Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim
Speaker 1: Fox along with my co host Lisa Abramowitz. Each day
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Speaker 1: Podcast on iTunes, SoundCloud and at Bloomberg dot com. I
Speaker 1: want to prepare for what is ahead in the oil industry.
Speaker 1: I get confused looking at all the inputs in similar
Speaker 1: argument for iron Ore that perhaps the rally has gone
Speaker 1: on too long, has been made for the oil industry,
Speaker 1: that perhaps oil prices have gotten too high and are
Speaker 1: due for a fall. I want to bring in Libby
Speaker 1: two does, a partner and portfolio manager at Cushing Asset
Speaker 1: Management UH to talk a little bit about what we
Speaker 1: should be paying attention to with respect to oil. So, Libby,
Speaker 1: there is so much going on from the political angle,
Speaker 1: where you've got President Trump, who does seem to be
Speaker 1: supportive of fossil fuels, but then policy changes that could
Speaker 1: prove to be challenging frankly for some of the big
Speaker 1: energy companies that do business in the Middle East. What
Speaker 1: are you focusing on to determine the course ahead. Yeah,
Speaker 1: I think when you look at the crude oil, just
Speaker 1: like any other commodity, there are three main things supply, demand,
Speaker 1: in inventories, and right now we have several things that
Speaker 1: are impacting that. We have rig counts that of course
Speaker 1: impacts supply. Those are going up, so the fear of overproduction,
Speaker 1: we've got that happening. We've got potential import tax on
Speaker 1: crude oil, which again that'll affect the big integrated companies,
Speaker 1: but there are a lot of smaller domestic independent E
Speaker 1: and P companies that that won't affect refiners. They could
Speaker 1: potentially be hurt, but it depends on the details of
Speaker 1: the tax, so you really have to dig into the details.
Speaker 1: But if you take a step back, Trump centered policy
Speaker 1: is reduced regulatory burden, increase production, increase infrastructure, and support export.
Speaker 1: All of that is very positive for the United States. Lebby,
Speaker 1: I'm wondering if you could help me just get my
Speaker 1: mind around the world of master limited partnerships. I used
Speaker 1: to pretend that I knew something about energy transfer partners
Speaker 1: but then it all went and it got complicated, and
Speaker 1: I think you would agree that it went from being
Speaker 1: something that was driven by demand for the yield uh
Speaker 1: specifically the payouts, because payouts from mlp s are treated
Speaker 1: as payouts let's say, from a real estate investment trust,
Speaker 1: so it passes through directly to the investor. So I'm
Speaker 1: wondering if you could just give me a view of
Speaker 1: what's going on in the MLP space, and you might
Speaker 1: even want to use uh, you know, enterprise energy transfer
Speaker 1: partners almost as an example. Well, it's interesting you pick
Speaker 1: energy transfer because that's probably one of the most complicated
Speaker 1: of the energy infrastructure compa's Yeah, exactly. Most of them
Speaker 1: are pretty straightforward. It's a fee based business to transport, process, store,
Speaker 1: crude oil, natural gas. I think that MLPs, which as
Speaker 1: you mentioned, used to be a yield story, probably still
Speaker 1: are a yield story in relative terms. Even though we're
Speaker 1: in a rising rate environment, yields are still fairly low,
Speaker 1: so people are looking for yield reads utilities that's expensive yield.
Speaker 1: MLPs are still cheap yield. But today, in the age
Speaker 1: of the energy renaissance, which we're truly in, the story
Speaker 1: is growth and so there are a ton of energy
Speaker 1: infrastructure companies that are going to be able to grow
Speaker 1: these distributions that can be five six seven percent on average.
Speaker 1: Where do we get a list? I can give you
Speaker 1: a whole list of energy infrastructure count so so olivy
Speaker 1: you oversee almost four billion dollars of assets. Where where
Speaker 1: are you investing right now? So right now, given the uh,
Speaker 1: what we've come through sixteen and coming out of the
Speaker 1: trough and the energy cycle, it's been interesting because the
Speaker 1: upstream companies, the production companies, there are price times volume game.
Speaker 1: Price went down crude those companies, cash flows went down.
Speaker 1: The MLP companies went down right in conjunction with the
Speaker 1: production companies, but their cash flows didn't go down. Why
Speaker 1: because it's just a volume game. So as long as
Speaker 1: the demand was there, the cash flows were going to
Speaker 1: be there, and so the opportunity. There are a lot
Speaker 1: of MLPs that now have trade a very attractive valuations,
Speaker 1: whether they have parents that have billions of dollars of
Speaker 1: infrastructure to drop down, or they become a value story
Speaker 1: because they've been beaten up unfairly. Let's do the value story.
Speaker 1: Tell us give us a couple of examples. Okay, so
Speaker 1: h n g L Energy Partners company that has been
Speaker 1: um was really beat up. Saw it's yield blowout tot um.
Speaker 1: They have, uh, they have done several things to improve
Speaker 1: their balance sheet, bring leverage down. Uh. Their big pipeline,
Speaker 1: Grand Makes of Pipeline is now online, it's moving crude,
Speaker 1: and they entered into a strategic partnership with oak Tree.
Speaker 1: This is going to provide all kinds of opportunities. They
Speaker 1: are going to be able to grow that distribution twenty
Speaker 1: plus percent this year and in three years after that
Speaker 1: at ten plus. So how do you, as an investor
Speaker 1: away from oak Tree get in on that? So you
Speaker 1: buy the public stock and g L and g L
Speaker 1: right and g L trades right now four dollars somewhere
Speaker 1: around there, and you say growth, that's what you want
Speaker 1: to be looking for, right, because I often note that
Speaker 1: in dividend portfolios people are saying it's not just the yield,
Speaker 1: it's whether the company can actually grow the dividend into
Speaker 1: the future. All right, that was a value name, correct? Yes? Okay,
Speaker 1: what what you say that? There are maybe names out
Speaker 1: there also that are just going to provide new growth. Yeah,
Speaker 1: so let me touch on them. The fact that this
Speaker 1: business is going to have uh five billion dollars of
Speaker 1: infrastructure that has to be built out in the United
Speaker 1: States to handle the existing supply sources. So you have
Speaker 1: many companies who have a very nice footprint in the US,
Speaker 1: companies like Williams Partners that's the premier natural gas UH
Speaker 1: pipeline system in the United States. This is a company
Speaker 1: that has done some things to reduce their cost of
Speaker 1: capital UH. It's a company that is going to be
Speaker 1: able to grow at five to seven percent UH and
Speaker 1: a company that UM is really in the premier sweet
Speaker 1: spot of the energy renaissance. Williams Companies Williams Companies ticker
Speaker 1: w p Z. So right now, how much of your
Speaker 1: investments are predicated on the idea that oil prices will
Speaker 1: not fluctuate too much to the downside, meaning, you know,
Speaker 1: beyond forty five a barrel or lower. Yeah, that's a
Speaker 1: great point because the energy infrastructure business and and the
Speaker 1: success of the energy infrastructure business is predicated on the
Speaker 1: energy supply chain functioning normally. And when you get down
Speaker 1: below fifty dollars UH, it's difficult for producers. There are
Speaker 1: some that can can operate in that area, but there
Speaker 1: it's difficult for some producers to operate economically. So that
Speaker 1: becomes an issue if you get too higher prices, say
Speaker 1: we blow out, you have demand destruction, either of those things.
Speaker 1: Heard it, but we think we're writing the sweet spot
Speaker 1: fifty six. Thank you very much to do his partner,
Speaker 1: portfolio manager Cushing Asset Management. Apple. It's been touted as
Speaker 1: the world's most expensive company, at least by market share
Speaker 1: at one point or another. Apple coming out with their
Speaker 1: results after the market closes today here to tell us more.
Speaker 1: Michael Scanlan, portfolio manager Manu Life Asset Management, based in Boston. Michael,
Speaker 1: thanks for being with us. All right, so give us
Speaker 1: your your best estimate, guestimate and everything Apple. What's gonna happen?
Speaker 1: What are they gonna tell us? Thanks for having me.
Speaker 1: You know, I think when you when you look at
Speaker 1: the report tonight, there's obviously the results from last quarter.
Speaker 1: I think the bigger focus for everybody, uh they released
Speaker 1: tonight and conduct the conference call later on this evening
Speaker 1: will likely be more focused on what the guidance is
Speaker 1: going forward forward. I still think when you look at
Speaker 1: this company last year, there was a lot of focus
Speaker 1: on the fact that it was actually a down year
Speaker 1: for them in terms of revenues and uh, the actual
Speaker 1: iPhone units that they sold this year, they should give
Speaker 1: the back on a growth trajectory getting back to where
Speaker 1: they were in two thousand fifteen. So you know that
Speaker 1: will likely help prevent the type of stell off that
Speaker 1: we saw early last year in the stock. Have we
Speaker 1: gotten any indications already about what their iPhone sales are
Speaker 1: going to be like? And how much is the response
Speaker 1: to Apple's earnings hinged on that all important iPhone sales number. Well,
Speaker 1: I think when you look at the quarter, you know,
Speaker 1: people tend to focus, uh probably laser like focus on
Speaker 1: that growth margin number that they were report. And there
Speaker 1: are some one off items that they have had the
Speaker 1: last couple of quarters, especially last quarter with FX and
Speaker 1: some other things. Uh, and you know the stock tends
Speaker 1: to overreact to that number. You know, if you take
Speaker 1: a longer term focus on the Apple, you know it's
Speaker 1: it's a stock that offers a phenomenal total return. Right.
Speaker 1: You get thirty five billion dollars of stock being bought
Speaker 1: back every year, You get just about a two percent
Speaker 1: dividend that buy backs about six percent of the company.
Speaker 1: See you add those two things together, you're getting an
Speaker 1: eight percent return before they do anything in terms of
Speaker 1: earnings growth or multiple expansions for the name. Well, well,
Speaker 1: just to do a little bit more math to make
Speaker 1: your head spin, we're talking about sales of anywhere between
Speaker 1: seventies six and seventy eight billion. That would actually be
Speaker 1: the highest revenue in a single quarter ever. Also gross
Speaker 1: margins of between thirty eight and thirty eight and a
Speaker 1: half percent. That does compared to about forty in the
Speaker 1: year ago quarter. Correc think that's one of the big
Speaker 1: things too. I mean, you look at this company. Nobody
Speaker 1: makes money in smartphones, right, and people are talking about
Speaker 1: this new Google Pixel phone, and you know, even the
Speaker 1: most robust projections are nowhere near the two thirty million
Speaker 1: or so iPhones at Apple cells in a year. So
Speaker 1: you know, the numbers are big. Yes, the market cap
Speaker 1: is big, but when you look at it from evaluation standpoint,
Speaker 1: I mean, Apples at roughly thirteen thirteen and a half
Speaker 1: times this year, even cheaper than that, maybe nine and
Speaker 1: a half times free cash flow because they're pre cash
Speaker 1: flows greater than the EPs. So it's not like you're
Speaker 1: paying a premium multiple for those huge absolute numbers that
Speaker 1: you just mentioned. My uh, as an investor, how much
Speaker 1: you're hoping to hear from Apple about bigger pushes into
Speaker 1: for example, content creation or new apps and new services,
Speaker 1: So that that's been a big controversy on the stock.
Speaker 1: And you know, the last quarter, when you think back
Speaker 1: to the earnings called, they spent a lot of time
Speaker 1: talking about the services business there and the strong growth
Speaker 1: trajectory and the contribution that they get because that's pretty
Speaker 1: high margin revenues, so that's really critical. I wouldn't expect
Speaker 1: that you're going to hear anything new tonight in terms
Speaker 1: of new product lines or anything that along those lines.
Speaker 1: They tend to keep that pretty close to the vest,
Speaker 1: and obviously they have those well advertised product announcements that
Speaker 1: they do. That being said, there is um uh, you know,
Speaker 1: a lot of the talk right now in the industry
Speaker 1: in terms of original content production being Netflix and Amazon.
Speaker 1: Apple has dipped their toe into that area very very
Speaker 1: slightly with this karaoke in cars initiative that they have.
Speaker 1: You know, I think the market would reward the stock
Speaker 1: if you can ultimately do something with the TV product
Speaker 1: where you can get a skinny down chord shaped type
Speaker 1: bundle product. But thus far they haven't been able to
Speaker 1: reach an agreement with the content providers. Hey, no, Michael,
Speaker 1: you follow much more than than Apple, and I'm wondering
Speaker 1: if you can sort of give us a little bit
Speaker 1: of a window into the John Hancock Balanced Fund and
Speaker 1: some of the other funds that you run. Sure, so
Speaker 1: you know, specific to the John Hancock Balanced Fund. Tech
Speaker 1: is a pretty healthy wait for us in the portfolio,
Speaker 1: and you know, it's it's an area where we've done
Speaker 1: pretty well from an individual stock selection perspective. Tech thus
Speaker 1: far this year has been a pretty good sector. I
Speaker 1: believe it's second the second best returning sector only two materials,
Speaker 1: and we've had some nice winners in there with Seagate
Speaker 1: reporting blowout earnings last week. Applied Materials has had a
Speaker 1: really nice run here to start the year. Facebook has
Speaker 1: been another big winner for us. I guess if you
Speaker 1: were to look at it and point to the negative,
Speaker 1: really the only blemish for us thus far this year
Speaker 1: in tech has been Google, which you know, when you
Speaker 1: when you sort of back out the one off items
Speaker 1: that they had this quarter. Um, you know, that's still
Speaker 1: a name that we like a lot, and it is
Speaker 1: our biggest position in the portfolio overall, um by you know,
Speaker 1: quite a wired margin over the number two holding that
Speaker 1: we have. Well, I'll just tell you that the fund
Speaker 1: is up I think a little bit more than one
Speaker 1: point so far this year. Michael Scalon, thank you so
Speaker 1: much for joining us. Michael Scalin, folio manager for Manu
Speaker 1: Life Asset Management, talking about Apple. Max Neeson, my Bloomberg
Speaker 1: Gadfly columnist, my neighbor who sits next to me all day. Uh, Max,
Speaker 1: I want to talk to you about a lot of
Speaker 1: things going on. There's certainly a lot of earnings coming
Speaker 1: out from the pharmaceutical companies, but we need to really
Speaker 1: start with some of the rhetorics we've heard from President
Speaker 1: Trump after his meeting with some pharmaceutical CEOs. Can you
Speaker 1: give us your impression of the comments that we've heard
Speaker 1: so far. Yeah, So we're we're kind of just starting
Speaker 1: to get some details that are coming out of the meeting,
Speaker 1: from the part that the press eded on and and
Speaker 1: from the ceo that are now out of the meeting.
Speaker 1: Trump did bring up pharmaceutical pricing again, called it astronomical.
Speaker 1: That's obviously not a particularly good sign for the industry,
Speaker 1: but that aside, it seemed to be comparatively friendly. He
Speaker 1: talked up friendly at tax reform and some de regulation
Speaker 1: at the f d A which might be a little
Speaker 1: bit more mixed, But um, the pricing thing is still
Speaker 1: out there, and that's kind of kind of remain illuming, toright.
Speaker 1: I'm sure that the CEO has tried to kind of
Speaker 1: talk him away from his preferred remedy, which is allowing
Speaker 1: Medicare to negotiate drug prices directly. Those are the issues,
Speaker 1: right that drug price, uh, competition perhaps, and maybe even
Speaker 1: the bidding they were talking about, you know, bidding for
Speaker 1: specific contracts that would not necessarily petitive bidding. Yeah, that
Speaker 1: that would be definitely a big downside risk for a
Speaker 1: lot of firms that do a lot of business with
Speaker 1: the government. The government, you know, if it chooses to
Speaker 1: has essentially unlimited negotiating leverage because they grant the monopolies
Speaker 1: that these companies rely on. So if they use that
Speaker 1: as a negotiating tool, they can pretty much push prices
Speaker 1: down whatever they want. They can set prices, so there's
Speaker 1: a lot of kind of a wide range of things
Speaker 1: can happen, from just getting the same rebates that are
Speaker 1: seen on the private market to something much more drastic,
Speaker 1: which is what I think firms are afraid of. You know, Max,
Speaker 1: based on the market reaction, do we have a sense
Speaker 1: of what his President Trump's rhetoric means of astronomical pricing?
Speaker 1: I mean, do people have a sense of what the
Speaker 1: implications are for these companies based on the stock price
Speaker 1: moves subsequent to the language being released. You know, it's
Speaker 1: very much a guessing game whether this is going to
Speaker 1: be a serious policy pushed by the president or if
Speaker 1: he just wanted what happened today, you know, all the
Speaker 1: seas to combine sort of kissed the ring and promise
Speaker 1: to move manufacturing back and higher Americans, um or if um,
Speaker 1: you know. And then there's the other kind of outstanding issue,
Speaker 1: which is can Trump actually get the Republican Party to
Speaker 1: come along on a policy that they've historically opposed. So really, um,
Speaker 1: I think the CEOs and investors are still kind of
Speaker 1: trying to guess what's going to happen next. Yeah, well
Speaker 1: it is a challenge. I mean, I just I would
Speaker 1: throw this quote at you and then you can tell
Speaker 1: me which president said this. The pricing has been astronomical.
Speaker 1: Now you could fill in the blank with a lot
Speaker 1: of different presidents named there, because the many presidents have
Speaker 1: been critical of the pharmaceutical industry for the prices of drugs. Yeah,
Speaker 1: and that was today. Yeah, and that that's that's not
Speaker 1: a quote you want to hear from the President exactly.
Speaker 1: Another thing you don't want to hear is that the
Speaker 1: US court system doesn't believe that you have a sufficient
Speaker 1: patent restriction on some of your drugs. And that seems
Speaker 1: to be what happened with Tava Parmaceuticals, which plunged to
Speaker 1: its lowest in more than a decade following um. Yeah,
Speaker 1: there's a there's an amazing story because there was stuff
Speaker 1: going on. Just can you send mac sinistrate about Tava
Speaker 1: and how it came to be its generic business plus Yeah,
Speaker 1: and it's in debt, it's really were it's a it's
Speaker 1: a pretty fascinating company that that's in pretty rough shape
Speaker 1: right now. So they're the world's largest generic company and
Speaker 1: very much the world's largest generic company after they spend
Speaker 1: forty billion to buy Allorgan's legacy generic's portfolio. Now the
Speaker 1: purchase price for that deal and its detload are larger
Speaker 1: than its market cap after this uh setback to its
Speaker 1: lead drug, It's which is a multiple scrosser strug. So
Speaker 1: I totally bungled it. What is the setback? Can you
Speaker 1: explain it? Yeah? Absolutely. So they have a drug called
Speaker 1: capac zone. It treats multiple scorros is. Actually the lead
Speaker 1: patent expired some years ago, but they got patents on
Speaker 1: a more convenient dosage of the drug was just a
Speaker 1: couple of times a week instead of more frequently, so
Speaker 1: that they managed to switch patients to that and kind
Speaker 1: of extend the sales life of this drug much farther
Speaker 1: than anyone expected. But this might be the end of
Speaker 1: the road for that strategy because the patents on that
Speaker 1: extension got knocked down by by the district court. Holy cow,
Speaker 1: Tava has more than a hundred billion dollars of debt.
Speaker 1: That's insane. That's according to Bloomberg the A G G
Speaker 1: D function. Uh m hmm. I wonder if that's accurate. Well,
Speaker 1: so I'm going to check that. But it shares it down.
Speaker 1: Uh Does Tava have a generics business that would be
Speaker 1: attractive if it was spun off? I mean, well, the
Speaker 1: generics business is the business. It's it's more than substantially
Speaker 1: more than half of the revenue and should grow to
Speaker 1: half the profit this year. Kind of as the the
Speaker 1: activist acquisition matures. So I mean the they've kind of
Speaker 1: made that acquisition in order to reduce dependence on on
Speaker 1: copac zone, so that that's kind of what they're betting
Speaker 1: on too, you know, see synergies from that and improved performance,
Speaker 1: but to date it's been pretty difficult. They haven't seen
Speaker 1: the expected to return from that deal or um or
Speaker 1: improving the generic's business for a while now. Another being
Speaker 1: hit by the slowdown in the generic's business is Fiser.
Speaker 1: Can you talk about uh that company? Their shares are
Speaker 1: currently falling after their report. Yeah, so they they missed
Speaker 1: on EPs in the fourth quarter and also gave revenue
Speaker 1: forecast that came in below expectations because they expect to
Speaker 1: see greater than expected genneric compet shoot on their branded drugs,
Speaker 1: So they're gonna lose sales to generics companies like Teva
Speaker 1: at at an accelerated rate and don't quite have the
Speaker 1: horses in terms of newly approved or or expanding drugs
Speaker 1: to to kind of make up for to the degree
Speaker 1: that animals expected. So that's why they're down. Just just
Speaker 1: to clarify, when you set a hundred and thirty billions,
Speaker 1: you were looking at Israeli shekels I did the math.
Speaker 1: It's okay, thirty five billion, thirty four points seven billions,
Speaker 1: all right, thank I love it. This is why you
Speaker 1: have a bloomberg, uh you know, a Max just to
Speaker 1: continue that that thought, No, don't. She's worried to continue
Speaker 1: that that thought. You know, we heard today earlier about
Speaker 1: the ups and they kind of said, you know, foreign
Speaker 1: currency issues hurt their results. Do you hear that from
Speaker 1: pharmaceutical companies um on on a pretty frequent basis? I mean,
Speaker 1: you know, they do business all of the world, and
Speaker 1: the strong dollars is not necessarily to their benefit. And
Speaker 1: you know, most of the largest pharmaceutical companies in the
Speaker 1: world reporting dollars, so they're they're facing that and you
Speaker 1: know everything from the Euro two two problems in Venezuela.
Speaker 1: So it's definitely. They keep a lot of their currency overseas.
Speaker 1: You know, they do exactly, which is why you saw
Speaker 1: the the You know, they keep a lot of cash overseas.
Speaker 1: You saw that massive thirty billion dollar actially on deal,
Speaker 1: which was as much about using that currency in a
Speaker 1: tax efficient manner as it was in actually expecting and
Speaker 1: speaking with the president today, Max Neeson, Thanks very much,
Speaker 1: our gad fly when it comes to all things healthcare
Speaker 1: as well as pharmaceutical related. I want to bring in
Speaker 1: Patrick donohue. He's a German government reporter for Bloomberg in Berlin,
Speaker 1: and Patrick, Um, just can we start with uh, your
Speaker 1: lay of the land and Angela Merkel's response to this
Speaker 1: assertion via President Trump's administration. Yeah. Sure. Michael was asked
Speaker 1: about Peter Navarro's comments shortainly after he made them. Um.
Speaker 1: The specific accusation was that Germany, Germany benefits from a
Speaker 1: grossly undervalued thunder valued euro. Um. I mean, German officials
Speaker 1: are pretty used to defending themselves against criticism about an
Speaker 1: excessive trades there plus, But in this case, Michael simply
Speaker 1: said that Germany upholds the independence of the e c
Speaker 1: B and that she plans she's happy to do nothing
Speaker 1: about the exchange rate. Well, she might not want to
Speaker 1: do anything about the exchange rate, but traders might have
Speaker 1: a different idea. Well, I mean, it's it's it was
Speaker 1: kind of uh, I mean, it seemed to be a
Speaker 1: version of this the of a standard criticism of Germany's
Speaker 1: current account silurplus and the frame at Peter Navarro was
Speaker 1: speaking to the Financial Times. Um, he seemed to articulate
Speaker 1: this as a reason why they were dropping The US
Speaker 1: administration was dropping U T TIP the MARKEEEU U S
Speaker 1: trade agreement, and that to show that the EU was
Speaker 1: not a bilateral partner, but was a multi lateral partner.
Speaker 1: Therefore they would not pursue it. So, Uh, Navarro's comments
Speaker 1: seemed to go in a lot of directions. You know,
Speaker 1: it sort of brings up this other story that's on
Speaker 1: the Bloomberg this morning. Let's talking about how the EU
Speaker 1: President Donald Tusk said that the Nation Block is facing
Speaker 1: the most dire threats in its six decade history, in
Speaker 1: large part because of President Trump's pronouncements as well as
Speaker 1: those by his staff. Um, what do you make of that? Well, you,
Speaker 1: before the election was already facing huge problems with Brexits,
Speaker 1: the threats of you know, possible disintegration of of of
Speaker 1: the block, and it was a refugee crisis and everything. Um,
Speaker 1: the unpredictability that's coming from Washington, according to Pusk, and
Speaker 1: he was talking I think in the Baltic States adds
Speaker 1: to that. And uh, he placed the new administration alongside
Speaker 1: other you threats such as Russia and China, And so
Speaker 1: that is kind of a snapshot of where we are
Speaker 1: now and where European officials see this. Right, Um, Dave,
Speaker 1: I want to bring you in here. You know, there's
Speaker 1: a lot of catastrophic talk about the biggest risk, uh,
Speaker 1: you know, in decades potentially we're getting closer to you know,
Speaker 1: the end of the world's calculator or whatever. Uh. Some
Speaker 1: some researchers talking about the atomic clock. Right, Uh, David,
Speaker 1: where are we seeing this in the market. Well, all
Speaker 1: you have to do is look at the results out
Speaker 1: of the United Parcel Service UPS. I mean, their fourth
Speaker 1: quarter earnings coming up short of analysts low assessment in
Speaker 1: Bloomberg survey, uh, their profit forecast for this year missing projections,
Speaker 1: and a lot of its currency related. Among other things
Speaker 1: they're talking about UPS is that adjusted earnings may get
Speaker 1: hit before taxes by four hundred million dollars this year
Speaker 1: because of currency moves. And it all has to do
Speaker 1: with the dollar strength. So don't investors look past that? Well,
Speaker 1: and I was about to say, I mean, that's that's
Speaker 1: not that's not hysteria. That's looking at the results and
Speaker 1: responding it's not you know, people really all of a
Speaker 1: sudden moving to cash or sort of preparing for armageddon.
Speaker 1: This just people responding to earnings. I mean, I guess
Speaker 1: when you hear the histrionic talk, you wonder, how do
Speaker 1: you pair that with what we're actually seeing in the market. Yeah,
Speaker 1: that's true. I mean, then again, you do have UPS
Speaker 1: shares down almost seven percent in today's trading, So it's
Speaker 1: something that clearly hasn't been quite factored into the extent
Speaker 1: that you're seeing that move. You know, is it going
Speaker 1: to be arm again? Well, I mean certainly UPS isn't
Speaker 1: talking about arm again. At the same time, it is
Speaker 1: clearly something that's having an effect on their performance. Let
Speaker 1: me just to break it and Dave, is it possible
Speaker 1: that any infrastructure spending plans that would upgrade roads, highways, bridges, etcetera.
Speaker 1: Would be beneficial to FedEx as well as UPS they
Speaker 1: would get to use these Well, sure, I mean you
Speaker 1: have to think more in terms of the companies that
Speaker 1: are actually going to do the work, the construction companies
Speaker 1: or whoever. Uh. Nonetheless, I mean there is the benefit
Speaker 1: down the line for companies that actually use the roads,
Speaker 1: no question. And also just want to mention you don't.
Speaker 1: I know this is off topic slightly, but you know
Speaker 1: the Super Bowl is coming up on Sunday, right, super
Speaker 1: Bowl fifty one. Guess who is delivering the Vince Lombardi
Speaker 1: Trophy to Houston in advance of that FedEx There you go.
Speaker 1: You know I could see your I could say, I
Speaker 1: could see your face. Just I'm talking about global. Well,
Speaker 1: well you can. I think they'll the world will be
Speaker 1: around at least until Sunday to see them play the
Speaker 1: Super Bowl. Just have a feeling, I hope. So, Patrick Donahue,
Speaker 1: thank you so much for joining us, German government reporter
Speaker 1: from Bloomberg in Berlin, as well as they both said,
Speaker 1: thank you so much as always for joining us Bloomberg
Speaker 1: SOX blumnist and a member of the live blog. Thanks
Speaker 1: for listening to the Bloomberg P and L podcast. You
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Speaker 1: whatever podcast platform you prefer. I'm Pim Fox. I'm out
Speaker 1: there on Twitter at pim Fox. I'm out there on
Speaker 1: Twitter at Lisa Abramo. It's one before the podcast. You
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Speaker 1: HM