A
Speaker 5: little bit of surprise as to the timing. What do
Speaker 5: you know over there in London?
Speaker 7: I mean your guest is as good as ours, and
Speaker 7: that you're right to point out the flights to Rwanda.
Speaker 7: There are also kind of negative sides to that too,
Speaker 7: in that summer is normally a very good time for
Speaker 7: boats to start crossing over from France to the UK,
Speaker 7: so it could be a sort of negative sign there.
Speaker 7: In some ways, this is a major gamble for SOA.
Speaker 7: He is basically saying that's two point three percent inflation
Speaker 7: CPI headline that he's coming out and say could be
Speaker 7: the best he's going to get, and he wants to
Speaker 7: call it thatction gets any work. You've also sort of
Speaker 7: bear in mind that in the past months two Conservative
Speaker 7: MPs our lawmakers here in Parliament have defected to the
Speaker 7: Labor Party. In many ways, the sources I've been talking
Speaker 7: today says a summer election speaks more to fears things
Speaker 7: get worse rather than the hope it gets better. And
Speaker 7: for Labor today, in some ways this has been an
Speaker 7: outcome they've been looking forward to. They've been saying they
Speaker 7: want an election. They are more than twenty points ahead
Speaker 7: in the polls, and a recent local council election show
Speaker 7: that that seems relatively solid. So there are a lot
Speaker 7: of questions today inside his own party about why he's
Speaker 7: called this so early.
Speaker 3: Well to that point, and this is like for the
Speaker 3: people over here in the in the in the US,
Speaker 3: why would he call an election at all? Like here
Speaker 3: we are pulling all the time. You know, people like
Speaker 3: a president, they don't. No one cares. Every four years, boom,
Speaker 3: you get to vote, that's it. How does it work
Speaker 3: over in the UK?
Speaker 7: So, I mean you guys have the quirk where you
Speaker 7: know that that November it's been coming for a very
Speaker 7: long time and it's all in your calendars and you've
Speaker 7: all been able to book summer holidays. I don't have
Speaker 7: that joy in the UK. The way the rules work
Speaker 7: is you have until five years. So the soon as
Speaker 7: you get elected, you have five years until the clock
Speaker 7: is up and you have to leave. That deadline is
Speaker 7: January twenty twenty five here, and so it is getting
Speaker 7: closer and closer. And so the UK government and the
Speaker 7: Prime Minister holds this power effectively. He can pick when
Speaker 7: he thinks is best. But what has happened to Sunacu
Speaker 7: is the longer and longer that goes on as he
Speaker 7: waits for that best moment, the weaker and weaker, he looks,
Speaker 7: and then he asked like, is this a prime minister
Speaker 7: who never has that best moment? And so calling it
Speaker 7: now is also his way of trying to say, you know,
Speaker 7: I still have the power over the situation. Famously, Gordon Brown,
Speaker 7: lib At Prime minister back in twenty ten, who lost
Speaker 7: his sort of seat as Prime minister, didn't call it.
Speaker 7: He bottled it in about two thousand and eight, and
Speaker 7: he was famously called week in the election campaign that
Speaker 7: followed two years later because he had his moment when
Speaker 7: he could maybe have turned it all around and he
Speaker 7: didn't do it. So to your question, Sinnak is choosing
Speaker 7: to make this gamble now. Whether he will succeed as
Speaker 7: now anyone's guest. But it is worth saying that in
Speaker 7: most recent political history, in the past forty years, overcoming
Speaker 7: the pole lead that Labor his opposition party have hasn't
Speaker 7: been done.
Speaker 5: Do we know who the Labor Party will put up
Speaker 5: against mister Sunak.
Speaker 7: Yeah, we do so. The Labor opposition leader Kiss Starmer,
Speaker 7: he's been in power over in the Labor Party for
Speaker 7: since about twenty twenty, and the Labor oppoition needer to
Speaker 7: the person who will run against him. Kir is increasingly
Speaker 7: well known in the UK. He is putting for quite
Speaker 7: a centrist platform in comparison to the previous Labor leader
Speaker 7: back in twenty nineteen, Jeremy Corbyn, who was very left
Speaker 7: wing by UK standards, and what Kir Starmer is running
Speaker 7: on is but he put out an election pledge card
Speaker 7: last week. That's how much speculation has been going in
Speaker 7: the UK building up to this. He said his six
Speaker 7: first steps would be and don't test me here, but
Speaker 7: stabilizing the economy, reforming the UK health service, protecting the borders,
Speaker 7: cracking down on crime, and as well as that, he's
Speaker 7: also looking to reform education. And I think I've been
Speaker 7: five The sixth one eludes to me, but broadly that
Speaker 7: is going to be his platform for Sunak. This election
Speaker 7: is all about the economy. But both sides here have
Speaker 7: a story to tell about the economy.
Speaker 4: I am.
Speaker 3: We're learning now from other news outlets that Richie Sunak,
Speaker 3: Prime Minister of UK, will make a statement in Downing
Speaker 3: Street at about five pm so US time, that's about
Speaker 3: thirteen minutes time, James.
Speaker 2: Why are people.
Speaker 3: So unhappy with the Tory Party, with the Conservative Party
Speaker 3: right now.
Speaker 7: That is a complex question. I mean to answer it,
Speaker 7: I have to go back into recent history. There in
Speaker 7: the past like three years, have been four different Conservative
Speaker 7: prime ministers and when you look at that, that has
Speaker 7: become a hallmark of a difficult leadership. Inflation, like in
Speaker 7: the US has hit double digits and has only recently
Speaker 7: come down two point three percent today. And combine that
Speaker 7: with sluggish GDP growth, a very difficult leading of the
Speaker 7: European Union and the Conservative Party have also been in
Speaker 7: power for fourteen years and part of this is just
Speaker 7: a kind of political exhaustion. Add all that together and
Speaker 7: many people here are looking for something different. And it
Speaker 7: is worth saying although the Conservative Party are beneath Labor Party,
Speaker 7: the Labor Party the main opposition in the polls, it
Speaker 7: has yet to be demonstrated there is a real enthusiasm
Speaker 7: for Labor either. There is just kind of this real
Speaker 7: exhaustion with the current plittal options in Britain.
Speaker 5: Just real quickly for us here at this flight to Rwanda,
Speaker 5: these people who are they do they want to go
Speaker 5: to Rwanda? Or are they being no kicked out?
Speaker 7: They're being kicked out. So in the same way, I
Speaker 7: think the parallel for you guys is people crossing the
Speaker 7: border from Mexico. In the UK. Our form of illegal
Speaker 7: migration comes across seeing this channel from the border with France,
Speaker 7: and so migration has been a core issue, a contentious
Speaker 7: issue in UK policy four years now and Rishi's big
Speaker 7: gambit has been to say that we will consider breaking
Speaker 7: international law and we will deport anyone we catch illegally
Speaker 7: and send them to a Randa to be processed as
Speaker 7: asylum seekers and then if that processing is legal, they
Speaker 7: will then be come back to the UK and if
Speaker 7: it is illegal, they will be then fant of dem miranda.
Speaker 7: This has been an extremely controversial policy which many experts
Speaker 7: say may not even work. It would deport maybe one
Speaker 7: percent of those who enter the UK league illegally according
Speaker 7: to the sort of think tanks to look at this
Speaker 7: migration stats and it is basically the idea being it
Speaker 7: would deter the conservative say, anyone from wanting to cross.
Speaker 5: But that's the just for time appreciated. James Walkaki is
Speaker 5: the senior producer for Bloomberg Radio over in London. Give
Speaker 5: us the latest reporting on elections coming.
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