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Markets, Fintech, Cars, And Ice Cream · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
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Speaker 1: my co host Matt Miller. Every business day, we bring
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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
0:15
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
0:18
Speaker 1: at Bloomberg dot com slash podcast. Coming into a lot
0:24
Speaker 1: of strategists, a lot of fund managers were saying, get
0:26
Speaker 1: ready for increased of volatility, and boy, it seems like
0:30
Speaker 1: at least for their first four weeks, they were right. Here,
0:32
Speaker 1: we've got a vix north of thirty one, we've got
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Speaker 1: read on the screen here today, let's check in uh
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Speaker 1: and see what we can expect going forward. Liz Young,
0:41
Speaker 1: she's head of investment strategy at so Far. Liz, thanks
0:45
Speaker 1: so much for joining us here. I guess one of
0:47
Speaker 1: the big issues you know that this market is trying
0:50
Speaker 1: to discount is the Federal Reserve. We know they're gonna
0:54
Speaker 1: raise rates, but now the question is by how much?
0:56
Speaker 1: How quickly? How do you guys think about that? Yeah?
1:01
Speaker 1: You know, I think first of all, you have to
1:03
Speaker 1: look at what the expectations are right now. And the
1:06
Speaker 1: reality of it is, we haven't moved yet, right. The
1:09
Speaker 1: Fed hasn't done anything yet, and they also haven't been
1:12
Speaker 1: all that clear about what they expect to have to
1:15
Speaker 1: do as far as rate hikes go. So it continues
1:19
Speaker 1: to be an uncertain and sort of convoluted picture, which
1:22
Speaker 1: is why the market is having so much trouble digesting
1:25
Speaker 1: it on a day to day basis. I think what
1:27
Speaker 1: actually happens is that they start to hike rates in
1:32
Speaker 1: spring of this year, but they're going to have to
1:34
Speaker 1: wait and see how much it affects things like inflation expectations,
1:39
Speaker 1: how much it affects things like the bond market. I
1:41
Speaker 1: think everybody's really hung up on how it's going to
1:43
Speaker 1: affect the equity market. But they're probably going to watch
1:45
Speaker 1: the bond market closer and then decide how much further
1:50
Speaker 1: they need to go with hikes through the rest of
1:51
Speaker 1: the year, so they'll remain basically data dependent UM, but
1:57
Speaker 1: I wonder how much they will care about they market.
2:00
Speaker 1: We were UM interviewing Greg Jensen from UM Bridgewater the
2:05
Speaker 1: other day and he said he thinks right now that's
2:08
Speaker 1: really not their main concern. In fact, um, the equity
2:11
Speaker 1: market they're probably a lot of speculative bubbles that have
2:14
Speaker 1: been blown up there that the Fed wooden't mind seeing
2:16
Speaker 1: deflated a little bit. Yeah, you know, I don't know
2:20
Speaker 1: that they're tasked with necessarily worrying about the speculative bubbles,
2:24
Speaker 1: but I would agree that they're not seeing the equity
2:27
Speaker 1: market as their first priority. And I said this on
2:31
Speaker 1: a show earlier this week. The Fed doesn't care about
2:33
Speaker 1: our feelings anymore, and I think that that's going to
2:36
Speaker 1: be the case. And you know, the equity market last year,
2:39
Speaker 1: we're looking at the SMP, it made seventy new all
2:41
Speaker 1: time highs. That's a pretty good place to come into
2:44
Speaker 1: the year on. So we can afford a pullback here.
2:48
Speaker 1: And the Fed's main mandate is to control prices, maintain
2:51
Speaker 1: stable prices, and maximum employment. So those are priorities number
2:56
Speaker 1: one and number two. The employment boxes all but checked,
2:59
Speaker 1: and now we're on two prices. Obviously there's an inflation
3:02
Speaker 1: problem that they need to deal with. I think that
3:04
Speaker 1: they're going to let the equity markets see volatility and
3:07
Speaker 1: they're not going to react to that unless it starts
3:09
Speaker 1: to threaten financial stability, which again ends up actually being
3:13
Speaker 1: more about the bond markets and the equity market. So
3:16
Speaker 1: what do you think we might see that the ten
3:18
Speaker 1: years it's gonna hit two percent before it hits one
3:20
Speaker 1: point five percent. How do you think about that, Liz? Yeah,
3:23
Speaker 1: you know, well, we've seen a huge run up in
3:25
Speaker 1: the ten year already this year, at thirty basis points
3:28
Speaker 1: since the beginning of the year, and that's pretty swift,
3:31
Speaker 1: which I think is another reason why the equity market
3:34
Speaker 1: is seeing so much of volatility. It has trouble with
3:37
Speaker 1: big spikes and yields. But I do think we could
3:40
Speaker 1: touch too. I think we could get above two and
3:42
Speaker 1: actually get even closer to two and a quarter before
3:46
Speaker 1: things sort of level out. Now we might have a
3:48
Speaker 1: little bit of a pause here because now the interesting
3:51
Speaker 1: part is we're in this waiting period. We're not going
3:54
Speaker 1: to hear from the Fed again until March sixteenth, and
3:56
Speaker 1: that's when everybody expects the first rate hike to happen.
3:59
Speaker 1: So there's a long period of time between now and
4:01
Speaker 1: then where the market has to kind of tredge through
4:04
Speaker 1: this uncertainty, and we might bounce around in a range
4:07
Speaker 1: on the tenure. But I think as we get closer
4:09
Speaker 1: and closer to rate hikes, you'll see the tenure get
4:11
Speaker 1: higher again, and I really do think that we can
4:13
Speaker 1: get above two in the first half of the year.
4:15
Speaker 1: Do you have any concern that we see I mean,
4:18
Speaker 1: I've looked back at rate hikes cycles for the last
4:20
Speaker 1: twenty years and you always get um the curve flattening,
4:26
Speaker 1: sometimes inverting. Is that a concern here? And do you
4:29
Speaker 1: think we'll hit a recession in Well, we've seen flattening
4:36
Speaker 1: already in the curve since Poul's statements earlier this week,
4:39
Speaker 1: So I think that the spread went from somewhere in
4:42
Speaker 1: the eight basis point basis point range down to the
4:45
Speaker 1: low sixties. Still pretty far from inverting. But that is
4:50
Speaker 1: one of those measures that I think the feed is
4:51
Speaker 1: going to watch. They don't necessarily watch the two tens.
4:55
Speaker 1: They might watch a shorter term measure versus the tenure,
4:59
Speaker 1: but they're not going to want the curve to invert,
5:01
Speaker 1: and they're very aware of that dynamic in the market.
5:04
Speaker 1: I don't think one or two rate hikes is going
5:07
Speaker 1: to invert the curve. But that's why I think, you know,
5:09
Speaker 1: the market suggesting that we're going to have five or
5:12
Speaker 1: more rate hikes this year is a little ahead of
5:15
Speaker 1: itself because that would probably cause an inversion, and I
5:18
Speaker 1: don't think the FET is going to do that, so
5:20
Speaker 1: they're going to keep their eye on it. I don't
5:22
Speaker 1: see a recession coming. I think Jerome Powell has been
5:25
Speaker 1: very careful trying to thread this needle, and he's going
5:28
Speaker 1: to continue to be careful. The idea is to allow
5:32
Speaker 1: the recovery to continue. Uh. One of the ways that
5:35
Speaker 1: you allow it to continue is to make sure that
5:37
Speaker 1: inflation doesn't get in the way. Liz thirty seconds kind
5:40
Speaker 1: of what's your best idea for where to be here
5:42
Speaker 1: in this rising interest rade environment? I mean you want
5:46
Speaker 1: to look at short duration assets that goes for equities,
5:49
Speaker 1: you know, thinking about UM, some of those cyclical sectors,
5:52
Speaker 1: some of the dividend payers that are going to do
5:54
Speaker 1: well here in the short term with volatility. I'd also
5:56
Speaker 1: look at health care for a long term idea. And
5:59
Speaker 1: in national I think this is the year where international
6:02
Speaker 1: investing has a revival, both in narrative and returns. Alright, Liz,
6:07
Speaker 1: thanks so much for joining us. A pleasure having you
6:10
Speaker 1: on and UM it's exciting to see what's going on
6:13
Speaker 1: at so far as well. So great to get your
6:16
Speaker 1: take this morning. Liz Young there, she is the head
6:19
Speaker 1: of investment strategy for so Far, and that is a
6:23
Speaker 1: business that it's growing. We saw them um get more
6:26
Speaker 1: licensed bank over the last week and so um they're
6:30
Speaker 1: offering uh, just a huge platform full of products. Uh
6:34
Speaker 1: and I guess the kids. It's just it's not just
6:36
Speaker 1: the kids anymore. I don't think so. I think I'm
6:39
Speaker 1: seeing a lot more about it, and uh, I think
6:41
Speaker 1: it's a certainly great option financial services. No, Matt, we
6:48
Speaker 1: talk a lot about fintech, financial technology, we talk a
6:51
Speaker 1: lot about crypto, but it's just it just seems to
6:54
Speaker 1: me that some of the traditional financial institutions are just
6:58
Speaker 1: slow to embrace the whole fintech thing. It just feels
7:01
Speaker 1: that way to me. I'm not sure that's look at
7:03
Speaker 1: look at the so Far exactly right. We're just talking
7:06
Speaker 1: to the so Far analyst. But you know, I saw
7:08
Speaker 1: the news recently that UBS agrees to buy robo advisor
7:11
Speaker 1: wealth Front, uh, kind of a fintech player, for at
7:13
Speaker 1: one point four billions. So that kind of gets your attention.
7:15
Speaker 1: But I'm gonna get a sense of how some of
7:18
Speaker 1: these traditional financial institutions are thinking about embracing and investing
7:22
Speaker 1: in financial technology. You can talk about that with Robin Vince,
7:25
Speaker 1: vice chair and CEO of Global Market Infrastructure for B
7:30
Speaker 1: and Y. Melon. Robin, you've been in the financial services
7:33
Speaker 1: industry for decades. You've seen it evolve. Do you feel
7:38
Speaker 1: like the traditional banks, financial institutions are fully embracing kind
7:44
Speaker 1: of fintech, crypto, some of the new changes in financial services. Well, first,
7:49
Speaker 1: it's great to be with you today, Paul and Matt
7:52
Speaker 1: um here here are being why Melon, We love the
7:54
Speaker 1: show and I'm speaking you to you today from our
7:57
Speaker 1: headquarters here in downtown New York City, which is really
8:00
Speaker 1: one of the centers of innovation that we've seen in
8:03
Speaker 1: the financial world over the course of our history of
8:06
Speaker 1: two and thirty seven years. But look to the point
8:10
Speaker 1: of old firms versus new we don't see it in
8:14
Speaker 1: that binary way. We just view our position at the
8:18
Speaker 1: very harder financial infrastructure allowing us to really be an innovator. Look,
8:23
Speaker 1: we touch one fifth of the world's investible assets, We
8:27
Speaker 1: service a super majority of global institutions, and so we're
8:30
Speaker 1: super well positioned at that exact intersection of the trust
8:34
Speaker 1: that we have from our franchise and that gives us
8:36
Speaker 1: the ability to innovate, and you can see that in
8:39
Speaker 1: a in a whole bunch of different things that we've
8:41
Speaker 1: been doing. We announced a crypto custody effort at the
8:45
Speaker 1: beginning of last year, the effort into e bills that
8:49
Speaker 1: we're doing with Verizon. There's just a whole long list
8:52
Speaker 1: of things that we're doing. And frankly, we think it's
8:54
Speaker 1: a strength to have the established franchise that we do
8:57
Speaker 1: today along with that innovation. Sure. I mean, I was
9:00
Speaker 1: gonna say in a lot of ways, b n Y
9:02
Speaker 1: Melon is on the cutting edge of this stuff. And
9:04
Speaker 1: you have been UM leaders. Tom Keane would probably say
9:08
Speaker 1: something like on the avant garde, UM, but you don't
9:13
Speaker 1: see that much enthusiasm from the rest of the street
9:17
Speaker 1: compared to UM where you see it in the city,
9:21
Speaker 1: where you see it in Miami. Um, what do you
9:25
Speaker 1: think we're gonna we're gonna end up with here? I mean,
9:28
Speaker 1: it's not gonna be just old Wall Street banks running
9:31
Speaker 1: our finances in the future. So uh, it's going to
9:37
Speaker 1: be a best of both worlds. And we welcome the
9:39
Speaker 1: competition and frankly, the push that all of these fintech
9:44
Speaker 1: and new industry players are really providing into the space.
9:47
Speaker 1: But for us, it's about taking that client franchise, we've
9:51
Speaker 1: got the trust that we enjoy with our clients and
9:53
Speaker 1: then innovating. So let me give you an example. So
9:55
Speaker 1: we we announced late last year the industry first collaboration
9:59
Speaker 1: with Verizon on real time e builds and payments for
10:02
Speaker 1: US retail clients. Now we're America's oldest bank, but we're
10:07
Speaker 1: the first bank to do real time payments and real
10:10
Speaker 1: time request for payments, which is enabling for the first time,
10:15
Speaker 1: real direct, real time payments from a consumer to a business,
10:21
Speaker 1: cutting out the interchange fees, cutting out the inefficiency, cutting
10:24
Speaker 1: out the environmental negative footprint of paper and fuel. And
10:29
Speaker 1: so that's a great example of exactly that type of innovation.
10:33
Speaker 1: And I'm gladn't to Fintake that did it. It was us.
10:35
Speaker 1: I'm glad you mentioned the environmental aspect because E s
10:38
Speaker 1: G has been kind of a buzzword and I'm sure
10:39
Speaker 1: there's going to be a lot of greenwashing. But you're
10:41
Speaker 1: also pushing for more diversity, to include women in your
10:47
Speaker 1: higher ranks to advanced junior bankers. Tell us about that
10:50
Speaker 1: push because it's really taken on a lot of meaning
10:52
Speaker 1: this year or last year. Yeah, and it really is
10:57
Speaker 1: a critical point. We have one of the most diverse
11:00
Speaker 1: boards in the industry and we're super proud of that.
11:03
Speaker 1: For the fifteenth consecutive year, we received a score of
11:06
Speaker 1: a hundred on the Human Rights Campaign Foundations Corporate Equality Index.
11:11
Speaker 1: It's the fifth year in the row that BN Y
11:13
Speaker 1: Melons included in the Bloomberg Gender Equality Index, and we're
11:18
Speaker 1: really proud to be named as one of those firms.
11:21
Speaker 1: It's really driving the equity and inclusion, and we're doing
11:23
Speaker 1: it at the top, and we're doing it through the organization,
11:26
Speaker 1: and it's the only way to be competitive over the
11:29
Speaker 1: course of the coming years, as well as being the
11:32
Speaker 1: right thing to do. Yeah, Robin, I worked on Wall
11:34
Speaker 1: Street for a long time and what I found in
11:36
Speaker 1: my experience and then even managing a business here at
11:39
Speaker 1: Bloomberg is you know you can bring in if you
11:41
Speaker 1: look at the entering analysts class at any investment bank,
11:44
Speaker 1: any financement institution UM over the last decade plus, it
11:48
Speaker 1: will look very representative of the marketplace. It will have
11:52
Speaker 1: a proper diversity UM. But then when you get up
11:55
Speaker 1: to the managing director ranks, the partner ranks. That's where
11:58
Speaker 1: the you know, the real glaring disparities you kind of
12:03
Speaker 1: show themselves. How do you think if an institutions can
12:06
Speaker 1: do to kind of improve that trend? Were You're right
12:11
Speaker 1: that that is the challenge. Being able to hire full
12:15
Speaker 1: range of diversity at the entry level is obviously sort
12:19
Speaker 1: of table stakes at this point. It's about development and
12:24
Speaker 1: retention and what what goes into development and retention. That's
12:28
Speaker 1: ultimately about opportunity training, giving people not only the pay
12:34
Speaker 1: but also the interesting problems to solve, and that for
12:37
Speaker 1: us is one of the things that we're very proud of.
12:40
Speaker 1: We have forty six trillion dollars worth of assets under custody.
12:43
Speaker 1: We touched twenty percent of the world's investible assets. We
12:48
Speaker 1: put ten trillion dollars of US treasuries through our platform
12:51
Speaker 1: every day, and we have this incredible franchise where we're
12:56
Speaker 1: proud to call fortune companies, uh, you know, our clients
13:01
Speaker 1: and of the top one hundred banks. And so when
13:04
Speaker 1: you have that type of relevance and you have interesting
13:07
Speaker 1: opportunities and problems for people to solve, that's how you
13:11
Speaker 1: retain great people through the life of their careers. Can
13:14
Speaker 1: I can I just get your take on the health
13:16
Speaker 1: of New York City? UM to finish up, because you're
13:18
Speaker 1: involved in civic service here in New York as well,
13:21
Speaker 1: and you mentioned at the top, do you think New
13:24
Speaker 1: York City is bouncing back from this pandemic with strength?
13:29
Speaker 1: With a bank of New York, We're never going to
13:31
Speaker 1: bet against New York City. And you know, I sit
13:34
Speaker 1: here in our office today in downtown New York and
13:36
Speaker 1: of course we're having to all deal with the challenges
13:39
Speaker 1: that Macron has presented to us all. But I'm excited
13:43
Speaker 1: for the fact that we're going to be welcoming our
13:45
Speaker 1: people back to the office in due course. And I'm
13:47
Speaker 1: a believer in the fact that the world has changed
13:50
Speaker 1: and it won't be five days a week, every day,
13:53
Speaker 1: everyone in the office all the time. We're going to
13:55
Speaker 1: take advantage of all these learnings that we've had over
13:58
Speaker 1: the course of the past couple of years. We're going
13:59
Speaker 1: to be a more hybrid organization that's going to go
14:02
Speaker 1: back to your prior point about retention. It's going to
14:04
Speaker 1: be important for that. But at the same time, being
14:07
Speaker 1: in the office some of the time at least together
14:11
Speaker 1: and contributing to the vibrancy of the city, but also
14:14
Speaker 1: contributing to that sense of culture and community, developing people,
14:17
Speaker 1: making them excited to be here. That's ultimately what our
14:20
Speaker 1: future looks like. All right, Robin, thank you so much
14:23
Speaker 1: for taking the time to join us. To really appreciate
14:25
Speaker 1: getting your perspective. Uh boy, long time at Goldman Saxon.
14:29
Speaker 1: Now at the Bank of New York, Melon, Robin Vince,
14:32
Speaker 1: Vice Chair and CEO of Global Market Infrastructure at b
14:35
Speaker 1: n Y Melon, and you know, a good broad perspective
14:38
Speaker 1: of financial services, um, and the pivot towards the I guess,
14:42
Speaker 1: the embracing of financial technology and in the office. Yeah,
14:47
Speaker 1: and in the office, I mean I think you know,
14:49
Speaker 1: the city is going to be coming back pretty aggressively
14:51
Speaker 1: over the next several weeks and months. We are going
14:57
Speaker 1: to talk a little bit about robots, and I will
15:00
Speaker 1: uh well, bringing Laura right right now. Um. She is
15:03
Speaker 1: a reporter slash producer, UM woman about town out of
15:08
Speaker 1: London and uh a friend of mine, I will say. Also,
15:12
Speaker 1: one of my good friends from San Francisco is going
15:15
Speaker 1: to join us, Ed Ludlow. He covers all things tech
15:18
Speaker 1: plus Tesla and Rivian for us. So the e V sector,
15:22
Speaker 1: I guess that includes Lucid and Nicola And looking at
15:26
Speaker 1: the stocks are they've been under pressure here, boy, they
15:28
Speaker 1: have been. And um, why don't we kick it off
15:31
Speaker 1: first with Laura because Tesla came out with earnings and
15:34
Speaker 1: they were a bit disappointing. Um in that UM, I
15:38
Speaker 1: guess the numbers themselves weren't so bad. Um, but the
15:43
Speaker 1: production plan doesn't seem to be anywhere near where we
15:47
Speaker 1: thought it should be, right Laura, Yeah, that's right, Matt. Well,
15:50
Speaker 1: the operational factories in Fremont, California and Shanghai, we learned
15:55
Speaker 1: that they've been under producing. The nightmare supply chain crunch
15:59
Speaker 1: that Elon Musk tweeted about at the end of last
16:02
Speaker 1: year has seemed to become a reality. So we knew
16:06
Speaker 1: going into these results right that Tesla had achieved record deliveries.
16:10
Speaker 1: It was a record profit in spite of the supply
16:14
Speaker 1: chain difficulties that will be ahead. Tesla did, however, maintain
16:19
Speaker 1: that delivery target of fi annual growth. And one interesting
16:24
Speaker 1: note from Morgan Stanley. They believe the bull case narrative
16:29
Speaker 1: hasn't really changed, but it wasn't a spectacular results, as
16:34
Speaker 1: we might have hoped, would change the balls minds on Tesla.
16:38
Speaker 1: I mean Tesla balls minds cannot be changed, so whatever. Um.
16:42
Speaker 1: The interesting juxtaposition to this ed, I think in a
16:46
Speaker 1: way is the story that you broke on Rivian now
16:49
Speaker 1: compares Rivillian Rivan's current production to that of Tesla when
16:52
Speaker 1: they first started. But the idea is these guys have
16:55
Speaker 1: it together in a slightly more I guess organized way. Yeah,
16:59
Speaker 1: I mean the stocks under pressure. It just hit fifty bucks.
17:02
Speaker 1: The more Stark has been crushed, but it's still fifty
17:05
Speaker 1: billion dollar company, which in me is shark right, and
17:07
Speaker 1: it's largely pre revenue, right. They just started booking revenue
17:10
Speaker 1: revenue of these things. But what sources tell me is
17:12
Speaker 1: that the end of fourth quarter was tough. You know,
17:16
Speaker 1: there were COVID outbreaks at the plant. They had an
17:18
Speaker 1: all hands on deck kind of scenario to get these
17:20
Speaker 1: pickup trucks, which I'm starting this scene now by the
17:23
Speaker 1: way in San Francisco on the streets. Um. And then
17:26
Speaker 1: they try to introduce a new product onto the assembly line,
17:29
Speaker 1: which they share an assembly line, and you know, production
17:32
Speaker 1: really slowed down. So what they did new year's day,
17:35
Speaker 1: Boom shut down the assembly line altogether fixed the problems
17:38
Speaker 1: restarted on January the nine, and since then they're ramping
17:41
Speaker 1: up like massively. You know, it's almost two trucks a
17:44
Speaker 1: week um, which is what are they making. They're making
17:47
Speaker 1: the R one T and the R N S is
17:50
Speaker 1: the S, but the R N S very modest volumes.
17:53
Speaker 1: In fact that the company's only publicly discussed that the
17:55
Speaker 1: CEO R J. Scarynge and the CFO claim mcdonna have one.
17:59
Speaker 1: No one else's publicly, you know, taking delivery of one yet.
18:02
Speaker 1: But I'm told they are building sailable vehicles. Sources say
18:05
Speaker 1: it's like, you know, a negligible number. So, Laura, what's
18:09
Speaker 1: the feeling in the EV marketplace as to boy the
18:13
Speaker 1: compety the competitive landscape is really beginning to change chairs.
18:16
Speaker 1: We have some of the you know, the big O E. M.
18:18
Speaker 1: S is, whether it's Volkswagener or Forward or General Motors
18:21
Speaker 1: really ramp up their EV game. What's the feeling about
18:24
Speaker 1: how the market share might shake out over the next
18:27
Speaker 1: several years. There is a feeling that competition is ramping up,
18:31
Speaker 1: and that poses questions long term for Tesla's volume and
18:35
Speaker 1: it's and its share price right. Focusing on Europe a
18:39
Speaker 1: little bit, Voxwagen. When we think of their total car sales,
18:42
Speaker 1: only five of fully electric. There's been a lot of
18:46
Speaker 1: hype about Ford recently they're pushing into electrification market shares
18:51
Speaker 1: surpassing one billion dollars for the first time. But Tesla
18:55
Speaker 1: is still by far the market leader for evs and
18:59
Speaker 1: for back trees. So the cyber truck, which I know
19:02
Speaker 1: Matt Miller will want to come onto that. What's concerned
19:04
Speaker 1: Initially that the new batteries which are more efficient used
19:08
Speaker 1: in the cyber truck that was the reason behind the delay.
19:11
Speaker 1: Turns out the batteries are fine and tells us planning
19:13
Speaker 1: to use those more efficient batteries across all their models.
19:16
Speaker 1: So it still has that competitive advantage with technology. I mean,
19:20
Speaker 1: the thing is five isn't very little, right. Volkswagen makes
19:24
Speaker 1: ten million cars a year, so that's different than Tesla,
19:28
Speaker 1: although they really ramped up their production right there. What
19:31
Speaker 1: was it add like nine hundred thirty six thousand um
19:34
Speaker 1: for the for the full year. That's doing what they're
19:37
Speaker 1: doing well and in that sense, but Laura mentions the truck,
19:41
Speaker 1: what a huge disappointment on so many levels. I mean,
19:43
Speaker 1: first he breaks the window with the bowling ball or whatever. Remember,
19:49
Speaker 1: so embarrassing, and but I thought they were going to
19:51
Speaker 1: come out with it eventually. Now Ford is going to
19:54
Speaker 1: beat them, Rivan is beat them. Looks like Chevy's gonna
19:57
Speaker 1: beat that. Everyone's beating the market with the truck. Well, look,
19:59
Speaker 1: they just find it that supply chain issues are disrupting
20:02
Speaker 1: current production of Model Y Model three. Right, the cash
20:05
Speaker 1: cows the profitable vehicles, so they can't justify a product
20:08
Speaker 1: launch if they're not able to service and get the
20:10
Speaker 1: parts that they need to build volume on existing vehicles. Um,
20:15
Speaker 1: but this is a comms issue. Guys like think about
20:17
Speaker 1: earning season broadly across the SMP. Beating on the top
20:21
Speaker 1: and bottom line hasn't really counted for much the streets
20:23
Speaker 1: looking for how strong is the current core to how
20:26
Speaker 1: strong is the year? Elon must tweets going into this
20:28
Speaker 1: earnings having sort of spectacular announced he doesn't want to
20:31
Speaker 1: do Earny schools anymore because he's too busy that he'll
20:33
Speaker 1: outline a product roadmap. He goes on the cool and
20:36
Speaker 1: does not outline a product roadmap. In fact, he does
20:38
Speaker 1: the opposite. Sorry, guys, these products are all on the
20:40
Speaker 1: back burner because of supply chain issues. Um, it's a
20:44
Speaker 1: comms issue, all right. Ed Ludlow, thanks so much for
20:47
Speaker 1: joining us. Ed Lulow, West Coast correspondent for Bloomberg News
20:49
Speaker 1: and Bloomberg TV. Produce a law right joining us from London,
20:53
Speaker 1: getting the latest on e VS the secrets under some
20:57
Speaker 1: pressure here, lots of pieces supply chain issues, competition, but
21:04
Speaker 1: you know that Matt Miller's all over it. And I'm
21:10
Speaker 1: Nathan Hagar in the Bloomberg room in Washington. We do
21:14
Speaker 1: all scream for ice cream and we're very excited to
21:17
Speaker 1: bring in the CEO of Dryer's Grand ice Cream, Kim
21:22
Speaker 1: Pedal regum with us this morning. Kim, thanks for being here.
21:27
Speaker 1: I got the long straw because I'm probably the biggest
21:31
Speaker 1: fan of ice cream there is. You don't think so.
21:35
Speaker 1: I don't believe that anyone eats more ice cream than me.
21:38
Speaker 1: If I eat, are gonna throw down over this a
21:42
Speaker 1: pint a night. My wife thinks I'm a diet Yeah,
21:46
Speaker 1: I admit I split the pints with my wife. Kim,
21:48
Speaker 1: I gotta ask though. You know we're we're coming up
21:51
Speaker 1: to this northeaster here, we're racing for a lot of snow.
21:54
Speaker 1: What advice do you have for ice cream fans like
21:57
Speaker 1: us as we're digging in for the old here? Same
22:02
Speaker 1: is perfect for any weather, any occasion. I firmly believe that.
22:06
Speaker 1: So I don't think you need to temper it because
22:08
Speaker 1: it's cold outside. Uh, you know, put it on vanilla
22:12
Speaker 1: hogandah on top of a dessert item might be a
22:15
Speaker 1: wonderful way to spend a cold evening. So, um, you know,
22:18
Speaker 1: be creative. I've always wondered, you know, I've always wanted
22:23
Speaker 1: to start my own ice cream shop. And I could
22:26
Speaker 1: use dryers or you know, um, I could be you know,
22:30
Speaker 1: I could be a vendor for you What what would
22:33
Speaker 1: I do in the winter because people just don't go
22:35
Speaker 1: into ice cream shops as much in the winter. And
22:37
Speaker 1: I've always wondered, do I do ice cream in the
22:39
Speaker 1: summer and then like bagels in the winter or coffee
22:44
Speaker 1: in the winter, ice cream in this summer? What do
22:45
Speaker 1: you what do you typically see people do with small
22:48
Speaker 1: town shops? We see, I mean people eat ice cream.
22:52
Speaker 1: You'd be surprised people have ice cream all year round, um,
22:55
Speaker 1: which we love for the you know loyalists, we absolutely
22:59
Speaker 1: love them are Hogan Dash shops. UM see consumers all
23:02
Speaker 1: years round, and so we have you know, seasonal flavors.
23:05
Speaker 1: What I would say is, UM, in the winter months,
23:08
Speaker 1: try things like Hagan Dash peppermint, bark flavors like that.
23:12
Speaker 1: We have pumpkin pie UM flavors with our dryers and
23:16
Speaker 1: eat these brands. And in the summer go through a drumstick,
23:20
Speaker 1: take your cone and you know, take a walk outside. UM.
23:23
Speaker 1: But there is a product for every time of year,
23:27
Speaker 1: for sure, Dryer's Grand ice Cream. If I look across
23:29
Speaker 1: the portfolio, we've got something for everyone and every occasion.
23:33
Speaker 1: Have you thought about UM selling more alcoholic beverages because
23:38
Speaker 1: I love a boozy milkshake. UM. I can't remember where
23:41
Speaker 1: I first tried a Hummer. I think I was at
23:43
Speaker 1: a wedding in Detroit, and uh, delicious way to imbibe.
23:49
Speaker 1: But you don't see it much at ice cream shops,
23:53
Speaker 1: you don't. We have it. Hogan Dust brand has a
23:56
Speaker 1: spirit's collection, so we do have some alcohol infused flavors. UM.
24:02
Speaker 1: You know, ice cream is a product, so Dryer's Grand
24:05
Speaker 1: ice Cream. When I look at the portfolio and who
24:07
Speaker 1: buys our products and loves our products. It's across all ages,
24:10
Speaker 1: so you know there's families, kids, older consumers, and so
24:14
Speaker 1: we do have spirits products, um. And you can certainly
24:18
Speaker 1: mix and make your own. If you look online and Pinterest,
24:21
Speaker 1: you'll find lots of recipes for Outshine fruit bars in Champagne.
24:26
Speaker 1: They're just delicious. Um. So if that's what you're interested in,
24:30
Speaker 1: there their recipes and all. If that's where, that's where. Um.
24:35
Speaker 1: All right, So Kim, if I go to a store
24:37
Speaker 1: and I go to the ice cream, all am I
24:39
Speaker 1: going to find product? There? Are you guys seeing supply
24:42
Speaker 1: chain issues like seemingly every other business is. So I
24:48
Speaker 1: will say we I'll start with kind of a broad statement,
24:51
Speaker 1: but I really mean it. We have no plans of
24:54
Speaker 1: flowing down at dryers Grand ice Cream. So while the
24:57
Speaker 1: world around us, you know, there are supply chain challenge
25:00
Speaker 1: us for sure, we have spent the last year to
25:04
Speaker 1: two years really making contingency plans, backup plans to make
25:10
Speaker 1: sure that we can still deliver ice cream to our customers,
25:14
Speaker 1: so to our retailers and consumers no matter what. And
25:17
Speaker 1: so we have in in the last three months we've
25:21
Speaker 1: opened up three new um selling locations for retailers to
25:26
Speaker 1: source products from, so hold storage locations across the country
25:30
Speaker 1: and what that allows us to do is move inventory
25:32
Speaker 1: there be closer to the warehouses of some of our
25:36
Speaker 1: our biggest and best customers so that we can get
25:39
Speaker 1: product to them faster. Right as there are distribution challenges,
25:43
Speaker 1: the closer proximity you are, the easier it is to deliver.
25:47
Speaker 1: We have made huge investments, i will say, in our factories.
25:51
Speaker 1: So we have four factories across the in the United States.
25:55
Speaker 1: We have announced in the last twelve months fifteen new
25:59
Speaker 1: production lines across those factories. We are building out walls,
26:03
Speaker 1: facilities in every location and that's all around being able
26:07
Speaker 1: to produce more product so that it is on shelf
26:10
Speaker 1: when you go into your store. I'm thrilled, I'm pleased
26:13
Speaker 1: with every single employee in our manufacturing facilities, in our
26:18
Speaker 1: distribution network. That is what they're focused on. And what
26:22
Speaker 1: I would say is it's our results in the marketplace
26:26
Speaker 1: are showing that those investments in the infrastructure production capability.
26:31
Speaker 1: Because we know that the challenges are likely to continue
26:35
Speaker 1: for a while, we are poised and ready and doing
26:39
Speaker 1: everything we can to meet growing demand for ice cream.
26:42
Speaker 1: And I will say ice cream demand is going up.
26:45
Speaker 1: I wonder about pricing. UM, surely you felt massive inflation
26:50
Speaker 1: for your on the input side. Are you able to
26:52
Speaker 1: pass it off? We are, so we are seeing inflation
26:57
Speaker 1: on our cost structure, right, UM, like everybody is. We've
27:01
Speaker 1: been trying to find creative ways around having to impact
27:06
Speaker 1: consumers as little as possible on that. So trying to
27:10
Speaker 1: find places where there might have been inefficiency in our
27:14
Speaker 1: organization and our operations to use, you know, any savings
27:19
Speaker 1: to be able to cover those costs. We think some
27:21
Speaker 1: of the costs over time, you know, we'll come back down. UM.
27:25
Speaker 1: And and we're really looking hard at that. Certainly in
27:29
Speaker 1: some areas, UM. You know you see prices going up
27:32
Speaker 1: everywhere and UM, but we're doing everything in our power
27:36
Speaker 1: to minimize that. We're leveraging our global network of our
27:39
Speaker 1: ice cream global company UM to source products UM or
27:44
Speaker 1: ingredients for things where we can't get them locally, to
27:47
Speaker 1: be able to source them and make them available UM,
27:50
Speaker 1: and trying not to impact consumer pricing. Just thirty seconds
27:54
Speaker 1: left here, Kim, But I miss the full half gallon.
27:57
Speaker 1: I mean, right, I mean when you think about the pricing.
28:03
Speaker 1: You can't make the packaging any smaller poster for kids exactly.
28:09
Speaker 1: We have plenty of large sized products UM, big containers,
28:15
Speaker 1: half gallons. We also, you know, what we're seeing is
28:17
Speaker 1: real growth in snack products, so cones and sticks and sandwiches,
28:22
Speaker 1: and we're making lots of different multi packed versions of
28:25
Speaker 1: that to get at you know, the volume you're looking for,
28:28
Speaker 1: UM at a price point that you will also feel
28:30
Speaker 1: good about. Thanks so much for joining us. I think
28:33
Speaker 1: we're all excited to talk about ice cream. Even in
28:37
Speaker 1: uh January, it just snow, it started snowing. I agree.
28:43
Speaker 1: I agree with Kim. It isn't it is never too
28:45
Speaker 1: cold to eat ice cream. Yeah, I'm with you, So
28:49
Speaker 1: we'll see. But that was fun to get Kim on
28:51
Speaker 1: talking about the ice cream business. The way, if you're
28:53
Speaker 1: wondering about the hummer the recipe, a little khlua, some
28:57
Speaker 1: light rum and some vanilla ice cream, Kim would probably
29:01
Speaker 1: recommend some kind of bourbon vanilla from Hoggendoss. Mix that
29:04
Speaker 1: up and you're good to go. And uh, but don't
29:07
Speaker 1: drink too many because they go down, they go down
29:10
Speaker 1: real easy, and then you don't realize until later that
29:13
Speaker 1: it may have been too much. Thanks for listening to
29:19
Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to
29:22
Speaker 1: interviews of Apple Podcasts or whatever podcast platform you prefer.
29:27
Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three.
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Speaker 1: Pet On Fall Sweeney I'm on Twitter at pt Sweeney.
29:34
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29:36
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