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Speaker 1: This is Bloomberg Business Wait inside from the reporters and

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Speaker 1: editors who bring you America's most trusted business magazine, plus

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Speaker 1: gloom O Business Finance and tech news. The Bloomberg Business

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Speaker 1: Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

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Speaker 2: Whoa whoa.

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Speaker 3: Little b king. Yeah, we're a little worried. It goes

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Speaker 3: like a street's a little worried about Apple, Tim, We

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Speaker 3: were just talking about it, one of your decliners. Shares

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Speaker 3: of Apple down for fourth day in a row, moving

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Speaker 3: below it's ninety day moving average. This after analys at

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Speaker 3: Piper Sandler cut their rating today, setting a week macro

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Speaker 3: environment in China that will damp and demand for iPhones.

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Speaker 3: We heard some worries just earlier in the week.

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Speaker 2: Yeah, that follows the more bearish move by analyst at

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Speaker 2: Barclays who cut their rating to underweight on Tuesday. In all, Carol,

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Speaker 2: Apple is down six percent in the last four days,

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Speaker 2: shedding one hundred and eighty billion dollars in market cap.

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Speaker 2: We should note there are now five cells on the stock,

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Speaker 2: so that pushes the company's by equivalent ratio down even further.

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Speaker 2: With the percentage of analysts bullish on the company at

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Speaker 2: a three year low.

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Speaker 3: Yes, it's interesting, all right. So what's going on? Is

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Speaker 3: twenty twenty four set to take a big bite out

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Speaker 3: of Apple? We've got a great roundtable. Markermann is Chief

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Speaker 3: Technology correspondent at Bloomberg News. He joins us on Zoom

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Speaker 3: from our La bureau, and anurag Rana is senior technology

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Speaker 3: analyst at Bloomberg Intelligence. He joins us on Zoom from

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Speaker 3: our Chicago bureau. Guys, thank you so much. Happy New

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Speaker 3: year to both of you. I do want to kick

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Speaker 3: off with you.

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Speaker 4: Mark.

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Speaker 3: You cover this company like HONOURAG. You talk with them,

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Speaker 3: you check out their products, you do your channel checks.

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Speaker 3: Should we be saying Cooper Tina, we have a little

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Speaker 3: bit of a problem here.

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Speaker 5: You know.

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Speaker 6: I think twenty fourteen good.

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Speaker 2: Twenty fourteen.

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Speaker 3: Twenty twenty four don't take me back, please?

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Speaker 6: Yes, could shake up to shake out to be one

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Speaker 6: of the most pivol years in Apple's history.

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Speaker 4: There's a lot going on.

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Speaker 6: They have a pretty compelling product roadmap for the year.

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Speaker 6: The Vision Pro headset, their first new category of nine years.

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Speaker 6: Larger iPhone displays biggest change of the iPad since twenty eighteen,

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Speaker 6: big changes to AirPods in the Apple Watch. So there's

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Speaker 6: a lot going on here, but big butt. The iPhone

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Speaker 6: sales concerns are a real problem. The fact that we're

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Speaker 6: likely going into our fifth quarter in a row of

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Speaker 6: revenue decline, that's a big problem. That's something that hasn't

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Speaker 6: happened in the modern Steve Jobs nor Tim cook eras

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Speaker 6: The fact that this new product category they're launching is

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Speaker 6: not going to have any mainstream pickup for several years

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Speaker 6: or generate any material revenue, that's a problem. The fact

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Speaker 6: that Massimo proved that you could beat Apple in a

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Speaker 6: patent infringement lawsuit and get their product off the market.

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Speaker 6: That's a really big deal. So there's a lot of

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Speaker 6: negative noise around Apple. I still think that the fundamentals,

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Speaker 6: the moat they've created, the ecosystem, the iPhone, people holding

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Speaker 6: onto their devices, buying news services. I think that's all

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Speaker 6: pretty strong. But it just feels a little weaker than

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Speaker 6: it ever.

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Speaker 2: Has on a rock. I see you nodding here from Chicago.

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Speaker 2: Tell us tell us your thoughts based on what you

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Speaker 2: heard from Mark.

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Speaker 7: Yeah, I absolutely agree with Mark in fact, but the

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Speaker 7: only thing I would say is all of this you know,

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Speaker 7: iPhone weakness came out when they reported results on November

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Speaker 7: the two. That's when we knew when they missed China

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Speaker 7: numbers by a big amount. We had heard about, you know,

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Speaker 7: competition from Huawei. All of those things are important because

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Speaker 7: we were hoping that by this year we should see

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Speaker 7: a improvement in China smartphone sales only because the year

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Speaker 7: before we had COVID related problems and there was a

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Speaker 7: depression in sales. I think that really is something that

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Speaker 7: you know, when they came and gave guidance. To be honest,

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Speaker 7: I was surprised that the stock didn't react the way

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Speaker 7: it's reacting now at that time. So I think it

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Speaker 7: could be a year and you know, portfolio management or

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Speaker 7: whatever it was. But I agree this year is going

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Speaker 7: to be tough for them. They're going to grow somewhere

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Speaker 7: between three to five percent revenue, then you buy you

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Speaker 7: know a little bit of buybacks in between. So this

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Speaker 7: is a this is the new normal for Apple. It

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Speaker 7: has been for the last two years.

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Speaker 3: Well, honurk let me follow the new normal. Does that

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Speaker 3: mean Apple at some point needs to think about China

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Speaker 3: not being as big a market as it has planned

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Speaker 3: for it to be.

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Speaker 7: Well, China is a big market. There is no there

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Speaker 7: is no way out of it. But see the way

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Speaker 7: you want to think about Apple in totality, and I'm

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Speaker 7: only going to focus on iPhones right now because that's

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Speaker 7: really what drives the product growth at least, you know,

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Speaker 7: the in the near term. When you look at the

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Speaker 7: global market, they have a very high market share in

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Speaker 7: the US, which is a mature market. Then the next

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Speaker 7: big market is China, where they have less than eighteen

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Speaker 7: percent of unit market share. But as people become more

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Speaker 7: rich they go out with and get a more premium brand.

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Speaker 7: Then the next big market is going to be India,

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Speaker 7: where they have less than five percent market share in

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Speaker 7: terms of the units. So the way you want to

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Speaker 7: think about Apple is over the next three to five years,

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Speaker 7: the big unit chipment, you know, numbers are going to

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Speaker 7: come from China and after that India. In the US,

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Speaker 7: you know, we have phones, we're going to refresh at

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Speaker 7: whatever three years, three and a half years, potios and

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Speaker 7: that's a bit of a saturated pocket. So China is

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Speaker 7: the growth engine when it comes to phones, and that's

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Speaker 7: where we are seeing some you know, I would say,

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Speaker 7: slow down.

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Speaker 2: Hey, Mark For years, we've been hearing about how the

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Speaker 2: iPhone just powers Apple, and indeed it does account for

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Speaker 2: more than fifty percent of the company's revenue. But we've

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Speaker 2: also heard the risks associated with that. What is the

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Speaker 2: most compelling new product category for Apple that will help

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Speaker 2: offset some of this slowing iPhone growth?

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Speaker 6: You know, it's it's an interesting question people for years,

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Speaker 6: like you said, have been talking about is it a

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Speaker 6: risk that everything revolves around the iPhone and half the

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Speaker 6: revenue comes from the iPhone? I think it's even worse

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Speaker 6: than that, because you're buying AirPods if you have an iPhone,

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Speaker 6: you're buying an Apple Watch if you have an iPhone,

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Speaker 6: all these services that Apple are selling, Fitness Plus TV

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Speaker 6: plus Apple Music, the App Store. Every time you download

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Speaker 6: an app, where are those downloads happening, It's happening on

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Speaker 6: the iPhone. How many people own an iPad or a

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Speaker 6: Mac and don't own an iPhone. How many people buy

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Speaker 6: an iPhone before they buy an iPad or a Mac.

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Speaker 6: So if you really think about the ecosystem in totality,

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Speaker 6: it is one hundred percent built around the iPhone. You know,

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Speaker 6: this new vision prode answer your question about new product

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Speaker 6: categories to drive revenue. That's not going to drive revenue

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Speaker 6: anytime soon. If they sell out of all their inventory

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Speaker 6: for twenty four if you're talking about a three to

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Speaker 6: four billion in just revenue alone, probably about a billion

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Speaker 6: in profit maybe a little bit less, that's nothing, right,

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Speaker 6: I mean, Honor Rock can get into how minuscule that is.

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Speaker 6: And so I think long term, mixed reality, augmented reality,

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Speaker 6: virtual reality, those are fine categories for Apple, but I

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Speaker 6: think right now it's nothing more than a pilot dream

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Speaker 6: in terms of not becoming a revenue generator.

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Speaker 3: Honor Rok, come on in, you are not in your head?

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Speaker 7: Go ahead, yeah, I mean it's as I said, that's

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Speaker 7: why you know our I would say, seventy five percent

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Speaker 7: of my focus going and goes into the iPhone and

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Speaker 7: the work that's you know, we do around it. And

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Speaker 7: you know, at this point we should see we should

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Speaker 7: have seen an improvement in China. China, you know, there

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Speaker 7: are about one hundred plus million phones that need to

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Speaker 7: be refreshed that we haven't seen that number move quite

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Speaker 7: a bit, and in terms of the base is a

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Speaker 7: little bit more than that. But you know, we you know,

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Speaker 7: China is going through weakness. You know, we have a

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Speaker 7: new brand, new model from Huawei, but they haven't released

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Speaker 7: in a while, so people are refreshing that. So I

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Speaker 7: mean it it is a big bit of an issue.

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Speaker 7: But frankly speaking, we really think Apple is a unique brand.

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Speaker 7: Apple is a marquee brand. There is. If you look

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Speaker 7: at globally the smartphone market, Apple has less than twenty

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Speaker 7: percent of market share by units. I'm not talking about

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Speaker 7: revenue by units. Think of Apple very much like an LVMH,

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Speaker 7: like what Coca Cola was in the fifties and sixties.

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Speaker 7: Whereas countries that are that they don't have the purchasing

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Speaker 7: power to buy those products right now. As they become

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Speaker 7: more richer, as they become more affluent, they're going to

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Speaker 7: go with a marquee brand, and that's Apple. But if

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Speaker 7: somebody's thinking they're going to grow ten to fifteen percent,

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Speaker 7: I mean they need to recalibrate their thinking. This is

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Speaker 7: at most now a company that's going to grow in

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Speaker 7: a weak economy around three to five percent. In a

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Speaker 7: good economy between sixty eight percent, which, to be honest,

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Speaker 7: it's not bad. This is a brand that can you

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Speaker 7: conquer a lot in the long run. But in the

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Speaker 7: near term we do have growth problems.

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Speaker 3: Mark Mark, I think that's such a great point. Just

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Speaker 3: got about twenty seconds here this reset in terms of

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Speaker 3: they still sell a ton of stuff, guys, but it's

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Speaker 3: not going to be as aggressively growing. We need to

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Speaker 3: think about that just quickly.

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Speaker 6: It's been the case for years now, you know, in

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Speaker 6: terms of reven New Apples very much like the new

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Speaker 6: IBM in terms of products. They want to prove otherwise

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Speaker 6: and this is the year to do it.

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Speaker 3: Listen, guys, thank you so much. We were looking to

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Speaker 3: do a smart roundtable fundamentally about the Apple story, and

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Speaker 3: you guys just laid it out for us so well.

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Speaker 3: Happy happy New Year. Mark Erman, chief technology correspondent here

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Speaker 3: at Bloomberg News out there on the West Coast in

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Speaker 3: our anaag Rana. A must read, as I always say,

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Speaker 3: when it comes to a lot of things going on

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Speaker 3: in the technology world, including Apple. He's senior tech analyst

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Speaker 3: at Bloomberg Intelligence out there in our Chicago bureau. This

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Speaker 3: is Bloomberg.

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Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us

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Speaker 8: What doesn't kill you makes.

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Speaker 1: Us sud.

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Speaker 3: Oh, thank god we have Gena to save us. Yes, indeed, everybody,

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Speaker 3: US docs have begun twenty twenty four in a sour note. Weakness,

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Speaker 3: though should be reasonably short lived, according to Bloomberg Intelligence

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Speaker 3: Equity Strategies checklist of sixteen key indicators, which continues to

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Speaker 3: improve for our fifth straight quarter. This from Bloomberg Intelligence

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Speaker 3: Chief Equity Strategist Gina mart Adams, who is here in

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Speaker 3: our Bloomberg Interactive Brokers studio. So nice to have you here.

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Speaker 3: Happy New Year. Can't believe it's in New Year?

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Speaker 9: Wait?

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Speaker 3: Can I ask you something? You are here listening to

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Speaker 3: this conversation. What do you make of the buy now,

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Speaker 3: pay later? Is there something within the equity universe? I

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Speaker 3: don't know.

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Speaker 9: Oh.

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Speaker 10: I think people are less and less cash rich, and

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Speaker 10: Americans love their credit. So if you're going to give

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Speaker 10: them an opportunity for a free lunch, even if they

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Speaker 10: have to pay for that lunch in a month, so

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Speaker 10: they're going to take that opportunity, In particular in periods

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Speaker 10: of time when they're a little bit short cash, and

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Speaker 10: that does appear to be where we are today. I mean,

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Speaker 10: they still have very little debt, which is great longer term,

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Speaker 10: but they are taking on more debt on account of

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Speaker 10: the fact that it's getting more expensive to live and

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Speaker 10: their incomes have really caught up with inflation. Even though

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Speaker 10: that seems to be improving in the near term, we've

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Speaker 10: been eighteen months in which inflation has been accelerating very

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Speaker 10: quickly relative to income, and so certain income classes are

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Speaker 10: struggling a little bit more than others. And anytime you

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Speaker 10: give somebody something for free, they generally tend to do this.

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Speaker 10: Do this.

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Speaker 2: So, Gina, how do you square everything you just said

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Speaker 2: right now with the optimism that you and the team

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Speaker 2: have for stocks for this year.

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Speaker 10: Well, so, the consumer is not the market. The market

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Speaker 10: is not the consumer. It's the first thing to consider.

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Speaker 10: There are potential weaknesses in the outlook, and many of

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Speaker 10: them are consumer centric. But when we look at the

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Speaker 10: composition of our broad equity markets in the US, it's

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Speaker 10: a lot less about the American consumer than I think

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Speaker 10: is popularly believed and what we've expected.

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Speaker 3: We always talked about the consumer the backbone of the

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Speaker 3: uscap exactly Yeah.

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Speaker 10: I think that's a really good point and something we

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Speaker 10: talk a lot about. It's sixty five percent of the

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Speaker 10: US economy, but thirty percent of the market cap of

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Speaker 10: the S and P five hundred at best is consumer sense. Also,

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Speaker 10: what you tend to see in a normal recessionary sequence

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Speaker 10: is the consumer slows down. There spending business investment crashes

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Speaker 10: as a result of that consumer slowdown, and the business

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Speaker 10: investment is what really creates the cycle. Business investments already crashed.

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Speaker 10: Isms are already sitting at all time near all time

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Speaker 10: low levels. Lais have already crashed, We've already experienced our

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Speaker 10: major deceleration. So it's very difficult to get to a

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Speaker 10: sort of mental constructs that would suggest that we're not

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Speaker 10: already at or near some kind of low in the economy.

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Speaker 10: Maybe we have a tiny dip lower if the consumer

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Speaker 10: finally capitulates, but businesses have already adjusted, and we see

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Speaker 10: that in the profit cycle as well. Within the S

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Speaker 10: and P five hundred profit cycle, we saw profits capitulate materially.

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Speaker 10: In twenty twenty two, we went through a massive recession

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Speaker 10: in profits. Profits are starting to claw their way out

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Speaker 10: of that recession now, So I think what's most important

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Speaker 10: to driving stocks, frankly is earnings. Earnings are not one

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Speaker 10: to one with the economy and by any stretch of

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Speaker 10: the amount, and there's certainly not one to one with consumption.

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Speaker 3: I am printing at the T shirts. Consumer is not

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Speaker 3: the market. Market is not the consumer. Because I think

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Speaker 3: about how much FI about sure, yeah, exactly, I'm going

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Speaker 3: to I'm going to get it done.

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Speaker 2: You know.

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Speaker 10: The other thing I'd like to just add into this,

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Speaker 10: because I'm talking about this for a note on Monday.

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Speaker 10: We're so growth obsessed in the US. It's all about growth.

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Speaker 10: It's all about growth. It's all about growth. But the

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Speaker 10: reality of this cycle, especially over the last three years,

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Speaker 10: that we've learned, or we should have learned, is that

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Speaker 10: we should be a lot more inflation obsessed. And inflation

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Speaker 10: doesn't always trail growth. And I think many of us

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Speaker 10: in this market are conditioned on the idea that, well,

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Speaker 10: if growth goes higher, inflation goes higher. If growth goes lower,

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Speaker 10: inflation goes lower, and there's this symbiotic relationship that's not

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Speaker 10: actually how it always happens. And we learned that the

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Speaker 10: hard way in twenty twenty one and twenty twenty two,

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Speaker 10: where inflation and growth really decoupled. So I actually think

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Speaker 10: if there's a big risk to stocks next year, it's

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Speaker 10: inflation that remains stickier than anybody anticipated. Even if growth accelerates,

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Speaker 10: that's already expected. The whole world is expecting inflation, and we're.

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Speaker 3: Not accelerate, but we're not expecting We're not expecting inflation

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Speaker 3: into acel. I agree, and like, as you think about

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Speaker 3: the Fed minutes from yesterday, they kind of covered everything.

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Speaker 3: We could cut rates, but we could also raise rates,

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Speaker 3: and I do feel like that that's the one thing

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Speaker 3: that's being kind of underpriced in the markets.

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Speaker 10: Yeah, and I think that that's just a natural byproduct

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Speaker 10: of the fact that we're all human. We all work

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Speaker 10: on recent experience. For the vast majority of the last

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Speaker 10: twenty five years, we have really just been able to

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Speaker 10: forecast growth and therefore forecast what was going to happen

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Speaker 10: in markets. Something changed, it broke, and it definitely broke

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Speaker 10: in a hard way. In twenty twenty two, Forecasting growth

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Speaker 10: was not going to get you to where you needed

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Speaker 10: to be with an investment strategy. So we have to

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Speaker 10: consider inflation and what's going to happen with inflation in

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Speaker 10: all aspects, but I think we're really reticent to do

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Speaker 10: so because we're conditioned to all.

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Speaker 3: But it doesn't really the end of everything, right, No.

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Speaker 10: It doesn't necessarily mean the end of everything. It doesn't

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Speaker 10: necessarily mean that things are broken. It's just different. It's

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Speaker 10: just very different than where we've been for most of

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Speaker 10: the last two decades.

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Speaker 2: Well, for most the last few weeks, you and the

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Speaker 2: team at Bloomberg Intelligence have been very busy because I

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Speaker 2: got a lot of notes.

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Speaker 3: Okay, thank you, thank you of it.

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Speaker 10: We're catching up after the holiday break.

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Speaker 2: Well, one thing that was really surprising to me looking

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Speaker 2: back on twenty twenty three and how we can use

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Speaker 2: this to predict what happens in twenty twenty four is

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Speaker 2: the breadth, especially globally of stocks. We talked so much

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Speaker 2: about the Magnificent seven, but you and the team crunched

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Speaker 2: the numbers and it was a pretty good year globally.

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Speaker 10: I know, it's kind of surprising because I think, again,

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Speaker 10: the popular rhetoric has been, oh, it's just all of

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Speaker 10: us seven. Hey if you missed the rally because you

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Speaker 10: didn't have the Mags seven. But the reality is we

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Speaker 10: tracked twenty major global equity markets around the world. Nineteen

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Speaker 10: of twenty posted returns. Sixty percent of global stocks posted returns.

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Speaker 10: Forty five percent of global stocks posted double digit returns.

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Speaker 10: Last year. It was one of the greatest years for

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Speaker 10: stocks in the last twenty five, one of the top six.

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Speaker 10: So we had a really good year in equities in

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Speaker 10: twenty twenty three. Not a great year in small caps

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Speaker 10: without a doubt. Small caps were really left behind. Emerging markets,

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Speaker 10: especially emerging markets when you include China, were left behind.

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Speaker 10: So there were not everybody benefited significantly. A great deal

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Speaker 10: of the equity market did do quite well in twenty

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Speaker 10: twenty three.

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Speaker 3: So how do you measure that? Is it the number

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Speaker 3: hitting their fifty two week highs? What is it that

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Speaker 3: you look at?

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Speaker 10: Yeah, so we look at a lot of different things

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Speaker 10: for that study. We just looked at the absolute returns

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Speaker 10: just to kind of report in on, hey, here's actually

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Speaker 10: what happened, and it looked pretty decent. I like to

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Speaker 10: look at the percentage of stocks trading above their fifty

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Speaker 10: and two hundred day moving average as my favorite breadth

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Speaker 10: measure because I tend to find it gives me some

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Speaker 10: indication as to what to expect for price trend. It

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Speaker 10: also gives some near term toggles for the equity market. So,

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Speaker 10: for instance, at the end of last year, we got

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Speaker 10: to a point where seventy five percent more than seventy

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Speaker 10: five percent of stocks were trading above their two in

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Speaker 10: a day moving average.

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Speaker 3: Which is significant.

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Speaker 10: It's a very big breadth number, but it's also a

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Speaker 10: bit extreme, okay, and it paired really well with things

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Speaker 10: like our market Pulse index, which was saying the market

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Speaker 10: itself sentiment is far too, far too bullish. RSI momentum

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Speaker 10: also got to a very high extreme by the end

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Speaker 10: of the year, so we were set up coming into

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Speaker 10: this year to have a cool off period. At the

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Speaker 10: very least, we needed to move out of the party

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Speaker 10: that we had in December and pull off and let

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Speaker 10: the market which I find a new equilibrium. How much

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Speaker 10: of a cool loss it should be relatively small, just

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Speaker 10: because most of the other conditions that we tend to

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Speaker 10: follow for driving equity markets are pretty supportive, in particular

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Speaker 10: the earnings trends. Frankly, I think it's kind of gone

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Speaker 10: unnoticed that earning's made a major low in twenty twenty

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Speaker 10: three and are starting to climb out of that low.

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Speaker 10: Most sectors are going to participate in earnings recovery this year.

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Speaker 10: The four ninety three, so in the non seven that

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Speaker 10: we talk about, the four ninety three s and P

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Speaker 10: five hundred companies that don't get as much play are

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Speaker 10: actually supposed to produce their first quarter of earnings growth

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Speaker 10: with the fourth quarter earning season coming up, the first

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Speaker 10: quarter of earnings growth we've seen since twenty twenty two,

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Speaker 10: So we should see some earnings momentum gather throughout the year.

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Speaker 10: A lot of it is because inflation is decelerating. It's

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Speaker 10: not because you got a big growth recovery or revenue

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Speaker 10: but robust revenue recovery.

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Speaker 3: It really is.

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Speaker 10: Inflation needs to continue to accelerate to power that one recovery.

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Speaker 3: We were talking about the end of the year and

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Speaker 3: just got about a minute left here. Is that the

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Speaker 3: money that's sitting in money markets. Do you anticipate that

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Speaker 3: comes back into the equity markets this year? Or how do?

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Speaker 3: I don't know?

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Speaker 8: How are you?

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Speaker 5: Yeah?

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Speaker 10: I think you've got to get probably a stronger recovery

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Speaker 10: in small caps and a broader recovery into all stocks.

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Speaker 10: Probably need to get the FED to ease, okay, because

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Speaker 10: then that changes the math. Right Right now, the math

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Speaker 10: is not in favor of stocks relative to cash because

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Speaker 10: the pe ratio is so high. With the exception of

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Speaker 10: small caps, the math works very well for small caps,

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Speaker 10: which are training at incredibly low valuation ratios. So your

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Speaker 10: earning zealed on small caps pretty strong relative to cash,

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Speaker 10: particularly if we go into an earnings recovery this year.

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Speaker 10: But large caps it's a harder case to make. So

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Speaker 10: you'd say small caps and emerging markets, those are the

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Speaker 10: two markets to watch. If we get some momentum there

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Speaker 10: at the same time we get a little bit of feties,

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Speaker 10: those could be the areas of the market that really

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Speaker 10: trigger a broader move into the.

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Speaker 2: More so the more so into the equity market than

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Speaker 2: into the bond market. From money market fund Yeah, no, I.

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Speaker 10: Think that right now investors are considering all options because

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Speaker 10: you still get a plenty of yield in the bond

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Speaker 10: market as well. But we've had such an extraordinary rally

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Speaker 10: in the long end of the curve, it's probably more

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Speaker 10: in the short end that they consider their options in

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Speaker 10: the bond market. Also, I would be remiss not to

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Speaker 10: note that you know, cash inequities are not direct substitutes

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Speaker 10: for one another, and so certainly there's an array of

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Speaker 10: opportunities for investors to consider.

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Speaker 3: Ah the God Here Bloomberg Intelligence Chief equity strategist Gina

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Speaker 3: Martin Adams, a researcher who's a must read. Thank you

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Speaker 3: so much, happing you hear.

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Speaker 10: You too, Thanks for having me.

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Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us

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Speaker 1: Just say Alexa Play Bloomberg eleven thirty.

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Speaker 2: One of the biggest news stories of the last year

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Speaker 2: was the demise of San francisc.

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Speaker 3: Go right like it was over right. Everybody's leaving, it's

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Speaker 3: falling apart. Businesses don't want.

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Speaker 2: To real estate yeah, collapsing.

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Speaker 1: Yeah.

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Speaker 2: The problem of the unhoused is huge. They're drug addicts everywhere.

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Speaker 2: It was a doom loop. It became critics shorthand for

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Speaker 2: problems wrought by remote work and drug addiction, a cycle

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Speaker 2: that drove people out of the tech capital of the

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Speaker 2: world in huge numbers.

440
00:20:21,160 --> 00:20:23,840
Speaker 3: But here's something folks, reality really hasn't caught up with

441
00:20:23,880 --> 00:20:26,440
Speaker 3: this list of woes. In the twelve months ending July

442
00:20:26,520 --> 00:20:30,360
Speaker 3: twenty twenty three, the city actually gained four thy nine

443
00:20:30,400 --> 00:20:33,560
Speaker 3: hundred residents after also seeing some slight growth in the priory.

444
00:20:33,640 --> 00:20:36,320
Speaker 3: Or this is according to some new data. So, you know,

445
00:20:36,400 --> 00:20:38,200
Speaker 3: our team here at Bloomberg News we kind of wanted

446
00:20:38,200 --> 00:20:39,880
Speaker 3: to know, like, what's going on here?

447
00:20:40,000 --> 00:20:42,639
Speaker 2: Well, look at the numbers. Pria non certainly did. Technology

448
00:20:42,640 --> 00:20:44,720
Speaker 2: and venture capital reporter. She took a look at the

449
00:20:44,760 --> 00:20:47,679
Speaker 2: greatly exaggerated demise of San Francisco. She writes about it

450
00:20:47,720 --> 00:20:50,360
Speaker 2: for today's Bloomberg Tech Daily newsletter, which you can sign

451
00:20:50,440 --> 00:20:53,800
Speaker 2: up for at Bloomberg dot com. Slash Technology. Pria joins

452
00:20:53,840 --> 00:20:57,280
Speaker 2: us from our San Francisco bureau. Pria, it has been

453
00:20:57,359 --> 00:21:00,320
Speaker 2: about a year since I've been in San Francisco, Carolyn.

454
00:21:00,359 --> 00:21:02,200
Speaker 2: I had a pretty good trip there. We did December

455
00:21:02,200 --> 00:21:02,879
Speaker 2: of twenty.

456
00:21:02,640 --> 00:21:04,000
Speaker 3: Two, right, Yeah, it's been a while.

457
00:21:04,040 --> 00:21:05,560
Speaker 2: Yeah, we had a good trip there.

458
00:21:05,880 --> 00:21:07,640
Speaker 3: And I know people are like, be careful working the street,

459
00:21:07,640 --> 00:21:08,960
Speaker 3: and I'm like, I walk you around in New York, I'm like,

460
00:21:09,000 --> 00:21:10,280
Speaker 3: am I gonna be okay? You're gonna be okay?

461
00:21:10,320 --> 00:21:12,800
Speaker 2: Yeah, You're gonna be fine. It is a beautiful city,

462
00:21:12,800 --> 00:21:14,960
Speaker 2: one that's very certainly as a Californian and very close

463
00:21:14,960 --> 00:21:17,240
Speaker 2: to my heart. What prompted you to write this story

464
00:21:17,280 --> 00:21:18,640
Speaker 2: because it was a personal experience.

465
00:21:19,720 --> 00:21:22,680
Speaker 9: You know, I was walking the Crosstown Trail in San Francisco.

466
00:21:22,760 --> 00:21:25,840
Speaker 9: It's a seventeen mile trail path that goes through different

467
00:21:25,880 --> 00:21:29,840
Speaker 9: neighborhoods in the city, takes you to lesser known places,

468
00:21:30,000 --> 00:21:33,800
Speaker 9: more known neighborhoods, ends with a gorgeous view of the

469
00:21:33,800 --> 00:21:37,280
Speaker 9: Pacific Ocean on New Year's Day with some friends as

470
00:21:37,320 --> 00:21:39,879
Speaker 9: sort of an annual tradition to be out and about

471
00:21:39,920 --> 00:21:41,920
Speaker 9: in the city on a beautiful sunny day.

472
00:21:42,359 --> 00:21:44,199
Speaker 4: And the whole time I was just thinking, you know,

473
00:21:44,400 --> 00:21:45,080
Speaker 4: there's so much.

474
00:21:45,000 --> 00:21:48,280
Speaker 9: Conversation around San Francisco being in decline, And of course

475
00:21:48,320 --> 00:21:50,680
Speaker 9: I'm not saying because I had an enjoyable walk through

476
00:21:50,680 --> 00:21:54,160
Speaker 9: the city one day, there aren't challenges in this city, right.

477
00:21:54,200 --> 00:21:58,280
Speaker 9: I think anybody who comes here, lives here, experiences life

478
00:21:58,280 --> 00:22:00,760
Speaker 9: in San Francisco is going to agree that homelessness is

479
00:22:00,800 --> 00:22:02,240
Speaker 9: a huge crisis for this city.

480
00:22:02,800 --> 00:22:05,280
Speaker 3: The drug has been for years, this problem. I feel

481
00:22:05,280 --> 00:22:08,440
Speaker 3: like homelessness has been a problem for years there.

482
00:22:10,119 --> 00:22:10,520
Speaker 5: That's right.

483
00:22:10,560 --> 00:22:13,800
Speaker 9: These have been long standing problems that San Francisco really

484
00:22:14,200 --> 00:22:16,840
Speaker 9: must scrapple with and deal with and find a way

485
00:22:16,880 --> 00:22:18,520
Speaker 9: to solve. But at the same time, there's been all

486
00:22:18,520 --> 00:22:22,480
Speaker 9: the conversation around how the city's over it's in decline,

487
00:22:22,600 --> 00:22:25,000
Speaker 9: but the data is not bearing that out right. I mean,

488
00:22:25,000 --> 00:22:27,720
Speaker 9: I received some This is a very polarizing topic though,

489
00:22:27,720 --> 00:22:30,280
Speaker 9: and clearly folks around the country who do not live

490
00:22:30,280 --> 00:22:33,040
Speaker 9: here do live here. People have a lot of opinions

491
00:22:33,040 --> 00:22:35,680
Speaker 9: on this. So I wrote this story about how the

492
00:22:35,800 --> 00:22:39,439
Speaker 9: numbers show that the city actually hasn't lost much of

493
00:22:39,480 --> 00:22:42,000
Speaker 9: its population over the last few years, which is in

494
00:22:42,040 --> 00:22:44,320
Speaker 9: contrast to a law of the conversation around how this

495
00:22:44,400 --> 00:22:48,280
Speaker 9: place is decaying. But I received some pretty charged reader feedback,

496
00:22:48,320 --> 00:22:51,840
Speaker 9: actually more than usual. One reader compared San Francisco to

497
00:22:51,960 --> 00:22:55,800
Speaker 9: Afghanistan and Detroit. I was surprised to see Afghanistan in

498
00:22:55,840 --> 00:22:58,199
Speaker 9: that email. That will pop up as a point of comparison.

499
00:22:58,480 --> 00:23:00,920
Speaker 9: So people clearly have a lot of feeling about this place,

500
00:23:00,960 --> 00:23:02,720
Speaker 9: but I'm not quite sure how much of those people

501
00:23:02,720 --> 00:23:05,080
Speaker 9: have actually spent time in San Francisco. And once again,

502
00:23:06,080 --> 00:23:10,280
Speaker 9: just for the city, that's probably that's probably also true, right,

503
00:23:10,400 --> 00:23:13,760
Speaker 9: the city's chief economists, though, isn't saying that these problems

504
00:23:13,800 --> 00:23:16,080
Speaker 9: don't exist. And he told me, look, there is a

505
00:23:16,200 --> 00:23:18,760
Speaker 9: risk that San Francisco could at enter a doom move

506
00:23:18,840 --> 00:23:21,760
Speaker 9: at some point if the city responds in certain ways

507
00:23:21,800 --> 00:23:24,840
Speaker 9: to its challenges, if the city were to alienate its

508
00:23:24,920 --> 00:23:28,159
Speaker 9: tax base to the extent that people would leave and

509
00:23:28,200 --> 00:23:31,040
Speaker 9: then create more of a drain on its finances. But

510
00:23:31,320 --> 00:23:33,359
Speaker 9: the data has not proven that that doom move is

511
00:23:33,400 --> 00:23:36,120
Speaker 9: actually here. Now there are risks in the city has

512
00:23:36,160 --> 00:23:38,320
Speaker 9: to manage this time kind of carefully while people are

513
00:23:38,400 --> 00:23:40,639
Speaker 9: still looking at remote work and the ability to not

514
00:23:40,720 --> 00:23:43,080
Speaker 9: necessarily have this either setor of gravity in the tech

515
00:23:43,119 --> 00:23:44,639
Speaker 9: industry especially.

516
00:23:44,640 --> 00:23:46,800
Speaker 2: But this is still a place where people in the

517
00:23:46,840 --> 00:23:48,000
Speaker 2: tech industry.

518
00:23:47,600 --> 00:23:51,600
Speaker 9: Are coming in multiple days a week, as you companies,

519
00:23:51,680 --> 00:23:52,119
Speaker 9: and as.

520
00:23:51,960 --> 00:23:54,679
Speaker 2: You point out PRIA, it's also a place where venture

521
00:23:54,720 --> 00:23:58,520
Speaker 2: capitalists continue to deploy money to companies that are based

522
00:23:58,520 --> 00:24:01,320
Speaker 2: in Silicon Valley. Talk to us about the data that

523
00:24:01,320 --> 00:24:02,000
Speaker 2: you found there.

524
00:24:02,760 --> 00:24:03,240
Speaker 8: That's right.

525
00:24:03,320 --> 00:24:06,000
Speaker 9: So while there have been all these other cities that

526
00:24:06,040 --> 00:24:09,199
Speaker 9: have been gaining more venture capital dollars over the years,

527
00:24:09,280 --> 00:24:10,960
Speaker 9: you know, more and more stops have cropped up in

528
00:24:11,000 --> 00:24:12,920
Speaker 9: New York. There was a lot of hype around Miami

529
00:24:12,960 --> 00:24:15,480
Speaker 9: and the startup scene for a little while, hype more

530
00:24:15,560 --> 00:24:18,360
Speaker 9: so than I think that actually bearing out in the numbers.

531
00:24:19,240 --> 00:24:21,800
Speaker 9: The Bay Area by far still gets the most venture

532
00:24:21,800 --> 00:24:23,919
Speaker 9: capital dollars, and at the end of the day, AI

533
00:24:23,960 --> 00:24:27,040
Speaker 9: companies now are cropping up and opening offices in the

534
00:24:27,040 --> 00:24:29,600
Speaker 9: Bay Area. They are mandating that their workers come in

535
00:24:29,760 --> 00:24:33,040
Speaker 9: three plus days a week open. AI famously has folks

536
00:24:33,119 --> 00:24:36,119
Speaker 9: in the office almost every day. They're based in San Francisco.

537
00:24:36,440 --> 00:24:38,800
Speaker 9: I wrote a story or last year. I guess I

538
00:24:38,800 --> 00:24:41,040
Speaker 9: can't say earlier this year. Now we're in twenty twenty four.

539
00:24:41,280 --> 00:24:43,919
Speaker 9: I wrote a story in the fall about how AI

540
00:24:43,960 --> 00:24:46,920
Speaker 9: offices are snapping up. AI companies are snapping up more

541
00:24:46,920 --> 00:24:50,920
Speaker 9: office space in San Francisco, not necessarily downtown, in other

542
00:24:50,960 --> 00:24:53,720
Speaker 9: parts of the city. So downtown still has its challenges

543
00:24:53,760 --> 00:24:57,439
Speaker 9: here for sure, but AI companies are opening up offices here.

544
00:24:57,480 --> 00:24:59,600
Speaker 9: They're trying to get their staffs to actually move from

545
00:24:59,600 --> 00:25:01,800
Speaker 9: other parts of the country and the world to San

546
00:25:01,840 --> 00:25:04,720
Speaker 9: Francisco because they believe there is a gold rush right

547
00:25:04,720 --> 00:25:07,080
Speaker 9: now in that sub industry within tech, and that they

548
00:25:07,119 --> 00:25:10,400
Speaker 9: need to capitalize it, and that having people together in person,

549
00:25:10,800 --> 00:25:14,199
Speaker 9: solving problems in this burgeoning field is the way to

550
00:25:14,280 --> 00:25:16,760
Speaker 9: do it. So there is a lot more fervor around

551
00:25:16,840 --> 00:25:19,400
Speaker 9: being in San Francisco in person than there was early

552
00:25:19,480 --> 00:25:21,320
Speaker 9: last year, and AI is a huge part of that.

553
00:25:21,520 --> 00:25:24,840
Speaker 3: I love your emotion behind this because it's really great

554
00:25:24,840 --> 00:25:27,240
Speaker 3: to hear because you're right. The story, the narrative has

555
00:25:27,280 --> 00:25:30,680
Speaker 3: been one of doomsday, no doubt about it. What about tourism,

556
00:25:30,720 --> 00:25:32,080
Speaker 3: what are we seeing? I mean, I think it's a

557
00:25:32,080 --> 00:25:33,960
Speaker 3: beautiful city. Every time I go. It makes me so

558
00:25:34,080 --> 00:25:36,119
Speaker 3: happy because it's just gorgeous.

559
00:25:36,160 --> 00:25:38,520
Speaker 2: And it doesn't hurt that the Bloomberg office is literally

560
00:25:38,640 --> 00:25:41,199
Speaker 2: on the water. You see Prio shot, like that's what

561
00:25:41,240 --> 00:25:42,400
Speaker 2: you see from the Bloomberg office.

562
00:25:42,400 --> 00:25:44,840
Speaker 3: It's pretty incredible. But just got about forty five seconds

563
00:25:44,920 --> 00:25:47,840
Speaker 3: left here. I mean tourism, you seeing them out and about.

564
00:25:48,280 --> 00:25:50,240
Speaker 9: There's been some rebound in that. And if you go

565
00:25:50,320 --> 00:25:53,040
Speaker 9: out into restaurants in the city these days, like you

566
00:25:53,040 --> 00:25:55,200
Speaker 9: got to have a reservation to go anywhere great over

567
00:25:55,200 --> 00:25:58,560
Speaker 9: the weekend now again, unlike you know, the early stages

568
00:25:58,600 --> 00:26:01,840
Speaker 9: of post pandemic life where everything felt like you could

569
00:26:01,880 --> 00:26:04,320
Speaker 9: go anywhere. Oh look, I'm not you know, this is

570
00:26:04,480 --> 00:26:07,119
Speaker 9: such a story is rooted in the data, It's rooted

571
00:26:07,160 --> 00:26:09,720
Speaker 9: in my reporting on this industry, which I have been

572
00:26:09,760 --> 00:26:13,639
Speaker 9: covering for about a decade now. And I'm not you know,

573
00:26:13,680 --> 00:26:16,520
Speaker 9: I want to be clear that this whole storyline is

574
00:26:16,520 --> 00:26:19,040
Speaker 9: not about women went on a beautiful walk in San

575
00:26:19,040 --> 00:26:22,360
Speaker 9: Francisco thinks the city is great now, right, I'm not blind.

576
00:26:22,560 --> 00:26:24,919
Speaker 9: This is based on the data, it's based on the facts.

577
00:26:26,000 --> 00:26:28,680
Speaker 3: Great story and really something that I think it's good

578
00:26:28,680 --> 00:26:31,840
Speaker 3: to get this perspective out there, considering the backdrop. And

579
00:26:31,880 --> 00:26:34,199
Speaker 3: I love your your perspective on it because I get it.

580
00:26:34,240 --> 00:26:36,640
Speaker 3: I get where you're coming from. Prianna, thank you so much.

581
00:26:36,640 --> 00:26:39,119
Speaker 3: Happy New Year. She's technology and venture capital reporter at

582
00:26:39,119 --> 00:26:41,639
Speaker 3: Bloomberg News in our San Francisco bureau. And you know,

583
00:26:41,640 --> 00:26:45,240
Speaker 3: I brought out the homeless, not to say that, yeah,

584
00:26:45,400 --> 00:26:48,720
Speaker 3: to remind them that there's you know, it's been around

585
00:26:48,760 --> 00:26:50,399
Speaker 3: for a long time, but I feel like people keep

586
00:26:50,400 --> 00:26:52,840
Speaker 3: bringing it up, like, look the problem and maybe it

587
00:26:52,880 --> 00:26:55,359
Speaker 3: got worse coming off of the pandemic, but it's been

588
00:26:55,400 --> 00:26:57,800
Speaker 3: something they've been trying to grapple with for some time

589
00:26:57,880 --> 00:26:59,440
Speaker 3: that by.

590
00:26:59,400 --> 00:27:02,720
Speaker 2: No means the city right now. No, we here in

591
00:27:02,720 --> 00:27:04,360
Speaker 2: New York are certainly dealing with it as well.

592
00:27:04,400 --> 00:27:08,440
Speaker 3: Anywhere it's warm, where there's you know, better even warm here. Yeah,

593
00:27:08,440 --> 00:27:11,560
Speaker 3: that's true, it's not it's not exactly anyway. I really

594
00:27:11,600 --> 00:27:13,600
Speaker 3: fun to check in with our pre and on. You

595
00:27:13,600 --> 00:27:16,240
Speaker 3: are listening and watching Bloomberg Business Week. This is Bloomberg Radio.

596
00:27:18,119 --> 00:27:21,679
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us

597
00:27:21,720 --> 00:27:25,080
Speaker 1: live weekday afternoons from three to six Eastern Listen on

598
00:27:25,119 --> 00:27:29,160
Speaker 1: Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app,

599
00:27:29,440 --> 00:27:38,280
Speaker 1: or watch us live on YouTube.

600
00:27:39,240 --> 00:27:40,720
Speaker 3: Wait a minute, my at a wedding?

601
00:27:41,800 --> 00:27:43,760
Speaker 2: No, because I wouldn't be dancing if we're at a wedding.

602
00:27:44,359 --> 00:27:45,240
Speaker 3: That's so sad.

603
00:27:45,560 --> 00:27:45,960
Speaker 2: Uh.

604
00:27:46,040 --> 00:27:51,040
Speaker 3: The Electric Revolution a year ago, evs were all the rage.

605
00:27:51,080 --> 00:27:54,240
Speaker 3: It seemed like an all electric future. Tim was just

606
00:27:54,359 --> 00:27:55,199
Speaker 3: around the corner.

607
00:27:55,840 --> 00:27:57,760
Speaker 2: You know, it's funny, this is off script.

608
00:27:57,880 --> 00:27:59,680
Speaker 3: But Katie grad are you dancing in the studio?

609
00:27:59,800 --> 00:28:02,080
Speaker 2: Yeah, that's true. Katie Greyfeld just bought a new car.

610
00:28:02,440 --> 00:28:04,600
Speaker 2: She posted about it on her Instagram, So I think

611
00:28:04,600 --> 00:28:05,960
Speaker 2: it's fair game for me to talk about.

612
00:28:05,880 --> 00:28:07,320
Speaker 3: Just talked about it on Area and I.

613
00:28:07,280 --> 00:28:10,639
Speaker 2: Said, did you why didn't you go to EV and

614
00:28:10,680 --> 00:28:14,439
Speaker 2: she said, you know what, it wasn't even on our radar.

615
00:28:14,600 --> 00:28:15,560
Speaker 3: Yeah, it wasn't.

616
00:28:15,720 --> 00:28:17,480
Speaker 2: It's a little bit of a different situation because she

617
00:28:17,520 --> 00:28:19,520
Speaker 2: lives in New York City and it's like hard to charge.

618
00:28:19,560 --> 00:28:21,560
Speaker 2: But just the fact that it wasn't even on her radar,

619
00:28:21,600 --> 00:28:25,239
Speaker 2: I think speaks volumes about the way that consumers in

620
00:28:25,280 --> 00:28:28,919
Speaker 2: her household. No, it was a genesis.

621
00:28:29,080 --> 00:28:32,280
Speaker 3: Yeah, got it is a genesis. Today's car buyers definitely

622
00:28:32,280 --> 00:28:34,480
Speaker 3: having second thoughts about them, are having no thoughts if

623
00:28:34,480 --> 00:28:38,080
Speaker 3: you're Katie Greefeld, short circuiting sales growth and causing plugin

624
00:28:38,120 --> 00:28:41,280
Speaker 3: models to pile up on dealer lots. Tim automakers, we

625
00:28:41,360 --> 00:28:43,480
Speaker 3: know they're pouring more than a hundred billion into developing

626
00:28:43,480 --> 00:28:47,440
Speaker 3: EV's this decade alone. They're now slashing prices, production, and

627
00:28:47,480 --> 00:28:49,600
Speaker 3: profit forecast for the new green vehicles.

628
00:28:49,680 --> 00:28:52,480
Speaker 2: Yeah. Keith Notton writes all about the inventory that's piling

629
00:28:52,560 --> 00:28:55,960
Speaker 2: up when it comes to these evs. He's Bloomberg News

630
00:28:56,000 --> 00:28:58,800
Speaker 2: Auto reporter. He writes about it for Bloomberg Business Week.

631
00:28:58,840 --> 00:29:00,880
Speaker 2: The story and the upcoming New Year Ahead issue of

632
00:29:00,920 --> 00:29:03,520
Speaker 2: Bloomberg Business Week. It's on newsstands next week. It's already

633
00:29:03,560 --> 00:29:06,160
Speaker 2: online though at Bloomberg dot com slash BusinessWeek and on

634
00:29:06,160 --> 00:29:08,760
Speaker 2: the Bloomberg terminal with more. We have Keith not In

635
00:29:08,840 --> 00:29:11,320
Speaker 2: joining us this afternoon. Also here is the editor of

636
00:29:11,320 --> 00:29:14,160
Speaker 2: Bloomberg Business Week, Joel Webber here in our Bloomberg Interactive

637
00:29:14,160 --> 00:29:17,040
Speaker 2: Brokers studio Jiel, Happy New Year, Happy.

638
00:29:16,800 --> 00:29:20,040
Speaker 11: Near to both of you, and Keith to you as well.

639
00:29:20,920 --> 00:29:23,280
Speaker 11: So the Year Ahead issue we do every year, and

640
00:29:23,320 --> 00:29:27,000
Speaker 11: we have this process of identifying themes and ideas and

641
00:29:27,080 --> 00:29:28,840
Speaker 11: stories that we want to kind of dig into and

642
00:29:28,960 --> 00:29:31,640
Speaker 11: look like the EV one is a huge one, in

643
00:29:31,680 --> 00:29:34,200
Speaker 11: part because of those big numbers that you threw around there.

644
00:29:34,240 --> 00:29:36,880
Speaker 11: The industry has just gone all in on this. What

645
00:29:37,280 --> 00:29:40,360
Speaker 11: has been a little surprising is how consumers have been

646
00:29:40,640 --> 00:29:44,000
Speaker 11: more tepid, and that is somewhat different than I.

647
00:29:43,920 --> 00:29:44,920
Speaker 2: Think it is globally.

648
00:29:44,960 --> 00:29:47,320
Speaker 11: But you know, Americans have their own way of doing

649
00:29:47,360 --> 00:29:50,040
Speaker 11: things and there seems to be no exception. What's interesting, though,

650
00:29:50,160 --> 00:29:52,840
Speaker 11: is that instead of going all gas and we'll have

651
00:29:52,920 --> 00:29:57,440
Speaker 11: to grill Katie Greifeld about her personal decisions some other time.

652
00:29:58,080 --> 00:29:59,480
Speaker 11: One of my favorite topics, by.

653
00:29:59,320 --> 00:30:00,680
Speaker 2: The way, But but but.

654
00:30:01,560 --> 00:30:04,840
Speaker 11: Keith, Hybrid's been around for a while, and yet this

655
00:30:04,920 --> 00:30:07,480
Speaker 11: is what Americans seem to be turning to if they're

656
00:30:07,480 --> 00:30:09,240
Speaker 11: not going fully electric.

657
00:30:10,320 --> 00:30:13,680
Speaker 8: That's for sure, Joel. And in fact, we wrote about

658
00:30:13,720 --> 00:30:16,760
Speaker 8: that in BusinessWeek a couple of months ago. Hybrids now

659
00:30:16,880 --> 00:30:20,840
Speaker 8: are all the rage. So Ford and Toyota in particular

660
00:30:21,080 --> 00:30:24,479
Speaker 8: this week announced, you know, really great hybrid sales up

661
00:30:24,520 --> 00:30:27,560
Speaker 8: by double digits. People are seeing it as a sort

662
00:30:27,560 --> 00:30:31,160
Speaker 8: of a good compromise between you know, going all electric

663
00:30:31,360 --> 00:30:34,280
Speaker 8: and sticking with the traditional internal combustion engine.

664
00:30:35,080 --> 00:30:38,000
Speaker 11: So what's this How's this going to play out for

665
00:30:38,160 --> 00:30:41,959
Speaker 11: electric vehicles? I mean, one hundred billion dollars UH into

666
00:30:42,320 --> 00:30:48,640
Speaker 11: developing evs this decade among US automakers. Those prices obviously

667
00:30:48,640 --> 00:30:51,520
Speaker 11: getting slashed. But so what what's it gonna look like?

668
00:30:51,560 --> 00:30:53,240
Speaker 11: How do you you know, if you're going to throw

669
00:30:53,280 --> 00:30:55,440
Speaker 11: all this money into that and then start to tack,

670
00:30:56,040 --> 00:30:57,440
Speaker 11: how does this end playing out?

671
00:30:58,440 --> 00:31:00,880
Speaker 8: Yeah, Well, as one am sent to me at one point,

672
00:31:01,080 --> 00:31:03,640
Speaker 8: this is not a light switch kind of flipped. We

673
00:31:03,720 --> 00:31:06,440
Speaker 8: don't just suddenly go from having you know, two hundred

674
00:31:06,480 --> 00:31:08,960
Speaker 8: and fifty million internal combustion engine cars on the road

675
00:31:08,960 --> 00:31:12,200
Speaker 8: in America to suddenly being all electric. There's there's going

676
00:31:12,240 --> 00:31:14,880
Speaker 8: to be a progression. It's going to be in fits

677
00:31:14,880 --> 00:31:17,840
Speaker 8: and starts. But what happened last year, as one dealer

678
00:31:17,920 --> 00:31:21,640
Speaker 8: said to me, is that the pivot just happened very quickly.

679
00:31:21,680 --> 00:31:25,520
Speaker 8: They went from having long waiting lists for electric vehicles.

680
00:31:25,560 --> 00:31:27,480
Speaker 8: You remember all the stories were writing a year ago

681
00:31:27,720 --> 00:31:30,600
Speaker 8: you just couldn't get one, to now having they have

682
00:31:30,640 --> 00:31:33,840
Speaker 8: one hundred and fourteen day supply of electric vehicles on

683
00:31:33,920 --> 00:31:36,760
Speaker 8: average on dealer lots right now, compared to an industry

684
00:31:36,800 --> 00:31:40,360
Speaker 8: average of seventy two days supply. So they just have

685
00:31:40,640 --> 00:31:43,560
Speaker 8: tons of electric vehicles that aren't selling.

686
00:31:43,760 --> 00:31:45,480
Speaker 3: Timmy, your dad was among them who was waiting.

687
00:31:45,600 --> 00:31:48,920
Speaker 2: Yeah, I waited for gosh, maybe a year for his maki,

688
00:31:49,280 --> 00:31:52,440
Speaker 2: and now there's no problem getting makis. It's kind of

689
00:31:52,440 --> 00:31:52,720
Speaker 2: wid no.

690
00:31:52,760 --> 00:31:54,880
Speaker 8: In fact, for this week just put a discount on

691
00:31:54,880 --> 00:31:57,360
Speaker 8: the maki seventy five hundred off lease deal.

692
00:31:57,680 --> 00:32:02,120
Speaker 2: Maybe he should have waited, So, Keith.

693
00:32:02,120 --> 00:32:03,080
Speaker 3: What is it though?

694
00:32:03,240 --> 00:32:03,479
Speaker 6: Is it?

695
00:32:04,960 --> 00:32:05,120
Speaker 7: Yeah?

696
00:32:05,160 --> 00:32:05,640
Speaker 3: He should have.

697
00:32:06,600 --> 00:32:08,840
Speaker 2: Let's call him up and find out.

698
00:32:09,520 --> 00:32:12,560
Speaker 3: Well that you know, we have talked so much around

699
00:32:12,640 --> 00:32:16,719
Speaker 3: this table about the expensive price. I know Elon's been

700
00:32:16,720 --> 00:32:19,040
Speaker 3: cutting and I know now we're seeing it, but nonetheless,

701
00:32:19,080 --> 00:32:21,720
Speaker 3: how expensive evs are? Is it just a case of

702
00:32:21,760 --> 00:32:25,600
Speaker 3: we've tapped into kind of the wealthier market already. They've

703
00:32:25,640 --> 00:32:28,080
Speaker 3: bought their electric vehicles from now and it's just not

704
00:32:28,160 --> 00:32:31,520
Speaker 3: as appealing, certainly from a price point, to kind of

705
00:32:31,520 --> 00:32:32,280
Speaker 3: the mass buyer.

706
00:32:33,280 --> 00:32:37,440
Speaker 8: Yeah, you're right, Caroly and Thames, Dad and Katie are

707
00:32:37,480 --> 00:32:41,040
Speaker 8: good examples. Time's dad would be an early adopter. He's

708
00:32:41,080 --> 00:32:44,160
Speaker 8: someone who wanted the latest technology. He's willing to pay

709
00:32:44,240 --> 00:32:46,360
Speaker 8: up for it and not wait around for the discounts.

710
00:32:46,800 --> 00:32:50,680
Speaker 8: And Katie is a pragmatic mainstream buyer. And they're looking

711
00:32:50,760 --> 00:32:53,560
Speaker 8: at evs and saying the price, the average price of

712
00:32:53,600 --> 00:32:56,160
Speaker 8: a need to B is sixty thousand dollars, about thirteen

713
00:32:56,200 --> 00:32:59,560
Speaker 8: thousand more than a traditional car, which is already up

714
00:32:59,640 --> 00:33:02,520
Speaker 8: to begin with anyway. And they're also looking at the

715
00:33:02,600 --> 00:33:06,920
Speaker 8: charging infrastructure, and in places that are not California, there

716
00:33:06,960 --> 00:33:08,920
Speaker 8: aren't a lot of chargers out there. One of the

717
00:33:08,920 --> 00:33:15,120
Speaker 8: dealers I spoke with has dealerships in Kansas and Nebraska

718
00:33:15,280 --> 00:33:18,760
Speaker 8: and Colorado, and when he does his weekly two hundred

719
00:33:18,760 --> 00:33:22,760
Speaker 8: mile commute between Omaha and Kansas City, there's one charging station.

720
00:33:23,800 --> 00:33:26,240
Speaker 11: Yeah, but isn't this what the government's for to step

721
00:33:26,280 --> 00:33:28,760
Speaker 11: in here and be like, look, that shouldn't be a problem.

722
00:33:28,960 --> 00:33:29,920
Speaker 2: Let's create in it.

723
00:33:30,160 --> 00:33:33,400
Speaker 11: Let's make sure the infrastructure is there where we need it,

724
00:33:33,480 --> 00:33:36,800
Speaker 11: and let this you know, industry not linguish.

725
00:33:36,880 --> 00:33:38,240
Speaker 2: Who killed the electric cooky?

726
00:33:38,480 --> 00:33:40,080
Speaker 11: Isn't that the movie?

727
00:33:40,320 --> 00:33:44,040
Speaker 8: Yeah? I think it was the movie. The government is

728
00:33:44,080 --> 00:33:50,000
Speaker 8: spending billions on, you know, acresting the infrastructure, expanding the infrastructure,

729
00:33:50,320 --> 00:33:52,800
Speaker 8: but we're still trying to figure out what plug it

730
00:33:52,800 --> 00:33:56,000
Speaker 8: should be because you know, Tesla has one type of

731
00:33:56,080 --> 00:33:58,880
Speaker 8: charger which the industry seems to be moving to, but

732
00:33:59,200 --> 00:34:02,120
Speaker 8: there is a lately other type of charger that's available.

733
00:34:02,120 --> 00:34:04,840
Speaker 8: So we still have sort of a VHS and Betamax

734
00:34:04,880 --> 00:34:07,400
Speaker 8: thing going on with charging stations. And by the way,

735
00:34:07,400 --> 00:34:10,160
Speaker 8: they're not very reliable. JD Power has found over and

736
00:34:10,200 --> 00:34:11,920
Speaker 8: over again many are broken.

737
00:34:12,400 --> 00:34:15,400
Speaker 2: It's not just that crazy. It's not just that the

738
00:34:15,560 --> 00:34:20,279
Speaker 2: charging stations are unreliable. It's that you actually reported and

739
00:34:20,320 --> 00:34:22,919
Speaker 2: Carol and I were surprised to find this that there's

740
00:34:22,920 --> 00:34:26,000
Speaker 2: some reliability issues when it comes to the batteries in

741
00:34:26,040 --> 00:34:30,000
Speaker 2: these vehicles. Cool thought. I thought these I thought evs

742
00:34:30,040 --> 00:34:32,959
Speaker 2: were supposed to be maintenance free, never have to change

743
00:34:32,960 --> 00:34:35,120
Speaker 2: the oisle. All you got to do is change the tires.

744
00:34:35,120 --> 00:34:38,160
Speaker 2: Every what one thousand miles or something. No, I exaggerate,

745
00:34:38,200 --> 00:34:40,200
Speaker 2: but you do have to change the tires more frequently.

746
00:34:41,000 --> 00:34:44,280
Speaker 8: Well, that is certainly the dream, but the reality is

747
00:34:44,280 --> 00:34:47,279
Speaker 8: is that electric vehicles have eighty percent more problems than

748
00:34:47,400 --> 00:34:50,440
Speaker 8: internal combustion engine vehicles. And as you said, most of

749
00:34:50,480 --> 00:34:55,440
Speaker 8: that problem is with the battery and the battery taking

750
00:34:55,480 --> 00:34:57,560
Speaker 8: a charge. I talked to Jake Fisher, the head of

751
00:34:57,880 --> 00:35:01,560
Speaker 8: auto testing at Consumer Reports, and what happens is people

752
00:35:01,600 --> 00:35:03,359
Speaker 8: plug in their car. This is not the fault of

753
00:35:03,760 --> 00:35:06,760
Speaker 8: the external charger. This is not a charging station problem.

754
00:35:06,760 --> 00:35:09,359
Speaker 8: It's a car problem. They plug in their car and

755
00:35:09,400 --> 00:35:11,839
Speaker 8: it won't take a charge at all, or it will

756
00:35:11,880 --> 00:35:13,880
Speaker 8: take a charge for a little bit and then it

757
00:35:13,920 --> 00:35:16,480
Speaker 8: shuts off. He compared it to not being able to

758
00:35:16,480 --> 00:35:19,520
Speaker 8: put gasoline into your internal combustion engine car. It's a

759
00:35:19,560 --> 00:35:20,520
Speaker 8: no go proposition.

760
00:35:21,600 --> 00:35:26,040
Speaker 2: Oh, I guess.

761
00:35:25,880 --> 00:35:29,320
Speaker 11: I should disclose here that I drive a Tesla Model

762
00:35:29,440 --> 00:35:31,160
Speaker 11: HY have never had that problem.

763
00:35:31,239 --> 00:35:32,040
Speaker 2: I've never heard.

764
00:35:31,880 --> 00:35:33,480
Speaker 11: Of of that problem.

765
00:35:33,520 --> 00:35:37,680
Speaker 2: But were you a relative cular Relatively it was on

766
00:35:37,719 --> 00:35:40,560
Speaker 2: the no, it was like with them. But you are

767
00:35:40,640 --> 00:35:42,560
Speaker 2: unique in the sense that you're actually the forgiving. If

768
00:35:42,560 --> 00:35:44,600
Speaker 2: I'm giving up too much about you, I've talked about it.

769
00:35:45,239 --> 00:35:47,360
Speaker 2: You live in New York and it's not an ideal

770
00:35:47,400 --> 00:35:49,160
Speaker 2: place to charge New York City. It's not an ideal

771
00:35:49,520 --> 00:35:50,360
Speaker 2: charge any so here.

772
00:35:50,320 --> 00:35:52,360
Speaker 11: Keith, this is actually a good segue another thing I

773
00:35:52,360 --> 00:35:55,640
Speaker 11: want to talk about, because there are charging stations that

774
00:35:55,680 --> 00:35:57,680
Speaker 11: you would use if you were out doing the two

775
00:35:57,760 --> 00:36:00,400
Speaker 11: hundred mile kind of drive that you were just describing

776
00:36:00,440 --> 00:36:03,480
Speaker 11: there that one of your sources had. But you know,

777
00:36:03,760 --> 00:36:06,960
Speaker 11: for most people who have electric cars, they charge at home, right,

778
00:36:07,000 --> 00:36:11,240
Speaker 11: And there are plenty of homes that have power outlets

779
00:36:11,280 --> 00:36:13,279
Speaker 11: that you can plug into and charge up overnight. So

780
00:36:14,000 --> 00:36:16,799
Speaker 11: why is that from a commuter standpoint, since that's what

781
00:36:16,920 --> 00:36:20,720
Speaker 11: most Americans are typically using their cars for. Why isn't

782
00:36:20,719 --> 00:36:22,160
Speaker 11: this working and resonating there?

783
00:36:23,239 --> 00:36:25,839
Speaker 8: Right? And that is the idea too, is to have

784
00:36:25,880 --> 00:36:29,680
Speaker 8: a charger in your garage. A couple of things on that.

785
00:36:29,840 --> 00:36:33,280
Speaker 8: Let's start again. The car's average price is sixty thousand dollars.

786
00:36:33,600 --> 00:36:35,919
Speaker 8: And then to install or charger in your garage, because

787
00:36:35,960 --> 00:36:38,719
Speaker 8: you don't just plug it in like a lamp, that's

788
00:36:38,760 --> 00:36:41,080
Speaker 8: another two grand. So you have to be a fairly

789
00:36:41,120 --> 00:36:45,840
Speaker 8: wealthy individual, present company excluded or included in order to

790
00:36:45,920 --> 00:36:50,000
Speaker 8: afford all of this expense, and mainstream buyers are balking

791
00:36:50,040 --> 00:36:53,440
Speaker 8: at that expense. They're saying, I mean, internal combustion engine

792
00:36:53,440 --> 00:36:55,879
Speaker 8: cars are too expensive on their own at forty seven

793
00:36:55,960 --> 00:36:59,360
Speaker 8: dollars on average, they are about they're you know, closer

794
00:36:59,360 --> 00:37:01,680
Speaker 8: to thirty thousand back in twenty nineteen. So there's been

795
00:37:01,840 --> 00:37:05,960
Speaker 8: this huge price inflation in cars in general, and evs

796
00:37:06,200 --> 00:37:09,200
Speaker 8: are priced like luxury cars.

797
00:37:09,239 --> 00:37:12,040
Speaker 11: Just for the record, I use superchargers when I need

798
00:37:12,120 --> 00:37:13,799
Speaker 11: to on the road and then have you know, while

799
00:37:13,840 --> 00:37:16,160
Speaker 11: outlets on the other side that I can charge with whenever.

800
00:37:16,400 --> 00:37:17,640
Speaker 2: My cousins who live in the city who have a

801
00:37:17,640 --> 00:37:19,680
Speaker 2: plug in hybrid can plug in the garage that they

802
00:37:19,760 --> 00:37:20,840
Speaker 2: pay a monthly feet at park in.

803
00:37:21,280 --> 00:37:23,440
Speaker 11: It don't look like I guess it depends on how

804
00:37:23,520 --> 00:37:26,240
Speaker 11: quickly you want to charge. But we are ultimately talking

805
00:37:26,239 --> 00:37:28,640
Speaker 11: about a ton of energy required to this. And it

806
00:37:28,680 --> 00:37:31,400
Speaker 11: does speak to Keith like when I first bought it

807
00:37:31,400 --> 00:37:34,160
Speaker 11: and I was paranoid about running out, you actually discovered

808
00:37:34,200 --> 00:37:36,400
Speaker 11: that the place that you in an emergency that you

809
00:37:36,400 --> 00:37:39,600
Speaker 11: would need to go is actually like r v's r

810
00:37:39,719 --> 00:37:43,600
Speaker 11: V like destinations. They have the outlet that you need.

811
00:37:43,640 --> 00:37:45,320
Speaker 11: So have you ever really in doubt It's like that

812
00:37:45,400 --> 00:37:47,000
Speaker 11: you know that you need the two twenty and you pull.

813
00:37:47,080 --> 00:37:48,000
Speaker 2: Is that listed in like this?

814
00:37:48,200 --> 00:37:49,799
Speaker 11: Well, it's just like you know, you start reading up

815
00:37:49,840 --> 00:37:52,880
Speaker 11: on what happens if you're you know, in desperate times,

816
00:37:52,880 --> 00:37:55,040
Speaker 11: in desperate places, and RV's are.

817
00:37:55,000 --> 00:37:56,440
Speaker 3: Figuring out these are the answer.

818
00:37:56,640 --> 00:37:59,799
Speaker 2: So Keith is some Americans know you know, well, Joel knows.

819
00:37:59,840 --> 00:38:01,799
Speaker 2: Now you could write a book and now you know,

820
00:38:02,400 --> 00:38:07,120
Speaker 2: I'd like to see the RVs.

821
00:38:06,760 --> 00:38:09,480
Speaker 11: I've never had to use that.

822
00:38:09,600 --> 00:38:13,200
Speaker 2: You know, there's an interesting miss crowds, right, no problem, Keith,

823
00:38:13,400 --> 00:38:18,720
Speaker 2: is ultimately the final destination when it comes to cars

824
00:38:18,719 --> 00:38:21,720
Speaker 2: here in the US. Is it ultimately going to be electric?

825
00:38:23,600 --> 00:38:26,239
Speaker 8: You know, that is certainly the way the regulations are

826
00:38:26,280 --> 00:38:29,279
Speaker 8: heading everything. You know, President Biden wants us to be

827
00:38:29,360 --> 00:38:32,560
Speaker 8: at fifty percent electric by twenty thirty and by twenty

828
00:38:32,640 --> 00:38:36,200
Speaker 8: thirty two two thirds electric. That's kind of a stretch

829
00:38:36,280 --> 00:38:39,960
Speaker 8: goal as far as the analysts and the industry say.

830
00:38:40,239 --> 00:38:43,200
Speaker 8: But it could be coming back to the hybrid point

831
00:38:43,200 --> 00:38:46,040
Speaker 8: that Joel started with, it could be that we have

832
00:38:46,160 --> 00:38:49,120
Speaker 8: more of an immediate hybrid future and that's going to

833
00:38:49,160 --> 00:38:52,600
Speaker 8: be more of the mainstream market. Remember, electric vehicles represented

834
00:38:52,640 --> 00:38:56,000
Speaker 8: only seven percent of sales, you know, last year, so

835
00:38:56,160 --> 00:38:59,320
Speaker 8: fewer than one in ten vehicles sold in America is electric.

836
00:39:00,000 --> 00:39:04,120
Speaker 3: One thing I'm curious. It's a global auto market, and

837
00:39:04,160 --> 00:39:07,319
Speaker 3: if you look overseas, whether it's Europe or China, as

838
00:39:07,320 --> 00:39:10,360
Speaker 3: you point out in your story, they are doing better

839
00:39:10,400 --> 00:39:14,319
Speaker 3: in terms of adoption. So if the US lags like

840
00:39:14,360 --> 00:39:17,440
Speaker 3: it seems to be doing at this point, Keith, what

841
00:39:17,600 --> 00:39:21,000
Speaker 3: disadvantage does it put the US at versus the rest

842
00:39:21,000 --> 00:39:21,520
Speaker 3: of the world.

843
00:39:22,280 --> 00:39:25,120
Speaker 8: Well, I mean we already see it in batteries. China

844
00:39:25,200 --> 00:39:29,120
Speaker 8: owns the battery market. You really can't have an electric

845
00:39:29,239 --> 00:39:34,040
Speaker 8: vehicle without Chinese battery or Chinese minerals or Chinese components.

846
00:39:34,120 --> 00:39:38,120
Speaker 8: So China is already leading the race. But obviously the

847
00:39:38,239 --> 00:39:42,479
Speaker 8: Chinese government can dictate how the electric vehicle market is

848
00:39:42,560 --> 00:39:45,560
Speaker 8: going to develop. I talked to one China expert, and

849
00:39:45,920 --> 00:39:48,000
Speaker 8: you know, if you live in Shanghai and you want

850
00:39:48,000 --> 00:39:52,319
Speaker 8: to a license plate for your internal combustion engine car,

851
00:39:52,440 --> 00:39:54,680
Speaker 8: you pay twelve thousand dollars. If you want one fear

852
00:39:54,719 --> 00:39:56,120
Speaker 8: your eavy, you pay nothing.

853
00:39:57,400 --> 00:40:01,600
Speaker 11: And as policy, as Boomer has reported before, like the

854
00:40:01,640 --> 00:40:03,600
Speaker 11: cost of even going on a big road trip with

855
00:40:03,600 --> 00:40:06,160
Speaker 11: an EV in China is cheaper than it would be

856
00:40:06,200 --> 00:40:08,880
Speaker 11: with a gas car. I mean they have fundamentally just

857
00:40:09,080 --> 00:40:11,440
Speaker 11: changed the pricing dynamics.

858
00:40:10,920 --> 00:40:13,120
Speaker 2: And the way that power generated that they used to charge.

859
00:40:13,200 --> 00:40:15,640
Speaker 11: Well, they keep building solar, right, but I mean, look,

860
00:40:15,680 --> 00:40:18,640
Speaker 11: no doubt they have tons of coal. So but the

861
00:40:19,280 --> 00:40:21,080
Speaker 11: fact that they were able to bring that price down

862
00:40:21,200 --> 00:40:25,440
Speaker 11: just and that the other amazing part about the Chinese

863
00:40:25,520 --> 00:40:28,680
Speaker 11: version of this. There is one adapter you know you use.

864
00:40:29,080 --> 00:40:30,440
Speaker 2: It is a unified system.

865
00:40:30,480 --> 00:40:33,000
Speaker 11: There's no confusion. Yeah, they have just said this is

866
00:40:33,040 --> 00:40:35,120
Speaker 11: a better way. And I will say, just you know,

867
00:40:35,239 --> 00:40:40,759
Speaker 11: a little propaganda from the editor of Business Week, whence

868
00:40:40,840 --> 00:40:41,600
Speaker 11: you go electric?

869
00:40:41,800 --> 00:40:44,040
Speaker 2: I think it's hard to go back. It's amazing.

870
00:40:44,120 --> 00:40:44,400
Speaker 1: It is.

871
00:40:44,560 --> 00:40:47,359
Speaker 11: I think it's a better technology. It's just getting people

872
00:40:47,480 --> 00:40:50,839
Speaker 11: to do it and believe it. But once you do it,

873
00:40:50,840 --> 00:40:53,000
Speaker 11: you're like, wow, this is more fun.

874
00:40:53,239 --> 00:40:55,640
Speaker 2: My mom drives the car more than my dad and

875
00:40:55,680 --> 00:40:58,839
Speaker 2: she's like, pretty much, this is this how you still

876
00:40:58,400 --> 00:40:59,560
Speaker 2: to carol?

877
00:40:59,800 --> 00:41:02,319
Speaker 11: You only places I take my dog now because I

878
00:41:02,360 --> 00:41:04,120
Speaker 11: have dog mode in my car electric car.

879
00:41:04,280 --> 00:41:05,920
Speaker 2: He just goes with us everywhere. You just put him

880
00:41:05,920 --> 00:41:07,200
Speaker 2: in the back and keeps the dog cool.

881
00:41:07,320 --> 00:41:09,680
Speaker 11: Yeah, you just set the temperature. Doug's in the back

882
00:41:09,880 --> 00:41:12,080
Speaker 11: and then he's not alone at home, you know, just

883
00:41:12,719 --> 00:41:13,520
Speaker 11: ke have you a.

884
00:41:13,400 --> 00:41:14,839
Speaker 2: Little movable dog? Create?

885
00:41:14,960 --> 00:41:15,160
Speaker 1: Keith?

886
00:41:15,160 --> 00:41:16,840
Speaker 2: Have you gone electric? Have you You've driven a lot

887
00:41:16,880 --> 00:41:19,000
Speaker 2: of electric cars? Have you gone electric? Just fine, drive, I've.

888
00:41:18,880 --> 00:41:20,920
Speaker 8: Driven a lot of electric cars. No, I drive an

889
00:41:20,920 --> 00:41:25,920
Speaker 8: internal combustion engine car. Why but yes, it's more convenient

890
00:41:25,960 --> 00:41:30,239
Speaker 8: here in Michigan where I'm based. And uh and you know,

891
00:41:30,320 --> 00:41:32,000
Speaker 8: I think what you see part of the reason that

892
00:41:32,040 --> 00:41:34,560
Speaker 8: the US has been slower to adapts. We're a big

893
00:41:34,640 --> 00:41:38,800
Speaker 8: country with wide open spaces that's very different than Europe.

894
00:41:38,920 --> 00:41:39,560
Speaker 2: That's a good point.

895
00:41:39,680 --> 00:41:41,759
Speaker 3: What a great story, Keith Noughton, Thank you so much.

896
00:41:41,760 --> 00:41:44,520
Speaker 3: Happy New Year to you, Keith Naughton. Of course, Bloomberg

897
00:41:44,560 --> 00:41:46,719
Speaker 3: News Auto Reporter, and are thanks to the editor of

898
00:41:46,719 --> 00:41:49,200
Speaker 3: Bloomberg BusinessWeek, Jill Webber. The dog thing you may have

899
00:41:49,239 --> 00:41:49,560
Speaker 3: got me?

900
00:41:49,760 --> 00:41:50,480
Speaker 2: Yeah, see.

901
00:41:52,520 --> 00:41:53,840
Speaker 3: This is Bloomberg.

902
00:41:59,640 --> 00:41:59,960
Speaker 7: Journal.

903
00:42:01,120 --> 00:42:02,120
Speaker 1: Now about you let me drive?

904
00:42:02,400 --> 00:42:05,800
Speaker 4: Oh no, no, no, no, please go job alright?

905
00:42:06,000 --> 00:42:07,719
Speaker 2: Please how the gravel?

906
00:42:08,320 --> 00:42:08,680
Speaker 1: Let's wat?

907
00:42:08,960 --> 00:42:12,840
Speaker 2: I want to try it. It's a good question.

908
00:42:16,640 --> 00:42:19,839
Speaker 1: This is the Drive to the Globes down Tim thing

909
00:42:19,960 --> 00:42:23,320
Speaker 1: Well Byron joon and On on Bloomberg Radio.

910
00:42:24,239 --> 00:42:27,160
Speaker 3: All right, everybody, we've got just about eighteen minutes left

911
00:42:27,239 --> 00:42:30,520
Speaker 3: in today's trading session, and the markets you just heard

912
00:42:30,560 --> 00:42:31,799
Speaker 3: Charlie break in it down a little bit of a

913
00:42:31,800 --> 00:42:35,040
Speaker 3: mixed trade higher on the Dow, a little bit lower

914
00:42:35,080 --> 00:42:36,919
Speaker 3: though on the S ANDP and NOWSK. It does feel

915
00:42:36,920 --> 00:42:40,440
Speaker 3: like we're kind of limping into twenty twenty four. But

916
00:42:40,480 --> 00:42:44,040
Speaker 3: we've got a big jobs report. Having said that, late

917
00:42:44,160 --> 00:42:47,280
Speaker 3: last year, you probably read this on the Bloomberg. Bloomberg

918
00:42:47,280 --> 00:42:51,200
Speaker 3: News highlighted the stock optimists who nailed twenty twenty three.

919
00:42:51,320 --> 00:42:53,600
Speaker 3: Among them Tim was Ryande Trek.

920
00:42:53,520 --> 00:42:56,560
Speaker 2: His chief market strategist at the Carson Group. He expected

921
00:42:56,600 --> 00:42:59,840
Speaker 2: the US economy to avoid a recession last year, Carol.

922
00:43:00,239 --> 00:43:02,880
Speaker 2: He also bet inflation would cool sooner than the market

923
00:43:02,960 --> 00:43:06,040
Speaker 2: was expecting. Ryan even added exposure to stocks during the

924
00:43:06,040 --> 00:43:09,000
Speaker 2: banking turmoil in March and as the SMB befetter'd Saink

925
00:43:09,000 --> 00:43:13,400
Speaker 2: in October. Looking like a pretty good series of calls.

926
00:43:14,000 --> 00:43:18,000
Speaker 3: Congratulations Ryan, because you were highlighted highlighted in our story

927
00:43:18,000 --> 00:43:20,520
Speaker 3: Happy New Year. How confident are you making a call

928
00:43:20,560 --> 00:43:21,160
Speaker 3: for this year?

929
00:43:22,160 --> 00:43:24,120
Speaker 4: Well, happy new Year, guys, thanks for having me back.

930
00:43:24,120 --> 00:43:26,960
Speaker 5: I mean, we're still pretty confident, right, we still will

931
00:43:26,960 --> 00:43:29,439
Speaker 5: we gain twenty four point two percent on the SMP

932
00:43:29,640 --> 00:43:32,560
Speaker 5: this year. You know, the history would say probably not,

933
00:43:33,120 --> 00:43:36,120
Speaker 5: but we think low double digit returns makes a lot

934
00:43:36,120 --> 00:43:38,280
Speaker 5: of sense. And again we can get into all the details,

935
00:43:38,320 --> 00:43:41,200
Speaker 5: but we just still see a strong consumer likely with

936
00:43:41,320 --> 00:43:45,560
Speaker 5: housing coming back, with manufacturing showing signs of bottoming, that

937
00:43:45,640 --> 00:43:47,680
Speaker 5: the odds of a recession, in our opinion, are still

938
00:43:47,760 --> 00:43:50,400
Speaker 5: quite slim. And when you can avoid a recession, stocks

939
00:43:50,440 --> 00:43:51,480
Speaker 5: tend to do well.

940
00:43:51,800 --> 00:43:52,799
Speaker 4: And here's one more.

941
00:43:52,840 --> 00:43:54,200
Speaker 5: I mean, I know the SMP hasn't made a new

942
00:43:54,280 --> 00:43:58,000
Speaker 5: high for like exactly two years, right, two years ago, yesterday, right,

943
00:43:58,080 --> 00:43:59,240
Speaker 5: and we think we're on to hit one eventually.

944
00:43:59,280 --> 00:43:59,960
Speaker 4: Here, we're not that far.

945
00:44:00,360 --> 00:44:02,360
Speaker 3: Well, we talked about this till fourteen times.

946
00:44:02,800 --> 00:44:03,080
Speaker 4: What's that?

947
00:44:03,120 --> 00:44:03,480
Speaker 2: Go ahead?

948
00:44:03,480 --> 00:44:04,839
Speaker 3: No, but I was gonna say, for in the last

949
00:44:04,840 --> 00:44:06,359
Speaker 3: two years, the S and P, if you really look

950
00:44:06,360 --> 00:44:08,360
Speaker 3: at it, has really gone nowhere. But forgive me, I

951
00:44:08,440 --> 00:44:10,360
Speaker 3: interrupted you and you had a smart thought. Go ahead.

952
00:44:11,040 --> 00:44:12,839
Speaker 5: Oh no, I don't know how smart it was. Well, we'll

953
00:44:12,880 --> 00:44:15,040
Speaker 5: see you let me know. But yeah, for two years

954
00:44:15,080 --> 00:44:17,960
Speaker 5: we've gone nowhere. But here's the thing. Since nineteen fifty, Carol,

955
00:44:18,000 --> 00:44:20,960
Speaker 5: I found fourteen times, the SMP went at least a

956
00:44:21,080 --> 00:44:22,600
Speaker 5: year without a new high, so a.

957
00:44:22,520 --> 00:44:23,439
Speaker 4: Long time without new high.

958
00:44:23,520 --> 00:44:26,000
Speaker 5: We're in that scenario now after it makes a new

959
00:44:26,040 --> 00:44:28,040
Speaker 5: high eventually, and it will this time, we're pretty sure.

960
00:44:28,080 --> 00:44:28,800
Speaker 4: We're pretty certain.

961
00:44:29,280 --> 00:44:33,160
Speaker 5: One year later, s AP's up thirteen out of fourteen times,

962
00:44:33,400 --> 00:44:36,080
Speaker 5: up like fifteen percent on average. So I hear so

963
00:44:36,120 --> 00:44:38,200
Speaker 5: many people saying, listen, we're up a lot. Last year,

964
00:44:38,200 --> 00:44:40,719
Speaker 5: we moved a lot. That is true, but zoom out.

965
00:44:41,040 --> 00:44:43,520
Speaker 5: Literally stocks almost gone nowhere for two years, and that

966
00:44:43,600 --> 00:44:45,759
Speaker 5: might be a reason to be bullish for investors.

967
00:44:46,040 --> 00:44:48,799
Speaker 2: What about when it comes to the technicals at the

968
00:44:48,840 --> 00:44:51,719
Speaker 2: start of the year, when because I know Ryan you

969
00:44:51,760 --> 00:44:53,640
Speaker 2: have I mean I follow you on I was going

970
00:44:53,719 --> 00:44:56,279
Speaker 2: to say Twitter, I follow you on X where you're

971
00:44:56,320 --> 00:44:59,480
Speaker 2: always tweeting about these technicals, the S ANDPF. I've hunder

972
00:44:59,520 --> 00:45:03,080
Speaker 2: down for day in a row. It has had We

973
00:45:03,080 --> 00:45:04,920
Speaker 2: don't know how it's gonna close, but mike close in

974
00:45:04,920 --> 00:45:06,760
Speaker 2: the rat If it does, it will not have closed

975
00:45:06,760 --> 00:45:09,640
Speaker 2: in the grain once this year. It's only been three days.

976
00:45:10,080 --> 00:45:12,759
Speaker 2: But does that poortend anything for the rest of the year.

977
00:45:14,120 --> 00:45:16,720
Speaker 4: Yeah, well, we would say no. I mean, it's awfully early.

978
00:45:16,800 --> 00:45:19,840
Speaker 5: Let's remember here, SMP's up as you guys talk about

979
00:45:19,960 --> 00:45:22,360
Speaker 5: nine weeks in a row. Right, you look at the

980
00:45:22,400 --> 00:45:26,960
Speaker 5: future returns after nine week wind streaks, it's pretty solid

981
00:45:27,040 --> 00:45:30,279
Speaker 5: six and twelve months later above average. Now listen, I'm aware, right,

982
00:45:30,280 --> 00:45:32,920
Speaker 5: we just had the Santa Claus rally period the last

983
00:45:32,960 --> 00:45:34,680
Speaker 5: five trading days of a year and then the first

984
00:45:34,680 --> 00:45:36,480
Speaker 5: two of a new year, and we were negative.

985
00:45:36,560 --> 00:45:37,919
Speaker 4: Right, that's pretty darn rare.

986
00:45:38,000 --> 00:45:40,279
Speaker 5: And you go back to last thirty years when we

987
00:45:40,400 --> 00:45:42,800
Speaker 5: didn't have Santa Claus come to town during those normal

988
00:45:42,880 --> 00:45:46,160
Speaker 5: seven bolish days. January has been read a good amount

989
00:45:46,200 --> 00:45:48,719
Speaker 5: of time. First quarter has been flat, So maybe we're

990
00:45:48,800 --> 00:45:52,040
Speaker 5: due for a well deserved break here, but we need

991
00:45:52,040 --> 00:45:55,880
Speaker 5: to see more worrisome signs tim specifically, where's the leadership

992
00:45:55,920 --> 00:45:59,480
Speaker 5: coming from, Like are utilities leading, is healthcare leading? You know,

993
00:45:59,560 --> 00:46:01,640
Speaker 5: staple leading some of the more defensive areas. We're not

994
00:46:01,680 --> 00:46:03,400
Speaker 5: seeing that yet. So the messages of the market to

995
00:46:03,480 --> 00:46:05,440
Speaker 5: us is we're probably just maybe due for a well

996
00:46:05,480 --> 00:46:07,839
Speaker 5: deserved break, and we still think that one more off

997
00:46:07,880 --> 00:46:10,680
Speaker 5: for you. It's the first quarter of an election year. Historically,

998
00:46:10,800 --> 00:46:13,880
Speaker 5: with all sixteen quarters of a four year presidential cycle,

999
00:46:14,080 --> 00:46:15,839
Speaker 5: this is one of the weakest quarters, so just got

1000
00:46:15,840 --> 00:46:18,359
Speaker 5: to be aware. And last year is obviously a good year, right,

1001
00:46:18,400 --> 00:46:20,399
Speaker 5: so be aware. Maybe we're in that timeframe we could

1002
00:46:20,440 --> 00:46:23,040
Speaker 5: catch our breath perfectly normal. We don't see any major

1003
00:46:23,080 --> 00:46:24,880
Speaker 5: warning signs cropping up just yet.

1004
00:46:24,960 --> 00:46:28,000
Speaker 3: Do you want defensives to rally or would that be

1005
00:46:28,080 --> 00:46:30,680
Speaker 3: a sign that things are coming undone a little bit?

1006
00:46:31,680 --> 00:46:33,719
Speaker 5: Yeah, No, that would be a great question, Carol. I mean,

1007
00:46:33,760 --> 00:46:35,640
Speaker 5: that'd be a sign things are probably coming undone. We

1008
00:46:35,800 --> 00:46:38,239
Speaker 5: don't want to see that type of leadership. I mean,

1009
00:46:38,520 --> 00:46:41,359
Speaker 5: you know, you look back in twenty twenty one, right,

1010
00:46:41,880 --> 00:46:44,719
Speaker 5: you know, or late twenty twenty one, defensives started to lead,

1011
00:46:44,719 --> 00:46:47,040
Speaker 5: and we all know twenty twenty two all the spiral

1012
00:46:47,080 --> 00:46:49,080
Speaker 5: that happened. So there was some warning signs in late

1013
00:46:49,120 --> 00:46:51,680
Speaker 5: twenty twenty one that maybe something's off. We're not seeing

1014
00:46:51,680 --> 00:46:54,000
Speaker 5: that though, want to be very clear. So we're encouraged

1015
00:46:54,040 --> 00:46:54,399
Speaker 5: by that.

1016
00:46:54,800 --> 00:46:57,319
Speaker 2: What are some things that could change your tune? You

1017
00:46:57,360 --> 00:46:59,360
Speaker 2: say you still see a strong consumer, the odds of

1018
00:46:59,400 --> 00:47:03,880
Speaker 2: recession are slim. What would make you say the odds

1019
00:47:03,880 --> 00:47:06,200
Speaker 2: of recession are no longer slim and they're looking more likely.

1020
00:47:07,160 --> 00:47:09,160
Speaker 5: Yeah, I mean, we love to follow the credit spreads

1021
00:47:09,160 --> 00:47:10,680
Speaker 5: and credit markets, and I don't come on you guys

1022
00:47:10,680 --> 00:47:12,439
Speaker 5: a lot. Last year, I think we talked about these things.

1023
00:47:12,440 --> 00:47:14,600
Speaker 5: What are what are the triple B spreads? Investor gate

1024
00:47:14,640 --> 00:47:17,400
Speaker 5: corporate spreads? Keep it fairly simple. If there's a monster

1025
00:47:17,560 --> 00:47:19,799
Speaker 5: under the bed, we think the credit markets would show it.

1026
00:47:19,800 --> 00:47:21,880
Speaker 5: Back in March, when we had the regional bank crisis

1027
00:47:21,880 --> 00:47:24,479
Speaker 5: and obviously a lot of worry, we didn't see credit

1028
00:47:24,560 --> 00:47:26,960
Speaker 5: spreads blowing out, so we saw that was an opportunity.

1029
00:47:27,000 --> 00:47:29,000
Speaker 5: We saw the same thing in October, So that to

1030
00:47:29,080 --> 00:47:30,680
Speaker 5: me is one that we're gonna watch and then on

1031
00:47:30,760 --> 00:47:32,640
Speaker 5: our team, you know, I know, you know, hopefully I

1032
00:47:32,640 --> 00:47:34,880
Speaker 5: can say the f wort on on the radio, the Fed,

1033
00:47:35,000 --> 00:47:35,400
Speaker 5: the Fed.

1034
00:47:35,840 --> 00:47:39,360
Speaker 3: You know, the producers in the control room a little

1035
00:47:39,400 --> 00:47:39,920
Speaker 3: nervous there.

1036
00:47:40,280 --> 00:47:45,319
Speaker 5: Freak them out, you know, it's Joe, Yeah, oh my god,

1037
00:47:45,400 --> 00:47:46,720
Speaker 5: you did the Fed?

1038
00:47:46,800 --> 00:47:47,200
Speaker 4: The Fed?

1039
00:47:47,560 --> 00:47:49,480
Speaker 5: You know, could there be a potential policy mistake. We

1040
00:47:49,520 --> 00:47:52,000
Speaker 5: think the Fed start cutting pretty soon, right. We were

1041
00:47:52,000 --> 00:47:53,600
Speaker 5: on that record, like you guys talked about when I

1042
00:47:53,600 --> 00:47:55,480
Speaker 5: first came on that that that they could.

1043
00:47:55,480 --> 00:47:56,239
Speaker 4: But now maybe they.

1044
00:47:56,160 --> 00:47:58,480
Speaker 5: Can stay a little hawkish and maybe that could upset

1045
00:47:58,480 --> 00:48:00,400
Speaker 5: the Apple car. We don't expect that to happened in

1046
00:48:00,400 --> 00:48:03,120
Speaker 5: the market where the market's voting right, I mean six cuts.

1047
00:48:03,120 --> 00:48:05,279
Speaker 5: It might be a little high, but that's something that

1048
00:48:05,320 --> 00:48:07,359
Speaker 5: could could be out there as well. But all who

1049
00:48:07,480 --> 00:48:09,120
Speaker 5: won more for you when you have a good end

1050
00:48:09,120 --> 00:48:12,120
Speaker 5: of year rally, like we just did up fourteen percent

1051
00:48:12,160 --> 00:48:13,879
Speaker 5: for the SMP the last two months of the year.

1052
00:48:14,120 --> 00:48:16,880
Speaker 5: When you've gained at least ten percent those last two months,

1053
00:48:17,000 --> 00:48:19,160
Speaker 5: what we happened six times the full next year has

1054
00:48:19,200 --> 00:48:21,920
Speaker 5: been higher six times a twenty percent on average. So

1055
00:48:22,040 --> 00:48:23,680
Speaker 5: I call that like a sling shot, right, I mean,

1056
00:48:23,680 --> 00:48:25,200
Speaker 5: when you have a lot of strength to end a year,

1057
00:48:25,560 --> 00:48:28,239
Speaker 5: history would say, listen, probably side with that following year

1058
00:48:28,280 --> 00:48:29,200
Speaker 5: still being pretty strong.

1059
00:48:29,280 --> 00:48:30,919
Speaker 3: It's a shame you don't have any kind of bull

1060
00:48:31,080 --> 00:48:35,600
Speaker 3: feelings out there, right. I want to ask that Apple,

1061
00:48:35,640 --> 00:48:37,680
Speaker 3: because you and I talked about this quickly, so then

1062
00:48:37,680 --> 00:48:39,799
Speaker 3: I can get my question. Apple's below it's ninety day

1063
00:48:39,840 --> 00:48:42,799
Speaker 3: moving average? Is that problematic? Quickly? Because Tim has a question.

1064
00:48:44,760 --> 00:48:47,399
Speaker 5: I mean for tech potentially, I mean Apple, we all

1065
00:48:47,440 --> 00:48:49,120
Speaker 5: know is very large. One of our big themes we've

1066
00:48:49,160 --> 00:48:51,000
Speaker 5: been talking about it for a while, is that rotation

1067
00:48:51,200 --> 00:48:54,080
Speaker 5: from large caps to small caps and mid caps and

1068
00:48:54,080 --> 00:48:57,200
Speaker 5: technology to industrials. We're seeing that. So sure, if you're

1069
00:48:57,280 --> 00:49:00,000
Speaker 5: overweight tech, that's that's a potential concern. But I mean

1070
00:49:00,080 --> 00:49:01,319
Speaker 5: there's a lot of other groups that I think are

1071
00:49:01,320 --> 00:49:03,120
Speaker 5: going to take that baton curl and that's just the

1072
00:49:03,160 --> 00:49:05,120
Speaker 5: next phase of this bowl market as we move forward

1073
00:49:05,120 --> 00:49:05,680
Speaker 5: in our opinion.

1074
00:49:06,000 --> 00:49:09,200
Speaker 2: Okay, Ryan, were you have you been at all bearish

1075
00:49:09,200 --> 00:49:10,120
Speaker 2: in the last few years?

1076
00:49:10,160 --> 00:49:14,920
Speaker 5: Be honest, Yeah, we were neutral equities, you know, the

1077
00:49:14,960 --> 00:49:17,239
Speaker 5: majority of I guess we'll see twenty twenty two, right,

1078
00:49:17,320 --> 00:49:20,319
Speaker 5: and we moved overweight equities late of October of twenty

1079
00:49:20,320 --> 00:49:22,560
Speaker 5: twenty two or November of twenty twenty two. Actually, So

1080
00:49:22,840 --> 00:49:25,680
Speaker 5: were we outright bearish? No, we were not, but we

1081
00:49:25,680 --> 00:49:28,440
Speaker 5: were even weight, and we had overweight fixed income as well.

1082
00:49:28,440 --> 00:49:31,800
Speaker 5: We've been underweight fixed income, overweight stocks, I'm sorry, overweight

1083
00:49:32,719 --> 00:49:34,839
Speaker 5: equities really since the end of last year.

1084
00:49:34,960 --> 00:49:37,799
Speaker 4: So you know, we'll see. But you know makes it.

1085
00:49:37,840 --> 00:49:39,920
Speaker 5: I mean, listen, seventy one percent of the time the

1086
00:49:39,960 --> 00:49:41,720
Speaker 5: stock market's up nine percent on average.

1087
00:49:41,760 --> 00:49:43,160
Speaker 4: We get all those things.

1088
00:49:43,280 --> 00:49:45,680
Speaker 5: But we've we've definitely thought there's some opportunity here and

1089
00:49:45,719 --> 00:49:47,920
Speaker 5: we still think that's the that's the case tim.

1090
00:49:47,800 --> 00:49:50,560
Speaker 3: Small caps, mid caps, financials. Those are still your three favorites.

1091
00:49:50,560 --> 00:49:52,800
Speaker 3: That's which told our print team just twenty seconds here.

1092
00:49:52,680 --> 00:49:54,680
Speaker 4: Real quick, that is exactly right.

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Speaker 5: I maybe throw industrials in there as well, those cyclical

1094
00:49:57,440 --> 00:49:59,880
Speaker 5: areas if you don't have a recession. This rotation for

1095
00:50:00,200 --> 00:50:02,760
Speaker 5: tech and large cap the smaller names of sixtical names,

1096
00:50:02,880 --> 00:50:05,000
Speaker 5: that's how we're positioning the models that we run for

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Speaker 5: our Carson partners.

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Speaker 3: All right, well, great to check in with you on

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Speaker 3: this these first few days of twenty twenty four in

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Speaker 3: d Trek, he's chief market strategist at the Carson Group,

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Speaker 3: joining us on this Thursday. You are listening and watching,

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Speaker 3: see you how your question is? This is Bloomberg.

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