1 00:00:00,120 --> 00:00:04,360 Speaker 1: Bloomberg is now on your dashboard with Apple CarPlay and 2 00:00:04,360 --> 00:00:08,160 Speaker 1: Android Auto. It gives you access to every Bloomberg podcast, 3 00:00:08,280 --> 00:00:11,560 Speaker 1: live audio feeds from Bloomberg Radio, print stories from Bloomberg 4 00:00:11,640 --> 00:00:14,920 Speaker 1: News in audio form, and the latest headlines of the 5 00:00:14,920 --> 00:00:18,600 Speaker 1: click of a button with Bloomberg News. Now it's free 6 00:00:18,680 --> 00:00:21,439 Speaker 1: with the latest version of the Bloomberg Business App. That's 7 00:00:21,680 --> 00:00:24,400 Speaker 1: the Bloomberg Business App. Get it on your phone in 8 00:00:24,440 --> 00:00:27,760 Speaker 1: the Apple App Store or on Google Play. Just download 9 00:00:27,800 --> 00:00:30,560 Speaker 1: the app, connect your phone to your car and get started. 10 00:00:30,960 --> 00:00:34,400 Speaker 1: And it's all presented by our sponsor, Interactive Brokers. 11 00:00:35,400 --> 00:00:38,600 Speaker 2: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 12 00:00:38,640 --> 00:00:39,800 Speaker 2: my co host Matt Miller. 13 00:00:40,200 --> 00:00:44,279 Speaker 1: Every business day we bring you interviews from CEOs, market pros, 14 00:00:44,320 --> 00:00:48,160 Speaker 1: and Bloomberg experts, along with essential market movin news. 15 00:00:48,720 --> 00:00:51,839 Speaker 2: I'm the Bloomberg Markets podcast called Apple Podcasts or wherever 16 00:00:51,960 --> 00:00:55,640 Speaker 2: you listen to podcasts, and at Bloomberg dot Com slash podcast. 17 00:00:55,760 --> 00:00:58,400 Speaker 2: Today we had the jolts come in a little lower 18 00:00:58,400 --> 00:01:01,480 Speaker 2: than expect it, So if you were job openings, ism 19 00:01:01,560 --> 00:01:03,480 Speaker 2: services jess as we were talking before, came in a 20 00:01:03,520 --> 00:01:06,440 Speaker 2: little bit better than forecast, better than last month. That's good, 21 00:01:06,560 --> 00:01:09,360 Speaker 2: maybe fed friendly, But I don't know how to put 22 00:01:09,400 --> 00:01:13,880 Speaker 2: all this together. Fortunately we have people do that for us. 23 00:01:14,240 --> 00:01:15,960 Speaker 2: One of them is Jennifer Lee. She's a senior e 24 00:01:16,000 --> 00:01:18,679 Speaker 2: conmist and managing director BEIMO Capital Markets. 25 00:01:18,959 --> 00:01:21,680 Speaker 3: And for the folks the kids that don't know, that's Bank. 26 00:01:21,560 --> 00:01:25,080 Speaker 2: Of Montreal back in the day, BEMO Capital Market's a 27 00:01:25,120 --> 00:01:29,399 Speaker 2: great firmat there in Canada. So, Jennifer, looking at the 28 00:01:29,480 --> 00:01:32,440 Speaker 2: US economy, what's your take here? I mean, is it 29 00:01:32,480 --> 00:01:35,119 Speaker 2: a soft landing and hard landing and no landing? What's 30 00:01:35,160 --> 00:01:35,920 Speaker 2: going on out there? 31 00:01:37,040 --> 00:01:38,760 Speaker 4: Good morning, and thank you very much, Cheviell, thank you 32 00:01:38,760 --> 00:01:39,399 Speaker 4: for having me on. 33 00:01:39,480 --> 00:01:41,400 Speaker 5: You know, I'm going to stick to what we have 34 00:01:41,480 --> 00:01:43,000 Speaker 5: been saying for a long time now, which is that 35 00:01:43,080 --> 00:01:45,759 Speaker 5: soft landing narrative. At least it is up until now 36 00:01:45,800 --> 00:01:49,120 Speaker 5: like this morning's as you're pointing out this morning's to reports, 37 00:01:49,160 --> 00:01:52,160 Speaker 5: you know, the ism was up and the jolts were down, Joppa, 38 00:01:52,200 --> 00:01:54,640 Speaker 5: bricks were down. So it's it's it's but it's not 39 00:01:54,960 --> 00:01:57,840 Speaker 5: down enough. We still have over one point four jobs 40 00:01:57,920 --> 00:02:00,480 Speaker 5: available for every unemployed American out there. That's it's a 41 00:02:00,520 --> 00:02:03,240 Speaker 5: pretty decent jaw market overall. It's not we're not seeing 42 00:02:03,360 --> 00:02:05,400 Speaker 5: you know, two jobs for every one person like we did, 43 00:02:05,560 --> 00:02:08,400 Speaker 5: you know, last year. But it's still a tight labor 44 00:02:08,440 --> 00:02:11,440 Speaker 5: market and it's still fairly healthy. I some services you 45 00:02:11,480 --> 00:02:13,720 Speaker 5: know showing the activity is picking up the most of 46 00:02:13,760 --> 00:02:15,160 Speaker 5: a couple of months. I mean, this is only the 47 00:02:15,160 --> 00:02:17,360 Speaker 5: first increase in a few months, but still it shows 48 00:02:17,400 --> 00:02:21,400 Speaker 5: that again, this whole soft landing narrative is still playing out, 49 00:02:21,400 --> 00:02:22,160 Speaker 5: at least for now. 50 00:02:22,320 --> 00:02:26,359 Speaker 6: Looking at the ECFC function in the terminal pull up, 51 00:02:26,520 --> 00:02:30,880 Speaker 6: looking at where the consensus among economists that are pulled 52 00:02:30,919 --> 00:02:34,320 Speaker 6: in the terminal. You can look at annually, also quarterly. 53 00:02:34,720 --> 00:02:36,839 Speaker 6: If you look over quarterly, though on a basis, there's 54 00:02:37,200 --> 00:02:40,839 Speaker 6: there no longer is a quarter over quarter contraction coming 55 00:02:40,880 --> 00:02:43,760 Speaker 6: into this year. Originally there was a call for the 56 00:02:43,800 --> 00:02:46,000 Speaker 6: second and third quarter to see contraction. We aren't seeing 57 00:02:46,000 --> 00:02:48,760 Speaker 6: that anymore. We're still seeing growth. So I'm curious your 58 00:02:48,800 --> 00:02:52,600 Speaker 6: thoughts on when there still is this concern because looking 59 00:02:52,680 --> 00:02:56,120 Speaker 6: at how the consensus among economists, the probability of a 60 00:02:56,120 --> 00:02:59,360 Speaker 6: recession is still around fifty percent. That's pretty elevated compared 61 00:02:59,360 --> 00:03:01,120 Speaker 6: to if you're looking at say other firms like Golden 62 00:03:01,200 --> 00:03:04,679 Speaker 6: Snacks that have lowered their calls in recent months. Why 63 00:03:04,680 --> 00:03:07,360 Speaker 6: do you think there is still so much skepticism in 64 00:03:07,520 --> 00:03:10,200 Speaker 6: gluiness out there about the trajectory of the economy when 65 00:03:10,240 --> 00:03:13,720 Speaker 6: you have this chextaposed against a lot of really strong 66 00:03:13,840 --> 00:03:15,200 Speaker 6: consumer spending data. 67 00:03:16,360 --> 00:03:18,480 Speaker 5: I think it's it's a great question, and I'm thinking that, 68 00:03:18,560 --> 00:03:21,000 Speaker 5: you know, we've never been in this sort of environment 69 00:03:21,080 --> 00:03:22,880 Speaker 5: where you know, we have a central bank like the 70 00:03:22,919 --> 00:03:24,880 Speaker 5: FAT that has been tightening so much in such a 71 00:03:24,919 --> 00:03:26,400 Speaker 5: short amount of time. This is like a reck of 72 00:03:26,440 --> 00:03:29,120 Speaker 5: the amount, and yet we're still seeing you know, a 73 00:03:29,120 --> 00:03:31,120 Speaker 5: business investment. You know, it's it's has us ups and 74 00:03:31,200 --> 00:03:33,280 Speaker 5: downs of course, but it's still supported by a by 75 00:03:33,280 --> 00:03:36,440 Speaker 5: physical spending. And it all goes back to the US 76 00:03:36,480 --> 00:03:39,120 Speaker 5: consumer staying resilient. You know, they're not going to be 77 00:03:39,160 --> 00:03:42,680 Speaker 5: spending like crazy, you know, for for you know, in 78 00:03:43,000 --> 00:03:45,440 Speaker 5: twenty months, I think things have already started to dial down. 79 00:03:45,760 --> 00:03:47,880 Speaker 5: But again it's that it's that job market. I think 80 00:03:47,920 --> 00:03:49,920 Speaker 5: it's all goes back to having a strong job market, 81 00:03:49,920 --> 00:03:52,640 Speaker 5: and that goes back to demographics, It goes back to 82 00:03:52,680 --> 00:03:54,760 Speaker 5: the pandemic. What I was a little bit worried about, 83 00:03:54,800 --> 00:03:56,640 Speaker 5: I will say, was when I saw the personal income 84 00:03:56,640 --> 00:03:59,440 Speaker 5: of spending data last week. With that mind that very 85 00:03:59,440 --> 00:04:02,600 Speaker 5: small point one percent, which is a salary increased, and 86 00:04:02,640 --> 00:04:04,240 Speaker 5: I was like, oh, that's not great, but you know, 87 00:04:04,240 --> 00:04:06,560 Speaker 5: it's good in terms for the FED. It's not great 88 00:04:06,560 --> 00:04:08,040 Speaker 5: for the consumer. But as long as you know, we 89 00:04:08,080 --> 00:04:10,800 Speaker 5: continue to see steady job growth, continue to see steady 90 00:04:10,840 --> 00:04:13,080 Speaker 5: wage gains, you know, either point one or point five 91 00:04:13,160 --> 00:04:14,720 Speaker 5: or whatever, you know, I think that will be a 92 00:04:14,720 --> 00:04:17,880 Speaker 5: good support system overall for the US economy. Now, we 93 00:04:17,920 --> 00:04:21,080 Speaker 5: actually pulled, by the way, our negative growth rate quite 94 00:04:21,080 --> 00:04:22,640 Speaker 5: a while ago, and I'm losing track of time here 95 00:04:22,680 --> 00:04:23,400 Speaker 5: in my old age, but. 96 00:04:23,920 --> 00:04:25,520 Speaker 4: You know, we have, we have pulled it. And again 97 00:04:25,560 --> 00:04:26,719 Speaker 4: we're sticking to that soft planning. 98 00:04:26,720 --> 00:04:30,360 Speaker 5: So we've got, you know, growth slowing from that sustainable 99 00:04:30,400 --> 00:04:32,560 Speaker 5: I think five point two percent growth rate in Q 100 00:04:32,760 --> 00:04:35,360 Speaker 5: three down to about one percent in Q four and 101 00:04:35,400 --> 00:04:37,000 Speaker 5: then flattening out a little bit around you know, the 102 00:04:37,040 --> 00:04:39,159 Speaker 5: point two is or so over the next first half 103 00:04:39,200 --> 00:04:40,080 Speaker 5: of next year. 104 00:04:41,000 --> 00:04:42,000 Speaker 4: Jennifer talking about. 105 00:04:42,320 --> 00:04:44,920 Speaker 3: Jennifer talked to us about inflation here. I don't know. 106 00:04:45,000 --> 00:04:47,080 Speaker 2: I mean, for John Tucker and I it's all about 107 00:04:47,120 --> 00:04:50,560 Speaker 2: filling up our cars with gasoline down at the Jersey Shore. 108 00:04:50,560 --> 00:04:52,240 Speaker 2: And I just filled up for three dollars and ten 109 00:04:52,320 --> 00:04:55,560 Speaker 2: cents a gallon. I feel like inflation's coming down, but 110 00:04:56,200 --> 00:04:58,680 Speaker 2: I'm guessing the Fed does engage it on my gasoline 111 00:04:59,000 --> 00:05:01,479 Speaker 2: intake here. But so, how do you think the FED 112 00:05:01,520 --> 00:05:04,039 Speaker 2: is viewing inflation and the fight against inflation. 113 00:05:05,360 --> 00:05:08,000 Speaker 4: I think it's viewing it with a very cautious outlook. 114 00:05:08,200 --> 00:05:10,680 Speaker 5: And even though you know, for example, like last week, 115 00:05:10,680 --> 00:05:13,520 Speaker 5: when Governor Waller introduced the whole cost of rape cuts 116 00:05:13,560 --> 00:05:16,480 Speaker 5: into the whole conversation, which everyone like got super excited about, 117 00:05:16,640 --> 00:05:18,120 Speaker 5: you know, he didn't, you know, he just said that 118 00:05:18,240 --> 00:05:20,039 Speaker 5: was like a he was encouraged by that number, and 119 00:05:20,080 --> 00:05:21,960 Speaker 5: in needs. I think he said like three four or 120 00:05:22,000 --> 00:05:24,240 Speaker 5: five months before they can start. 121 00:05:24,000 --> 00:05:24,880 Speaker 4: Talking about rapecuts. 122 00:05:24,880 --> 00:05:27,760 Speaker 5: So he didn't mention that they're going to start cutting race. 123 00:05:28,000 --> 00:05:29,839 Speaker 5: He says, we need to see a few more months 124 00:05:29,839 --> 00:05:33,279 Speaker 5: worth of of better inflation data before we do anything. 125 00:05:33,560 --> 00:05:35,719 Speaker 5: So I think they're really with a very cautious outlook. 126 00:05:35,960 --> 00:05:38,200 Speaker 5: But again, you know, we when we have longer term 127 00:05:38,360 --> 00:05:40,839 Speaker 5: inflationary pressures out there, like from the labor market, you know, 128 00:05:40,920 --> 00:05:44,400 Speaker 5: like we have the working age population globally has already 129 00:05:44,400 --> 00:05:46,359 Speaker 5: basically peaked, right, so we're seeing a. 130 00:05:46,360 --> 00:05:48,359 Speaker 4: Lot of people retiring, a lot of people. 131 00:05:48,279 --> 00:05:51,200 Speaker 5: Shifting industries, so there's still that tightness. 132 00:05:50,760 --> 00:05:51,440 Speaker 4: In the labor market. 133 00:05:51,520 --> 00:05:53,760 Speaker 5: And this is like again a global phenomenon, and certainly 134 00:05:54,080 --> 00:05:55,960 Speaker 5: that in the US. I think Bloomberg ran a story 135 00:05:55,960 --> 00:05:58,560 Speaker 5: this morning about meurses being you know, a short supply 136 00:05:58,680 --> 00:06:01,680 Speaker 5: as another example of a of an industry that needs workers. 137 00:06:01,880 --> 00:06:03,640 Speaker 5: So that's going to cause out for pressure on wages 138 00:06:04,240 --> 00:06:06,479 Speaker 5: and the labor market. And then I'm going to go, 139 00:06:06,600 --> 00:06:08,760 Speaker 5: I'm going to point to mother Nature again and climate 140 00:06:08,920 --> 00:06:11,839 Speaker 5: that's been causing so much havoc all over the world 141 00:06:11,839 --> 00:06:14,680 Speaker 5: in terms of like floods and droughts, and I think 142 00:06:14,680 --> 00:06:16,919 Speaker 5: that's going to have you know, some still upward pressure 143 00:06:16,920 --> 00:06:18,840 Speaker 5: on food prices and all that. And of course all 144 00:06:18,839 --> 00:06:21,359 Speaker 5: the wars are having upper pressure on energy prices, so 145 00:06:21,400 --> 00:06:24,479 Speaker 5: all that I think still has I'm a bit worried 146 00:06:24,480 --> 00:06:26,280 Speaker 5: still about inflation. Not going to call it an all 147 00:06:26,279 --> 00:06:29,000 Speaker 5: clear just yet, and I think the FED would probably agree. 148 00:06:29,400 --> 00:06:32,240 Speaker 6: On Friday's jobs report, we'll also get a reading on 149 00:06:32,320 --> 00:06:34,960 Speaker 6: average hourly earnings. What are you seeing when it comes 150 00:06:35,000 --> 00:06:37,640 Speaker 6: to wage growth, because that is something that we know 151 00:06:37,720 --> 00:06:40,080 Speaker 6: FED Chair Jero Pal is watching really closely. 152 00:06:41,880 --> 00:06:44,279 Speaker 5: So we're looking for about a three times increase, which 153 00:06:44,279 --> 00:06:46,520 Speaker 5: is in line with consensus, you know, about four percent 154 00:06:46,600 --> 00:06:50,640 Speaker 5: year over year. Still steady, but coming down maybe because 155 00:06:51,440 --> 00:06:53,440 Speaker 5: we already know that the economy is slowing. It's not 156 00:06:53,760 --> 00:06:55,640 Speaker 5: five point two percent anymore. You know, it's probably closer 157 00:06:55,640 --> 00:06:59,520 Speaker 5: to one percent this quarter. Demand is starting to slow. 158 00:06:59,560 --> 00:07:01,800 Speaker 5: We're not seeing you know, three hundred thousand jobs job 159 00:07:01,839 --> 00:07:04,800 Speaker 5: increases anymore. So I think wage demands and the fact 160 00:07:04,800 --> 00:07:07,120 Speaker 5: that inflation, as we just said, is coming down, I 161 00:07:07,120 --> 00:07:10,200 Speaker 5: think it's going to temperate demand for earnings. 162 00:07:10,320 --> 00:07:10,480 Speaker 4: Now. 163 00:07:10,480 --> 00:07:12,160 Speaker 5: Having said that, you know, I'm also a bit concerned 164 00:07:12,200 --> 00:07:14,440 Speaker 5: just given all the strikes that we've seen over the 165 00:07:14,480 --> 00:07:16,360 Speaker 5: past year, and I don't remember have a time where 166 00:07:16,400 --> 00:07:18,760 Speaker 5: we saw so many and demands were being met. So 167 00:07:18,800 --> 00:07:20,560 Speaker 5: that again is sort of like that, you know, on 168 00:07:20,560 --> 00:07:22,040 Speaker 5: the one hand, on the other hand, thing with which 169 00:07:22,040 --> 00:07:24,200 Speaker 5: I shouldn't be doing, but I'm doing it anyway, you know, 170 00:07:24,320 --> 00:07:29,640 Speaker 5: overall slowing demand for labor, but still you know, there's 171 00:07:29,640 --> 00:07:31,560 Speaker 5: still that that big source overall, So I think it's 172 00:07:31,560 --> 00:07:34,640 Speaker 5: still gonna be steadyish, but slower wage growth overall. 173 00:07:35,040 --> 00:07:38,040 Speaker 2: Jennifer, Outside of the US, where you kind of focusing 174 00:07:38,040 --> 00:07:39,880 Speaker 2: on where's the next where's the big delta? 175 00:07:39,960 --> 00:07:43,000 Speaker 3: Is it Europe? Is it Asia? Outside the US? Where 176 00:07:43,000 --> 00:07:43,640 Speaker 3: are you focusing? 177 00:07:44,480 --> 00:07:47,000 Speaker 5: I'm kind of worried about Europe, frankly, but although this 178 00:07:47,080 --> 00:07:50,080 Speaker 5: morning I will say that was a little bit more relieved. 179 00:07:50,080 --> 00:07:52,040 Speaker 5: You know, it was like some and we normally don't 180 00:07:52,040 --> 00:07:55,239 Speaker 5: look at revisions too much for services and composite. 181 00:07:54,760 --> 00:07:56,480 Speaker 4: Pmis because they usually don't change that much. 182 00:07:56,520 --> 00:07:59,600 Speaker 5: But the fact that they all realized higher, particularly in 183 00:07:59,800 --> 00:08:02,120 Speaker 5: the UK as well, back over fifty was a little 184 00:08:02,120 --> 00:08:04,800 Speaker 5: bit gratifying. And the fact that you know that last 185 00:08:04,840 --> 00:08:07,200 Speaker 5: week's inflation rate for the for the for the euro 186 00:08:07,320 --> 00:08:10,440 Speaker 5: Area the lowest in almost in over two years actually, 187 00:08:10,760 --> 00:08:13,280 Speaker 5: And the fact that one of the big uber hawks herself, 188 00:08:13,320 --> 00:08:16,560 Speaker 5: you know, is a belish novel of the vice executive 189 00:08:16,720 --> 00:08:19,080 Speaker 5: board member of the ECB, actually said that you know, 190 00:08:19,120 --> 00:08:21,400 Speaker 5: when things change, she changes her mind. And that's something 191 00:08:21,560 --> 00:08:24,600 Speaker 5: huge coming from her, you know, some of the other hawks, 192 00:08:24,640 --> 00:08:26,320 Speaker 5: you know from the bundes Bank, and we haven't heard 193 00:08:26,320 --> 00:08:28,520 Speaker 5: from Austria recently, but you know, I think there's still 194 00:08:28,640 --> 00:08:30,840 Speaker 5: very more cautious on the outlook. But I'm still again 195 00:08:30,880 --> 00:08:34,280 Speaker 5: worried about when when the ECB will finally drop its 196 00:08:34,400 --> 00:08:37,640 Speaker 5: hawkish talents, and of course they still are surrounded by 197 00:08:37,640 --> 00:08:39,480 Speaker 5: wars over there as well, so that's a little bit worrying. 198 00:08:39,760 --> 00:08:42,880 Speaker 5: And of course the UK is actually interesting. The data 199 00:08:42,960 --> 00:08:44,800 Speaker 5: keep changing. You know a lot of revisions out there 200 00:08:44,800 --> 00:08:46,240 Speaker 5: that you know, and we're seeing a lot of change 201 00:08:46,480 --> 00:08:48,880 Speaker 5: signs changing on growth rates, which is kind of interesting. 202 00:08:49,200 --> 00:08:51,360 Speaker 4: But the UK is not looking as bad. 203 00:08:51,160 --> 00:08:53,520 Speaker 5: As I would have expected a year ago, so a 204 00:08:53,520 --> 00:08:54,920 Speaker 5: bit more encouraged on that front. 205 00:08:55,600 --> 00:08:57,560 Speaker 6: We only have about a minute left. But if you 206 00:08:57,559 --> 00:09:00,160 Speaker 6: were able to ask FED Chair Jerome Pala question is 207 00:09:00,200 --> 00:09:03,679 Speaker 6: press conference next week following the Federal Reserve's decision, what 208 00:09:03,679 --> 00:09:05,080 Speaker 6: would you ask him? 209 00:09:05,440 --> 00:09:08,800 Speaker 5: I would say, sir, with all due respect, if assuming 210 00:09:08,840 --> 00:09:11,160 Speaker 5: no one's in the room, just tell me what exactly 211 00:09:11,200 --> 00:09:13,160 Speaker 5: is it going to take before you're going to start 212 00:09:13,200 --> 00:09:16,160 Speaker 5: talking about great cuts? What will it taken? Tell me 213 00:09:16,200 --> 00:09:17,920 Speaker 5: all the factors. I can put them on my little 214 00:09:17,960 --> 00:09:19,000 Speaker 5: checklist and check them off. 215 00:09:19,760 --> 00:09:21,280 Speaker 3: What do you think should be on top of that list? 216 00:09:23,280 --> 00:09:26,120 Speaker 5: How many months of CPI do you need to you know, 217 00:09:26,400 --> 00:09:28,640 Speaker 5: and how much does it need to go down for 218 00:09:29,000 --> 00:09:30,920 Speaker 5: the three months and the six month annualized rate before 219 00:09:30,960 --> 00:09:33,400 Speaker 5: you can start saying Okay, forget it, We're done. We 220 00:09:33,480 --> 00:09:36,240 Speaker 5: are completely you know, I'll complete at this point, and 221 00:09:36,240 --> 00:09:38,200 Speaker 5: I want to see what he thinks about for wages 222 00:09:38,240 --> 00:09:43,320 Speaker 5: as well on the demographic front, and you know unemployment generally, 223 00:09:43,360 --> 00:09:45,079 Speaker 5: you know, how how much how much do you want 224 00:09:45,080 --> 00:09:48,600 Speaker 5: the unemployment rate to rise by in order to say 225 00:09:48,600 --> 00:09:49,640 Speaker 5: that you are finally finished? 226 00:09:50,120 --> 00:09:52,280 Speaker 2: Jennifer, thanks so much for joining us. Always appreciate getting 227 00:09:52,320 --> 00:09:55,120 Speaker 2: a few minutes of your time, Jennifer Lee. She is 228 00:09:55,160 --> 00:09:59,200 Speaker 2: a senior economist and the managing director at ABMO Capital 229 00:09:59,240 --> 00:10:02,520 Speaker 2: Markets up there in Canada. Always appreciate getting a few 230 00:10:02,520 --> 00:10:03,800 Speaker 2: minutes of Jennifer's time. 231 00:10:03,840 --> 00:10:04,160 Speaker 3: Here. 232 00:10:05,600 --> 00:10:08,360 Speaker 7: You're listening to the team. Ken's a our live program, 233 00:10:08,480 --> 00:10:12,440 Speaker 7: Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, 234 00:10:12,520 --> 00:10:15,679 Speaker 7: the iHeartRadio app, and the Bloomberg Business App, or listen 235 00:10:15,720 --> 00:10:17,840 Speaker 7: on demand wherever you get your podcasts. 236 00:10:19,880 --> 00:10:23,000 Speaker 2: Let's talk about private credit certainly a big, big issue 237 00:10:24,120 --> 00:10:26,120 Speaker 2: for us here. We like talking about it because we 238 00:10:26,160 --> 00:10:29,600 Speaker 2: see the growth in private equity is just so extraordinary. 239 00:10:30,480 --> 00:10:33,920 Speaker 6: I guess we'll credits around one half trill. 240 00:10:34,960 --> 00:10:37,720 Speaker 2: Yeah, and it really took off after the Great Financial 241 00:10:37,760 --> 00:10:40,400 Speaker 2: Crisis when the bank started pulling back here. So, uh, 242 00:10:40,480 --> 00:10:42,640 Speaker 2: let's talk to somebody who plays in this part of 243 00:10:42,640 --> 00:10:46,320 Speaker 2: the sandbox. Hugh van steinas vice chair and partnered Oliver Wyman. 244 00:10:46,600 --> 00:10:48,680 Speaker 2: He joins us, Hugh, can you give us kind of 245 00:10:48,800 --> 00:10:52,920 Speaker 2: your view of where we are on the private credit 246 00:10:53,120 --> 00:10:54,160 Speaker 2: boom out there? 247 00:10:54,360 --> 00:10:56,960 Speaker 3: Is it overdone? Is at a healthy market? 248 00:10:56,960 --> 00:10:59,280 Speaker 2: How do you think about the evolution and the growth 249 00:10:59,280 --> 00:10:59,920 Speaker 2: of private credit? 250 00:11:01,240 --> 00:11:02,520 Speaker 8: Well, Paul, thanks for having me on. 251 00:11:02,760 --> 00:11:02,880 Speaker 5: Now. 252 00:11:02,920 --> 00:11:05,480 Speaker 9: Look, I think there's a big runway still to come 253 00:11:05,520 --> 00:11:08,040 Speaker 9: in terms of private credit, and I think it's driven 254 00:11:08,080 --> 00:11:09,720 Speaker 9: by a couple of things. I mean, first, as you 255 00:11:09,840 --> 00:11:12,000 Speaker 9: just said Paul, when you laid it out, the banks 256 00:11:12,040 --> 00:11:13,599 Speaker 9: have been obviously on a bit of a diet in 257 00:11:13,640 --> 00:11:15,719 Speaker 9: the last decade, and that's really advantage some of the 258 00:11:15,760 --> 00:11:18,720 Speaker 9: private credit players. But I think there's another diet to come. 259 00:11:18,960 --> 00:11:21,600 Speaker 9: If you look at the FED proposals, the FED may 260 00:11:21,640 --> 00:11:23,400 Speaker 9: be asking the banks to take as much as a 261 00:11:23,480 --> 00:11:27,640 Speaker 9: thirty five percent increasing capital for their investment banking businesses. Now, 262 00:11:27,720 --> 00:11:29,800 Speaker 9: I'm sure it's going to get watered down, but that's 263 00:11:29,840 --> 00:11:33,040 Speaker 9: an enormous squeeze, which means the banks need shared assets. 264 00:11:33,559 --> 00:11:35,760 Speaker 9: And then secondly, you know obviously had mark grown from 265 00:11:35,760 --> 00:11:39,600 Speaker 9: Apollo on earlier today. I think also the regional banks 266 00:11:39,600 --> 00:11:42,120 Speaker 9: in the States have really got some issues and are 267 00:11:42,160 --> 00:11:45,400 Speaker 9: selling assets at quite good good prices too, So there's 268 00:11:45,440 --> 00:11:48,480 Speaker 9: an opportunity set of bank shedding assets and on the 269 00:11:48,520 --> 00:11:51,560 Speaker 9: other hand, clients just desperate for yield. There's biggest source 270 00:11:51,600 --> 00:11:54,400 Speaker 9: of inflos this year is into private credit, you know, 271 00:11:55,040 --> 00:11:57,600 Speaker 9: as Jess was just saying, it's grown wildly, but it 272 00:11:57,679 --> 00:11:59,520 Speaker 9: might double again in the next two to three years. 273 00:11:59,600 --> 00:12:02,600 Speaker 9: So for the moment, I actually think the conditions remain 274 00:12:02,920 --> 00:12:05,800 Speaker 9: very ripe and a really good year for opportunities. 275 00:12:06,080 --> 00:12:08,800 Speaker 6: Do you see any sort of red flags brewing within 276 00:12:08,880 --> 00:12:11,559 Speaker 6: the private credit market at this point? 277 00:12:12,720 --> 00:12:13,640 Speaker 8: No, it's a great question. 278 00:12:13,720 --> 00:12:16,160 Speaker 9: So look, as a long time bank sell list, any 279 00:12:16,240 --> 00:12:19,720 Speaker 9: asset which any market which grows too fast always creates 280 00:12:19,720 --> 00:12:22,079 Speaker 9: at least an amber flag if not read Look, there's 281 00:12:22,080 --> 00:12:26,360 Speaker 9: a bit of frothiness, particularly look around leverage lending prices 282 00:12:26,360 --> 00:12:27,199 Speaker 9: are becoming tighter. 283 00:12:27,720 --> 00:12:29,240 Speaker 8: That area is really heavily bid. 284 00:12:29,960 --> 00:12:32,880 Speaker 9: For the note we put out last week, I work 285 00:12:32,960 --> 00:12:36,439 Speaker 9: through that twenty eight traditional asset managers have either bought 286 00:12:36,520 --> 00:12:39,360 Speaker 9: another private credit firm or set one up themselves, So 287 00:12:39,400 --> 00:12:42,839 Speaker 9: there's clearly a bit of frothiness around the leverage lending area. 288 00:12:43,120 --> 00:12:44,480 Speaker 9: But if I look at the kind of off the 289 00:12:44,559 --> 00:12:48,240 Speaker 9: run deals, whether it's buying bank assets, whether it's more 290 00:12:48,400 --> 00:12:52,320 Speaker 9: esoteric lending, it still looks quite an attractive spread. So 291 00:12:52,800 --> 00:12:55,160 Speaker 9: I think the leverage lending is probably the area to 292 00:12:55,160 --> 00:12:57,560 Speaker 9: look at. And then the second one, of course, is 293 00:12:59,080 --> 00:13:02,400 Speaker 9: who's the right buyers? Are the buyers ones who understand 294 00:13:02,480 --> 00:13:05,079 Speaker 9: this is the long term asset because you're basically getting 295 00:13:05,080 --> 00:13:07,320 Speaker 9: assets which used to be run by a bank but 296 00:13:07,360 --> 00:13:09,120 Speaker 9: are now going to get run by a fun manager. 297 00:13:09,440 --> 00:13:11,960 Speaker 9: You know, do they have the right skills to work out? 298 00:13:12,280 --> 00:13:15,120 Speaker 9: Do they understand this assets can be liquid? And as 299 00:13:15,120 --> 00:13:17,600 Speaker 9: ever in life, you know, we hope that the right 300 00:13:17,640 --> 00:13:19,680 Speaker 9: buyers by the right assets, but that doesn't always happen. 301 00:13:19,679 --> 00:13:21,480 Speaker 8: So that's another area that I'm very watchful for. 302 00:13:22,480 --> 00:13:25,480 Speaker 2: Hugh, Why do you think the banks are allowing this 303 00:13:25,559 --> 00:13:27,080 Speaker 2: to happen? I mean, when I was at the Chaseman 304 00:13:27,120 --> 00:13:29,640 Speaker 2: Hand Bank, we made a lot of money in our 305 00:13:29,720 --> 00:13:32,280 Speaker 2: leverage lending business. I'm not going to let that business 306 00:13:32,480 --> 00:13:34,839 Speaker 2: go to the private market. What's happening on the other 307 00:13:34,880 --> 00:13:35,560 Speaker 2: side of the street. 308 00:13:36,400 --> 00:13:38,840 Speaker 9: Yeah, you know, it's a great question, and it's It 309 00:13:38,920 --> 00:13:41,920 Speaker 9: is extraordinary that you're getting even some of the US's 310 00:13:42,040 --> 00:13:45,320 Speaker 9: largest banks setting up new private credit units. It's really 311 00:13:45,400 --> 00:13:48,800 Speaker 9: a consequence of regulation, you know, the FARED or in 312 00:13:48,800 --> 00:13:52,040 Speaker 9: Europe the ECB are trying to jack up the capital 313 00:13:52,200 --> 00:13:55,560 Speaker 9: charges to hold leverage loans on the balance sheet. But 314 00:13:55,600 --> 00:13:58,240 Speaker 9: it's not also even just holding them, it's also the 315 00:13:58,280 --> 00:14:00,720 Speaker 9: trading of them. Now, you know, as you know, and 316 00:14:00,760 --> 00:14:03,520 Speaker 9: you've spoken about in the last few months, you know, 317 00:14:03,520 --> 00:14:06,680 Speaker 9: there's an intense battle and negotia oh sorry, a discussion 318 00:14:06,720 --> 00:14:08,679 Speaker 9: going on between the banks and the FED about what 319 00:14:08,760 --> 00:14:11,320 Speaker 9: is the right level of capital for the risks they're running. 320 00:14:11,520 --> 00:14:14,040 Speaker 9: And the large banks clearly think that they've got sufficient capital. 321 00:14:14,920 --> 00:14:16,720 Speaker 9: But if the FED were to apply the rules as 322 00:14:16,760 --> 00:14:20,480 Speaker 9: they're currently proposed, as I said, it's a thirty five 323 00:14:20,480 --> 00:14:24,400 Speaker 9: percent increase that's so ginormous, the banks will clearly need 324 00:14:24,440 --> 00:14:28,080 Speaker 9: to trim their sheets, shed some assets, be more thoughtful 325 00:14:28,080 --> 00:14:29,320 Speaker 9: about the marginal loan they make. 326 00:14:29,480 --> 00:14:32,400 Speaker 8: So I think you're right, Paul. It's been a great business. 327 00:14:32,680 --> 00:14:35,000 Speaker 9: It should be a great business, but it depends it's 328 00:14:35,040 --> 00:14:37,000 Speaker 9: kind of in the gift now of what the FED 329 00:14:37,040 --> 00:14:37,320 Speaker 9: will do. 330 00:14:37,840 --> 00:14:40,320 Speaker 6: Talk to us about the market for private corporate loans, 331 00:14:40,360 --> 00:14:43,760 Speaker 6: because right now they're facing obviously a very high rate 332 00:14:43,920 --> 00:14:47,200 Speaker 6: environment for the first time since they really boomed in popularity. 333 00:14:47,320 --> 00:14:49,320 Speaker 6: What do you think this means next year? Because even 334 00:14:49,360 --> 00:14:52,280 Speaker 6: if the Federal Reserve holds off on raising interest rates, 335 00:14:52,440 --> 00:14:55,160 Speaker 6: rates are still very elevated. How does that impact that 336 00:14:55,200 --> 00:14:56,560 Speaker 6: particular quarter of the market. 337 00:14:57,640 --> 00:15:00,520 Speaker 9: No, Look, I think that is a really good question because, look, 338 00:15:00,720 --> 00:15:03,800 Speaker 9: because the debt is mostly floating rate notes, so in 339 00:15:03,840 --> 00:15:07,840 Speaker 9: other words, it's been passed on to the corporate directly. Look, 340 00:15:07,880 --> 00:15:11,160 Speaker 9: as financing costs normalize, some of the weaker balance sheets 341 00:15:11,160 --> 00:15:13,320 Speaker 9: can be exposed. And you've started to see that even 342 00:15:13,320 --> 00:15:15,240 Speaker 9: in public markets in the last three or four months. 343 00:15:15,640 --> 00:15:18,760 Speaker 9: The trade between the stronger sheets and weaker sheets, even 344 00:15:18,800 --> 00:15:21,360 Speaker 9: in the in the SMP has been quite pronounced, i'd 345 00:15:21,400 --> 00:15:24,720 Speaker 9: say since since June. But you're starting to see that 346 00:15:25,000 --> 00:15:27,960 Speaker 9: move through the private credit market. You know, is it possible, 347 00:15:28,640 --> 00:15:31,840 Speaker 9: It would be surprising if there won't be some challenges 348 00:15:31,880 --> 00:15:33,680 Speaker 9: for a couple of the some of the borrowers. 349 00:15:34,360 --> 00:15:35,720 Speaker 8: And I think that's also you. 350 00:15:35,680 --> 00:15:39,600 Speaker 9: Know why the larger players will need to know can 351 00:15:39,640 --> 00:15:41,880 Speaker 9: they work out the asset, can they rearrange the debts? 352 00:15:41,960 --> 00:15:44,080 Speaker 9: You know, do they want to how do they bail 353 00:15:44,120 --> 00:15:47,280 Speaker 9: inequity if they need to? And I think that restructuring 354 00:15:47,320 --> 00:15:50,120 Speaker 9: element is going to become probably into the second half 355 00:15:50,120 --> 00:15:53,000 Speaker 9: of next year and beyond start to become more notable. 356 00:15:53,400 --> 00:15:56,560 Speaker 9: But you know, the current credit dynamics that we're seeing 357 00:15:56,560 --> 00:15:59,120 Speaker 9: in these portfolios, and admittedly the data could be better, 358 00:15:59,160 --> 00:16:00,560 Speaker 9: but from what we can see at the moment, they're 359 00:16:00,600 --> 00:16:02,480 Speaker 9: still performing quite well. Q. 360 00:16:02,760 --> 00:16:05,520 Speaker 2: I mean, I guess my experience is looking at this 361 00:16:05,680 --> 00:16:09,360 Speaker 2: marketplace that it's been very successful, but it's been focused 362 00:16:09,360 --> 00:16:11,320 Speaker 2: primarily on the middle market lending. 363 00:16:11,520 --> 00:16:13,040 Speaker 3: Do you expect to see these. 364 00:16:12,880 --> 00:16:16,880 Speaker 2: Private credit funds right, bigger and bigger checks going forward? 365 00:16:18,120 --> 00:16:21,920 Speaker 8: Yeah, so definitely we're seeing larger checks. 366 00:16:21,920 --> 00:16:23,760 Speaker 9: So, look, you've seen a four point eight dollars deal, 367 00:16:23,760 --> 00:16:25,840 Speaker 9: You've seen a four point nine billion dollar deal this year, 368 00:16:25,960 --> 00:16:28,120 Speaker 9: I mean, which would be unthinkable even. 369 00:16:27,920 --> 00:16:31,080 Speaker 8: Five years ago alone, let alone beyond that. 370 00:16:31,640 --> 00:16:34,400 Speaker 9: So you're definitely seeing Look, you know, in what I 371 00:16:34,400 --> 00:16:36,600 Speaker 9: think one of the most interesting features of finance is 372 00:16:36,640 --> 00:16:40,160 Speaker 9: how the winner takes. Most dynamic that you see in 373 00:16:40,280 --> 00:16:43,800 Speaker 9: tech and other parts is coming into finance too. You've 374 00:16:43,800 --> 00:16:46,680 Speaker 9: seen it in the big banks, You've seen it in 375 00:16:47,160 --> 00:16:49,680 Speaker 9: also some of the big asset managers, and that kind 376 00:16:49,720 --> 00:16:51,960 Speaker 9: of winner takes most dynamic is coming. 377 00:16:51,840 --> 00:16:52,760 Speaker 8: To private credit too. 378 00:16:53,120 --> 00:16:56,320 Speaker 9: So look, the top ten private credit players represent about 379 00:16:56,320 --> 00:16:58,480 Speaker 9: forty percent of the fundraising of the last twenty four 380 00:16:58,520 --> 00:17:01,320 Speaker 9: months and if anything, it looks like it's going higher now. 381 00:17:01,360 --> 00:17:05,080 Speaker 9: That means they can take on bigger loans, as you said, Paul, 382 00:17:05,359 --> 00:17:08,240 Speaker 9: but also it means that if you've got a you know, 383 00:17:08,280 --> 00:17:11,000 Speaker 9: a mid cap bank who maybe you know has got 384 00:17:11,080 --> 00:17:14,200 Speaker 9: some of the lending facilities from the from the FED 385 00:17:14,520 --> 00:17:16,360 Speaker 9: that they introduced around the you know, the regional bank 386 00:17:16,440 --> 00:17:19,159 Speaker 9: termoil earlier this year, if they need to shed a 387 00:17:19,160 --> 00:17:23,160 Speaker 9: few assets to you know, deleverage their balance sheet, they're 388 00:17:23,160 --> 00:17:24,600 Speaker 9: going to go to one of these top ten, top 389 00:17:24,640 --> 00:17:27,440 Speaker 9: fifteen firms. So it's not just mid market lending, it's 390 00:17:27,520 --> 00:17:31,440 Speaker 9: it's the larger firms are doing much more taking opportunities 391 00:17:31,560 --> 00:17:35,040 Speaker 9: or quirky off the run portfolios from banks. And as 392 00:17:35,080 --> 00:17:37,040 Speaker 9: you saw that with with with with Credit Suite some 393 00:17:37,119 --> 00:17:39,119 Speaker 9: earlier in the year or last year, I think this 394 00:17:39,200 --> 00:17:41,800 Speaker 9: is actually a really interesting seam for some of the 395 00:17:41,840 --> 00:17:42,879 Speaker 9: more skillful players. 396 00:17:43,119 --> 00:17:47,439 Speaker 6: Private debt was supposed to struggle when borring casts were rising, 397 00:17:47,440 --> 00:17:49,920 Speaker 6: but that didn't happen. What was the catalyst to make 398 00:17:49,960 --> 00:17:53,240 Speaker 6: it as successful as it has become in recent years. 399 00:17:54,920 --> 00:17:56,720 Speaker 9: Losh, that's a good question, Jess, because I suppose in 400 00:17:56,760 --> 00:17:59,600 Speaker 9: a way we've only look, this is the sharpest rate 401 00:17:59,640 --> 00:18:02,920 Speaker 9: cycle what since seventy nine eighty one, but it's only 402 00:18:02,960 --> 00:18:04,800 Speaker 9: really in the last twelve months it's really kicked in. 403 00:18:04,920 --> 00:18:07,880 Speaker 9: So to be humble, Jess, we haven't yet seen the 404 00:18:07,920 --> 00:18:11,000 Speaker 9: full seasoned impact rates. 405 00:18:11,240 --> 00:18:12,240 Speaker 8: Yeah, we haven't got there years. 406 00:18:12,280 --> 00:18:15,240 Speaker 9: Yeah, as Tom mkkeepe telling me, it's the long and variables, 407 00:18:15,240 --> 00:18:19,000 Speaker 9: isn't it trip you up? And I don't think we've 408 00:18:19,040 --> 00:18:20,640 Speaker 9: got there yet. So to be honest, Jess, I don't 409 00:18:20,640 --> 00:18:22,800 Speaker 9: think you see the evidence. So that's where look, if 410 00:18:22,800 --> 00:18:25,960 Speaker 9: you want to be bearish, you can say these season 411 00:18:26,080 --> 00:18:29,000 Speaker 9: cost coming through will start to be more problematic for 412 00:18:29,080 --> 00:18:31,360 Speaker 9: some of the mid market firms, particularly if they don't 413 00:18:31,400 --> 00:18:35,920 Speaker 9: have other sources of debt available. And in particular, let's 414 00:18:35,960 --> 00:18:38,359 Speaker 9: be clear, some of the regional banks in the States. 415 00:18:38,440 --> 00:18:42,000 Speaker 9: You can see the latest FED lending surveys and loans, 416 00:18:42,200 --> 00:18:45,960 Speaker 9: you know, lending rates are slowing quite materially, and so 417 00:18:46,000 --> 00:18:47,439 Speaker 9: it's not like the banks are going to pick up 418 00:18:47,440 --> 00:18:50,000 Speaker 9: the slacks, so they're going to be more dependent upon 419 00:18:50,040 --> 00:18:54,480 Speaker 9: private credit. Look, I think the like with all of 420 00:18:54,480 --> 00:18:58,399 Speaker 9: the economy we've seen corporates and households, I'm into this 421 00:18:58,480 --> 00:19:01,160 Speaker 9: with a much stronger balance sheet, right, and that's really 422 00:19:01,200 --> 00:19:02,240 Speaker 9: why it's taking over longer. 423 00:19:02,440 --> 00:19:04,560 Speaker 3: All right, Thank you so much for joining us, great 424 00:19:04,560 --> 00:19:05,160 Speaker 3: great stuff. 425 00:19:05,359 --> 00:19:07,320 Speaker 2: I appreciate getting a few minutes of your time. Hugh 426 00:19:07,440 --> 00:19:10,960 Speaker 2: van steinas vice chair and partner at Oliver Wyman. 427 00:19:11,359 --> 00:19:14,480 Speaker 7: You're listening to the tape cats are live program Bloomberg 428 00:19:14,520 --> 00:19:18,119 Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the 429 00:19:18,200 --> 00:19:21,440 Speaker 7: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 430 00:19:21,440 --> 00:19:24,280 Speaker 7: You can also listen live on Amazon Alexa from our 431 00:19:24,280 --> 00:19:29,360 Speaker 7: flagship New York station, Just Say Alexa Play Bloomberg eleven thirty. 432 00:19:30,040 --> 00:19:31,639 Speaker 2: Jess Met and Paul Sweeney were live here on a 433 00:19:31,640 --> 00:19:35,240 Speaker 2: Bloomberg Director Brokers Studio streaming live as well on YouTube 434 00:19:35,240 --> 00:19:38,919 Speaker 2: stag Head over to YouTube dot com and search Bloomberg Radio. 435 00:19:39,040 --> 00:19:42,360 Speaker 2: Adding to my argument, my widely held argument here by 436 00:19:42,400 --> 00:19:45,080 Speaker 2: me that pound for pounds, some of the best money 437 00:19:45,080 --> 00:19:49,640 Speaker 2: managers are in Milwaukee, Wisconsin. Is our next guest, Tom Pogner. 438 00:19:49,760 --> 00:19:51,400 Speaker 2: It is I don't know what they're doing out there. 439 00:19:51,480 --> 00:19:54,960 Speaker 2: Tom Agner, Senior portfolio manager managing director at all Spring 440 00:19:55,160 --> 00:19:57,800 Speaker 2: Global Investments. It will always be strong funds for me 441 00:19:58,040 --> 00:20:00,360 Speaker 2: with Tom. Tom, thanks so much for joining us here. 442 00:20:00,359 --> 00:20:02,200 Speaker 2: My friend talk to us about this market. We had 443 00:20:02,240 --> 00:20:05,879 Speaker 2: a ripping November mark it up over eight percent, yields 444 00:20:05,920 --> 00:20:10,160 Speaker 2: coming down dramatically. Was that it? I mean, we where 445 00:20:10,160 --> 00:20:11,040 Speaker 2: where do we go from here? 446 00:20:12,160 --> 00:20:14,560 Speaker 10: Yeah, hey, Paul, great to talk to you again, and yeah, 447 00:20:14,560 --> 00:20:16,040 Speaker 10: those were the good old days. 448 00:20:16,720 --> 00:20:17,560 Speaker 8: The boy. 449 00:20:17,600 --> 00:20:20,360 Speaker 10: It sure seems like we're playing into even the data 450 00:20:20,440 --> 00:20:23,520 Speaker 10: this morning, this Goldly Locke scenario. And I think one 451 00:20:23,560 --> 00:20:25,200 Speaker 10: of the things I try and do it which I 452 00:20:25,520 --> 00:20:28,040 Speaker 10: think you always did, which is look over the credit 453 00:20:28,040 --> 00:20:31,119 Speaker 10: markets and see what they're telling us. And you know, 454 00:20:31,160 --> 00:20:34,240 Speaker 10: after touching five percent, the ten years been ripping downward. 455 00:20:34,320 --> 00:20:37,240 Speaker 10: And I think even more importantly for US equity investors, 456 00:20:37,320 --> 00:20:40,800 Speaker 10: credit spreads are hitting new lows for the year, and 457 00:20:41,119 --> 00:20:42,760 Speaker 10: I think I was looking at it this morning. I 458 00:20:42,800 --> 00:20:45,000 Speaker 10: think we're all the way back to pre COVID levels 459 00:20:45,040 --> 00:20:48,760 Speaker 10: on credit spreads, which means investor risk appetite is up, 460 00:20:49,000 --> 00:20:51,000 Speaker 10: which is a good thing for equities and a good 461 00:20:51,000 --> 00:20:53,240 Speaker 10: thing if you're a growth investor, so what are. 462 00:20:53,200 --> 00:20:56,000 Speaker 6: You advising clients to buy and sell? 463 00:20:57,520 --> 00:20:59,600 Speaker 10: Yeah, so we've been telling them, you know, don't miss out. 464 00:20:59,640 --> 00:21:03,040 Speaker 10: I know it's been a magnificent seven year, and you 465 00:21:03,040 --> 00:21:05,399 Speaker 10: know we've participated with that. We own a lot of 466 00:21:05,440 --> 00:21:09,439 Speaker 10: those stocks, but we've we've had smaller mid cap stocks 467 00:21:09,480 --> 00:21:13,520 Speaker 10: in the portfolio in trying to find opportunities there. We 468 00:21:13,560 --> 00:21:17,760 Speaker 10: feel like that probably is the biggest misnomer from an 469 00:21:17,800 --> 00:21:22,439 Speaker 10: evaluation standpoint in the market today. They don't do as 470 00:21:22,440 --> 00:21:24,919 Speaker 10: well when rates are going up, but if rates continue 471 00:21:24,960 --> 00:21:26,760 Speaker 10: to go down, as we've seen over the last week 472 00:21:26,840 --> 00:21:30,480 Speaker 10: or two, you can see small MidCap stocks really participate 473 00:21:30,560 --> 00:21:33,199 Speaker 10: in this rally. And I think that's an opportunity. And 474 00:21:33,240 --> 00:21:36,000 Speaker 10: then the other thing we've been telling them is, yes, 475 00:21:36,040 --> 00:21:41,440 Speaker 10: technology is important. We like technology stocks, but have diversification 476 00:21:41,520 --> 00:21:42,320 Speaker 10: in your portfolio. 477 00:21:42,880 --> 00:21:45,000 Speaker 2: So outside of tech, Tom, what do you think of 478 00:21:45,119 --> 00:21:47,720 Speaker 2: some areas are you? I guess some folks now, after 479 00:21:48,000 --> 00:21:49,840 Speaker 2: you know this year in the performance of the magnives 480 00:21:49,840 --> 00:21:51,800 Speaker 2: and seven, they're saying, boy, do I ride these things? 481 00:21:51,840 --> 00:21:54,080 Speaker 2: Do I try to chase them? Or do I just 482 00:21:54,080 --> 00:21:56,320 Speaker 2: say I missed that trade? Now let me go find 483 00:21:56,359 --> 00:21:58,919 Speaker 2: some other good names and maybe have not participated in 484 00:21:58,960 --> 00:22:00,800 Speaker 2: twenty twenty three. 485 00:22:01,320 --> 00:22:03,639 Speaker 10: Yeah, we would be barbelling it. So again, I wouldn't 486 00:22:03,680 --> 00:22:05,400 Speaker 10: be out of those names. I think a lot of them. 487 00:22:05,560 --> 00:22:07,760 Speaker 10: You know. Actually, like an Nvidia is trading at the 488 00:22:07,840 --> 00:22:11,000 Speaker 10: lowest PE evaluation it has in five years. People are 489 00:22:11,080 --> 00:22:13,840 Speaker 10: doubting the sustainability of the earnings that have been generating. 490 00:22:14,880 --> 00:22:18,440 Speaker 10: Even if you look over at Amazon trading about fourteen 491 00:22:18,480 --> 00:22:21,240 Speaker 10: times enterprise value to EBITDAH, you know, relative to some 492 00:22:21,280 --> 00:22:24,520 Speaker 10: of the big media companies, relative to Apple, which trades 493 00:22:24,560 --> 00:22:28,119 Speaker 10: at you know, well north of twenty times EBITDA, we think, 494 00:22:28,320 --> 00:22:31,680 Speaker 10: you know, there's still opportunities there. And then but I think, yeah, 495 00:22:31,720 --> 00:22:34,440 Speaker 10: go down the market cap, look at places like healthcare, 496 00:22:34,480 --> 00:22:36,160 Speaker 10: look at some of the things that kind of got 497 00:22:36,160 --> 00:22:40,280 Speaker 10: destroyed during this GLP one phenomenon, which we agree with, 498 00:22:40,480 --> 00:22:44,480 Speaker 10: like there's no doubt that that is going to impact healthcare, 499 00:22:44,800 --> 00:22:46,919 Speaker 10: but it's not going to really destroy the models of 500 00:22:46,960 --> 00:22:50,120 Speaker 10: other companies. And we think there are opportunities in small 501 00:22:50,160 --> 00:22:54,080 Speaker 10: and MidCap healthcare, in particular in medtech. And one of 502 00:22:54,080 --> 00:22:55,919 Speaker 10: the things that I think is really interesting is you 503 00:22:55,960 --> 00:22:58,560 Speaker 10: listen to some of these conference calls of companies like 504 00:22:58,600 --> 00:23:00,760 Speaker 10: A J and J. They are talking about ramping up 505 00:23:00,760 --> 00:23:04,119 Speaker 10: the M and A playbook again and that can be 506 00:23:04,240 --> 00:23:06,840 Speaker 10: very good if you in the small MidCap space. 507 00:23:07,400 --> 00:23:09,480 Speaker 6: You also sent us a list of stocks, one of 508 00:23:09,480 --> 00:23:13,880 Speaker 6: them Amazon on here and we're talking about megacap stocks here. 509 00:23:13,920 --> 00:23:15,639 Speaker 6: What is it about Amazon that you like? 510 00:23:17,119 --> 00:23:19,160 Speaker 10: Well, part of it is they've gotten the religion right. 511 00:23:19,240 --> 00:23:20,800 Speaker 10: So they brought in and I don't think it was 512 00:23:20,840 --> 00:23:22,720 Speaker 10: a huge surprise to us, but you want to see 513 00:23:22,760 --> 00:23:25,840 Speaker 10: the execution they brought in. The CEO came over from 514 00:23:25,880 --> 00:23:29,399 Speaker 10: the AWS side. AWS historically has run twenty five thirty 515 00:23:29,440 --> 00:23:34,280 Speaker 10: percent EBITDA margins, pretty healthy margins for that business. We 516 00:23:34,320 --> 00:23:37,159 Speaker 10: don't think the retail side gets anywhere near there, but 517 00:23:37,640 --> 00:23:39,840 Speaker 10: you know, getting it up from negative to zero to 518 00:23:41,080 --> 00:23:44,359 Speaker 10: you know, pushing mid single digits now, we think that 519 00:23:44,560 --> 00:23:47,600 Speaker 10: is a good opportunity. We think the data center AWS 520 00:23:47,680 --> 00:23:51,680 Speaker 10: business is bottom out of growth at twelve thirteen percent. 521 00:23:52,160 --> 00:23:56,359 Speaker 10: We know AI sucks, takes up a lot of data 522 00:23:56,359 --> 00:24:01,320 Speaker 10: center space, and we we think Amazon, you know, is 523 00:24:01,359 --> 00:24:03,359 Speaker 10: a good play on that. And that's again one that 524 00:24:03,400 --> 00:24:06,359 Speaker 10: we think is a reasonable evaluation, even with a pretty 525 00:24:06,359 --> 00:24:07,520 Speaker 10: good move it's had this year. 526 00:24:07,760 --> 00:24:10,920 Speaker 6: Yeah, up more than seventy percent here today Paul Amz 527 00:24:11,080 --> 00:24:11,880 Speaker 6: and the ticker on MED. 528 00:24:12,320 --> 00:24:12,560 Speaker 7: Yeah. 529 00:24:12,600 --> 00:24:18,399 Speaker 2: Absolutely, yeah, absolutely, Hey, how do you view AI in general? 530 00:24:18,520 --> 00:24:21,440 Speaker 2: It just seems like it became a thing so so quickly, 531 00:24:21,880 --> 00:24:24,000 Speaker 2: and investors were just kind of clamoring and forgot, how 532 00:24:24,040 --> 00:24:27,240 Speaker 2: do they get some exposure here aside from Nvidia? How 533 00:24:27,280 --> 00:24:29,560 Speaker 2: do you view AI and do you have any exposure 534 00:24:29,600 --> 00:24:31,080 Speaker 2: there that you think is interesting? 535 00:24:32,560 --> 00:24:32,800 Speaker 7: Yeah? 536 00:24:32,840 --> 00:24:36,040 Speaker 10: I think you were believers, and so I actually spent 537 00:24:36,119 --> 00:24:38,960 Speaker 10: all last week talking to companies about it. I think 538 00:24:39,000 --> 00:24:42,159 Speaker 10: it's like eighty percent chance this is revolutionary, you know, 539 00:24:42,400 --> 00:24:45,040 Speaker 10: twenty percent chances this is kind of a normal net 540 00:24:45,080 --> 00:24:48,880 Speaker 10: secular shift within the technology space that that isn't as. 541 00:24:48,680 --> 00:24:49,280 Speaker 8: Big a deal. 542 00:24:49,400 --> 00:24:52,280 Speaker 10: But we're pretty big believers. We think the dollars are 543 00:24:52,320 --> 00:24:54,719 Speaker 10: flowing there. If you look at who's spending the dollars, 544 00:24:54,760 --> 00:24:58,920 Speaker 10: these are companies with who've historically been smart spenders, the Googles, 545 00:24:58,960 --> 00:25:02,520 Speaker 10: the Amazons, the meta of the world. And we think 546 00:25:02,560 --> 00:25:06,000 Speaker 10: it benefits not just in videos, and we do think 547 00:25:07,119 --> 00:25:09,399 Speaker 10: benefits and videos, but it's gonna start spilling over to 548 00:25:09,440 --> 00:25:13,000 Speaker 10: other companies, other semiconductor companies. We think as you go 549 00:25:13,000 --> 00:25:17,080 Speaker 10: into next generations, and a MD potentially benefits as you 550 00:25:17,119 --> 00:25:21,400 Speaker 10: move more into inference from training. We think power management 551 00:25:21,480 --> 00:25:25,919 Speaker 10: is extremely important and companies like a monolithic power plane 552 00:25:25,960 --> 00:25:29,240 Speaker 10: of that. And then we think database is extremely important 553 00:25:29,359 --> 00:25:31,480 Speaker 10: in data management, and there's gonna be a whole a 554 00:25:31,560 --> 00:25:34,920 Speaker 10: few different ways to play that. Our biggest position there 555 00:25:34,920 --> 00:25:37,359 Speaker 10: in the portfolio has been Mango dB. It's had a 556 00:25:37,400 --> 00:25:41,399 Speaker 10: great run this year, its valuation has come up and 557 00:25:41,880 --> 00:25:44,840 Speaker 10: lo and behold they actually report tonight. So I would 558 00:25:44,920 --> 00:25:48,919 Speaker 10: encourage people to wait and digest that news. But we 559 00:25:49,000 --> 00:25:53,320 Speaker 10: think the growth talent winds behind that business are being 560 00:25:53,359 --> 00:25:56,440 Speaker 10: underestimated and undervalued in the market, so we think it's 561 00:25:56,440 --> 00:25:58,960 Speaker 10: a good opportunity. But I would digest the new data 562 00:25:59,000 --> 00:25:59,760 Speaker 10: we're going to get tonight. 563 00:26:00,040 --> 00:26:02,680 Speaker 6: What are some stocks or industries that you don't want 564 00:26:02,720 --> 00:26:05,119 Speaker 6: to own? A good question. 565 00:26:05,240 --> 00:26:08,320 Speaker 10: I think we're still back and forth on consumer right. 566 00:26:09,040 --> 00:26:10,800 Speaker 10: I think the most recent data points have been a 567 00:26:10,840 --> 00:26:15,240 Speaker 10: little better. If you look at the projections for holiday spending, 568 00:26:15,280 --> 00:26:18,120 Speaker 10: they look pretty good this year, five to twelve percent, 569 00:26:18,480 --> 00:26:20,240 Speaker 10: which would be pretty healthy. I think we were at 570 00:26:20,240 --> 00:26:22,359 Speaker 10: three to four percent last year. I think it's you know, 571 00:26:22,440 --> 00:26:25,360 Speaker 10: so anything above above that would be healthy. I think 572 00:26:25,960 --> 00:26:29,560 Speaker 10: consumers are moving back to internet online spending, which should 573 00:26:29,560 --> 00:26:33,879 Speaker 10: benefit those types of companies again. And you know, I 574 00:26:33,920 --> 00:26:39,119 Speaker 10: think was mentioned prior to my segment here that you know, 575 00:26:39,280 --> 00:26:43,440 Speaker 10: even though the jolt S data is showing a bit 576 00:26:43,440 --> 00:26:45,479 Speaker 10: of a slowing in the job market, there's still one 577 00:26:45,480 --> 00:26:49,600 Speaker 10: point four job openings per job loss out there and 578 00:26:49,840 --> 00:26:52,440 Speaker 10: or job seekers, and so it's still a pretty healthy 579 00:26:52,520 --> 00:26:54,880 Speaker 10: environment if you're a consumer out there. And so it's 580 00:26:54,880 --> 00:26:57,560 Speaker 10: not the greatest, but it's not too bad. And so 581 00:26:57,640 --> 00:26:59,639 Speaker 10: I think there's a lot of back and forth there, 582 00:27:00,880 --> 00:27:04,040 Speaker 10: and so i'd say we're a little more agnostic in 583 00:27:04,080 --> 00:27:06,200 Speaker 10: that segment, and I'd say you definitely need to be 584 00:27:06,240 --> 00:27:09,240 Speaker 10: a little picky on what you're investing there. And then 585 00:27:09,280 --> 00:27:12,520 Speaker 10: i'd say the other that a little cautious on is 586 00:27:12,520 --> 00:27:15,600 Speaker 10: what's going on in the industrial segment. It's just we're 587 00:27:15,680 --> 00:27:20,400 Speaker 10: just hearing of increase tightening there, of companies pulling back 588 00:27:20,440 --> 00:27:22,560 Speaker 10: a bit. Europe seems like I don't think it's going 589 00:27:22,600 --> 00:27:25,040 Speaker 10: in recession, but that growth that had picked up a 590 00:27:25,080 --> 00:27:27,080 Speaker 10: little bit at the beginning of this year when we 591 00:27:27,119 --> 00:27:29,520 Speaker 10: talk to companies, sounds like it's kind of gone the 592 00:27:29,520 --> 00:27:32,560 Speaker 10: other way again. And that's that's you know, pushing kind 593 00:27:32,600 --> 00:27:34,760 Speaker 10: of zero percent growth and then China, to be fair, 594 00:27:34,760 --> 00:27:36,040 Speaker 10: has been disappointing all year. 595 00:27:36,240 --> 00:27:36,480 Speaker 7: Yep. 596 00:27:36,560 --> 00:27:38,880 Speaker 2: Absolutely, Hey Tom, thanks so much for taking a time. 597 00:27:38,920 --> 00:27:41,440 Speaker 2: Really appreciate chatting with you. Tom Agner. He's a senior 598 00:27:41,480 --> 00:27:44,920 Speaker 2: portfolio manager. He's a managing director over at Afspring Offspring 599 00:27:44,920 --> 00:27:49,480 Speaker 2: Global Advisors, based just outside of Milwaukee, Wisconsin. Appreciate checking 600 00:27:49,480 --> 00:27:50,000 Speaker 2: in with him. 601 00:27:50,400 --> 00:27:53,480 Speaker 7: You're listening to the tape kens our live program Bloomberg 602 00:27:53,600 --> 00:27:57,199 Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the 603 00:27:57,240 --> 00:28:00,440 Speaker 7: tune in app, Bloomberg dot com, and the Bloomberg App. 604 00:28:00,520 --> 00:28:03,320 Speaker 7: You can also listen live on Amazon Alexa from our 605 00:28:03,359 --> 00:28:08,400 Speaker 7: flagship New York station, Just Say Alexa playing Bloomberg eleven thirty. 606 00:28:09,640 --> 00:28:13,320 Speaker 2: Jessica bought a new car recently, twenty twenty four version. 607 00:28:13,359 --> 00:28:17,400 Speaker 2: It's first new car I bought since twenty fourteen. And 608 00:28:17,440 --> 00:28:21,480 Speaker 2: what I noticed is it's basically a technology platform with 609 00:28:21,600 --> 00:28:25,960 Speaker 2: four wheels. It's software, it's point and click, It's basically 610 00:28:26,000 --> 00:28:27,240 Speaker 2: your iPhone. 611 00:28:26,960 --> 00:28:28,080 Speaker 3: With four wheels. 612 00:28:27,880 --> 00:28:31,440 Speaker 2: It's not so much about the car, is about the technology. 613 00:28:32,359 --> 00:28:34,399 Speaker 3: And I'm wondering, like, who are these people behind all 614 00:28:34,440 --> 00:28:36,480 Speaker 3: this stuff? Like who does all this, We're. 615 00:28:36,320 --> 00:28:38,240 Speaker 2: About to find out. Phil Jale he joins us. He's 616 00:28:38,280 --> 00:28:42,720 Speaker 2: the CFO of e carts, the Nasdaq traded company e 617 00:28:43,040 --> 00:28:46,960 Speaker 2: c X is the ticker based in China. Phil, thanks 618 00:28:47,000 --> 00:28:49,680 Speaker 2: so much for joining us here via zoom here tell 619 00:28:49,760 --> 00:28:51,640 Speaker 2: us just give us a thirty thousand foot view. What 620 00:28:51,680 --> 00:28:53,960 Speaker 2: do you guys do at e car x? 621 00:28:55,440 --> 00:28:57,240 Speaker 11: Thank you Paul for having me here. At least it's 622 00:28:57,240 --> 00:29:02,080 Speaker 11: a Phil So Ihak's actually is a year in uh, 623 00:29:02,160 --> 00:29:06,000 Speaker 11: you know, in design and the development and delivery of 624 00:29:06,040 --> 00:29:09,080 Speaker 11: the best best of a breed of a copy digital 625 00:29:09,080 --> 00:29:10,240 Speaker 11: copyter solution. 626 00:29:10,360 --> 00:29:12,800 Speaker 12: As well as the full stack of software. 627 00:29:12,680 --> 00:29:18,040 Speaker 11: Solution and automas driving solution for electric fed mobility urine. 628 00:29:18,440 --> 00:29:22,160 Speaker 12: So we are in this industry for six years already. 629 00:29:23,200 --> 00:29:25,080 Speaker 6: Who are typically your customers? 630 00:29:26,440 --> 00:29:29,840 Speaker 11: So we have Malti customers both in China and the 631 00:29:29,920 --> 00:29:30,840 Speaker 11: outside of China. 632 00:29:31,000 --> 00:29:35,800 Speaker 12: So in China we served for the largest customer like 633 00:29:35,800 --> 00:29:36,480 Speaker 12: a Chili group. 634 00:29:36,920 --> 00:29:39,600 Speaker 11: At the same time, we also provide our service to 635 00:29:40,120 --> 00:29:43,800 Speaker 11: you loadus Vobo post and the smart. 636 00:29:44,720 --> 00:29:48,000 Speaker 2: So one of my favorite features is the heads up 637 00:29:48,080 --> 00:29:51,720 Speaker 2: display and it's like I'm flying inn F sixteen. It 638 00:29:51,880 --> 00:29:53,760 Speaker 2: tells me like you know, the speed limit and how 639 00:29:53,800 --> 00:29:55,200 Speaker 2: fast I'm going on all that kind of stuff. I 640 00:29:55,200 --> 00:29:58,280 Speaker 2: want to change the you know, the radio or the whatever. 641 00:29:58,040 --> 00:29:59,640 Speaker 3: Do anything on the entertainment front. It just comes right 642 00:29:59,720 --> 00:30:00,640 Speaker 3: up on your screen. 643 00:30:00,680 --> 00:30:03,000 Speaker 2: It's a little freaky, but again it kind of makes 644 00:30:03,040 --> 00:30:05,640 Speaker 2: me feel like I'm a fighter pilot or something nice. 645 00:30:05,880 --> 00:30:09,960 Speaker 2: So Phil, talk to us about where your industry is going. 646 00:30:10,040 --> 00:30:13,680 Speaker 2: It just seems like the the technology is so extraordinary 647 00:30:13,760 --> 00:30:16,680 Speaker 2: making such leaps and bounds. Here when I go to 648 00:30:16,720 --> 00:30:19,160 Speaker 2: the Consumer Electronics Show in Vegas in January, it's no 649 00:30:19,240 --> 00:30:22,560 Speaker 2: longer it's basically an auto show, you know, with some 650 00:30:22,560 --> 00:30:24,120 Speaker 2: some some pecs around it. 651 00:30:24,120 --> 00:30:25,760 Speaker 3: Talk to us about where the technology is going. 652 00:30:27,000 --> 00:30:30,640 Speaker 11: Yeah, sure, listen if the industry is a promising and 653 00:30:30,840 --> 00:30:33,440 Speaker 11: uh got a lots of dramatic changes. 654 00:30:33,920 --> 00:30:36,480 Speaker 12: So, uh, the eve eco industry. 655 00:30:36,040 --> 00:30:39,200 Speaker 11: Already moved the front, you know, the combustion engine focused 656 00:30:39,200 --> 00:30:43,240 Speaker 11: to you know, electric fights mobility solution move a from 657 00:30:43,360 --> 00:30:46,720 Speaker 11: you know, the traditional Veico to you know, uh Thomas 658 00:30:46,840 --> 00:30:50,080 Speaker 11: driving focus, so least to the industry is moving very fast. 659 00:30:50,240 --> 00:30:55,040 Speaker 11: And now we are entering into an uielectional electronic mobility 660 00:30:55,080 --> 00:30:59,080 Speaker 11: solution with the Eco Solutions cob Nation mode. So ECAs 661 00:30:59,120 --> 00:31:03,920 Speaker 11: is seeing the ripest to support the industry transformation right. 662 00:31:03,840 --> 00:31:06,880 Speaker 6: Now, talk to us about how the EV market is 663 00:31:07,000 --> 00:31:09,640 Speaker 6: different in China versus the US. 664 00:31:10,480 --> 00:31:14,320 Speaker 11: Yeah, definitely, so China, the new V market in Chinese 665 00:31:14,400 --> 00:31:17,600 Speaker 11: woming As, we can see that we have many new 666 00:31:17,600 --> 00:31:21,120 Speaker 11: players in the market, and right now China, our players 667 00:31:21,200 --> 00:31:24,000 Speaker 11: actually provide the best of the reader's solutions in least 668 00:31:24,000 --> 00:31:28,000 Speaker 11: the industry, not only for the Chinese MS, but also 669 00:31:28,120 --> 00:31:31,520 Speaker 11: you know they are going abroad. They are going to 670 00:31:31,640 --> 00:31:34,880 Speaker 11: provide the services in euro market, in the US market 671 00:31:35,200 --> 00:31:38,320 Speaker 11: to support those of global em to grow and a strife. 672 00:31:39,600 --> 00:31:41,880 Speaker 2: So it's it's interesting here. I mean, we just think 673 00:31:41,920 --> 00:31:44,840 Speaker 2: about all the technology here. Talk to us about your 674 00:31:44,840 --> 00:31:47,680 Speaker 2: company a little bit. I see the stockdown about sixty 675 00:31:47,680 --> 00:31:50,400 Speaker 2: percent year to date. What's the what's the story that 676 00:31:50,440 --> 00:31:52,360 Speaker 2: you're telling your investors here? 677 00:31:53,720 --> 00:31:57,640 Speaker 11: Okay, so Ihas, Actually we are performing pretty well in 678 00:31:57,720 --> 00:32:01,160 Speaker 11: terms of the financial performance. We are announced in a 679 00:32:01,280 --> 00:32:05,959 Speaker 11: produltry our popeline granary growth group at fifty percent year 680 00:32:06,000 --> 00:32:09,080 Speaker 11: a year, and our gross Marting percent gross Martin dollar 681 00:32:09,200 --> 00:32:12,840 Speaker 11: also grew one and forty percent year growth. All those 682 00:32:13,080 --> 00:32:16,120 Speaker 11: strong financial performance indiquate LA. We are in good shape 683 00:32:16,240 --> 00:32:19,880 Speaker 11: at the same time. Right, for example, we provide our 684 00:32:19,880 --> 00:32:23,040 Speaker 11: full stack solution to many vehicles program. For example, we 685 00:32:23,280 --> 00:32:28,040 Speaker 11: just support link D zero eight, the vehicle to launch 686 00:32:28,240 --> 00:32:28,680 Speaker 11: in a year. 687 00:32:28,760 --> 00:32:29,960 Speaker 12: Right will provide not. 688 00:32:29,920 --> 00:32:33,000 Speaker 11: Only in the computing platform, but also will provide you know, 689 00:32:33,200 --> 00:32:36,600 Speaker 11: as a solution, a common striving containing on it as 690 00:32:36,600 --> 00:32:39,640 Speaker 11: well as you know, we operating system called framing Auto. 691 00:32:39,960 --> 00:32:42,720 Speaker 11: So basically with that we are able to increase the 692 00:32:42,800 --> 00:32:46,480 Speaker 11: content per vehicle and increase our pop line and the 693 00:32:46,520 --> 00:32:50,280 Speaker 11: profitability as well. So we are long term focused the 694 00:32:50,320 --> 00:32:55,160 Speaker 11: company we serve for the customer value. And right now 695 00:32:55,400 --> 00:32:58,560 Speaker 11: I would say letter our stock prices under value. 696 00:32:58,840 --> 00:32:59,920 Speaker 8: But it's okay. 697 00:33:00,080 --> 00:33:02,120 Speaker 11: We are we are working on you know, the customer 698 00:33:02,200 --> 00:33:05,920 Speaker 11: value enhancement and we really flat the investors. We'll we'll 699 00:33:06,000 --> 00:33:08,480 Speaker 11: see our UH performance recurring. 700 00:33:08,600 --> 00:33:11,320 Speaker 6: In terms of the surprise you talked about in your 701 00:33:11,560 --> 00:33:15,720 Speaker 6: latest quarterly results about increased demand from international markets. Where 702 00:33:15,760 --> 00:33:17,600 Speaker 6: have you seen the most increased demand? 703 00:33:19,240 --> 00:33:23,280 Speaker 11: So from the international market perspective, I do believe that 704 00:33:23,400 --> 00:33:26,720 Speaker 11: many traditional oms they would like to take it into 705 00:33:27,120 --> 00:33:32,000 Speaker 11: the new evening market and let UH change had taken 706 00:33:32,120 --> 00:33:35,320 Speaker 11: had taken place largely both in you know, Europe market 707 00:33:35,360 --> 00:33:38,280 Speaker 11: and the China market and lots of the global m 708 00:33:38,440 --> 00:33:40,960 Speaker 11: they like to play in a big way in China market, 709 00:33:41,280 --> 00:33:43,600 Speaker 11: so they want, you know, the partners like the E 710 00:33:43,680 --> 00:33:45,680 Speaker 11: cars to support UH. 711 00:33:45,880 --> 00:33:47,160 Speaker 12: Better plan in China as well. 712 00:33:47,280 --> 00:33:49,440 Speaker 11: At the same time, lots of the Chinese OM like 713 00:33:49,520 --> 00:33:53,560 Speaker 11: to explore into Lefolo print in global market and e cars. 714 00:33:53,600 --> 00:33:57,240 Speaker 11: We also follows oms to to strive to to you know, 715 00:33:57,320 --> 00:34:00,560 Speaker 11: to to have the competitional advantage you know, gog market. 716 00:34:00,680 --> 00:34:02,760 Speaker 12: So that is what happened. We called the channel to 717 00:34:02,760 --> 00:34:04,040 Speaker 12: Global and Global China. 718 00:34:04,920 --> 00:34:08,279 Speaker 2: Phil How was some of the tensions between the US 719 00:34:08,280 --> 00:34:12,560 Speaker 2: and China, particularly it relates to technology and technology transfers. 720 00:34:12,640 --> 00:34:14,680 Speaker 2: How has that impacted your business? 721 00:34:16,560 --> 00:34:20,640 Speaker 11: I think the challenge is definitely uh uh you know, 722 00:34:20,680 --> 00:34:24,200 Speaker 11: applied it to the industry, to to many uh many 723 00:34:24,360 --> 00:34:27,640 Speaker 11: players tech players in the market. And I think the 724 00:34:27,680 --> 00:34:30,520 Speaker 11: real issue here is how to address the customer demand. 725 00:34:30,560 --> 00:34:34,520 Speaker 11: How does customers want to have the trusted the partner 726 00:34:34,560 --> 00:34:39,520 Speaker 11: to support a UH vehicle to success succeed in the market. 727 00:34:39,640 --> 00:34:44,520 Speaker 11: So right now it cas also operate globally, so not 728 00:34:44,640 --> 00:34:47,600 Speaker 11: only in China, but also in Europe. We open up 729 00:34:47,680 --> 00:34:51,759 Speaker 11: our foot printer in the UK, in the inter States, 730 00:34:51,760 --> 00:34:54,960 Speaker 11: in Sweden and Germany. So we are truly a global 731 00:34:55,000 --> 00:34:59,880 Speaker 11: company and we collaborate collaborated with lots of the customers 732 00:35:00,080 --> 00:35:02,879 Speaker 11: on a different diretion from the countries. So that's why 733 00:35:03,120 --> 00:35:05,120 Speaker 11: we have confidence to you know, to bring a value 734 00:35:05,160 --> 00:35:09,040 Speaker 11: to the customers and then the folly business to grow 735 00:35:09,120 --> 00:35:09,400 Speaker 11: and win. 736 00:35:10,280 --> 00:35:12,120 Speaker 2: Hey, Phil, thanks so much for joining us. I really 737 00:35:12,160 --> 00:35:15,360 Speaker 2: appreciate getting some of your time on learning about your company, 738 00:35:15,360 --> 00:35:17,880 Speaker 2: Phil Joe. He is the CFO of e car X. 739 00:35:18,040 --> 00:35:21,520 Speaker 2: Symbol is e c X on the NASDAC and you 740 00:35:21,520 --> 00:35:23,800 Speaker 2: can put that into your Bloomberg terminal and check. 741 00:35:23,600 --> 00:35:24,160 Speaker 3: Out the stock. 742 00:35:25,480 --> 00:35:28,600 Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can 743 00:35:28,640 --> 00:35:32,400 Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever 744 00:35:32,480 --> 00:35:36,200 Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 745 00:35:36,400 --> 00:35:39,040 Speaker 1: at Matt Miller nineteen seventy three and on. 746 00:35:39,120 --> 00:35:41,160 Speaker 3: Paul Swenny I'm on Twitter at pt Sweeney. 747 00:35:41,280 --> 00:35:43,960 Speaker 2: Before the podcast, you can always catch us worldwide at 748 00:35:43,960 --> 00:35:45,720 Speaker 2: Bloomberg Radio.