Latest / Bloomberg Intelligence / Oil, Central Banks, Earnings, and Intel

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Oil, Central Banks, Earnings, and Intel · 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.
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Speaker 2: Every business day, we bring you interviews from CEOs, market pros,
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Speaker 2: and Bloomberg experts, along with essential market moving news.
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Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever
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Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.
0:20
Speaker 1: Let's talk about WTI Crudo. Matt just called it at
0:23
Speaker 1: where Dan We hit eighty dollars a barrel yesterday on
0:26
Speaker 1: WTA Crude. I don't know where this is coming, so
0:28
Speaker 1: let's bring in some people.
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Speaker 2: And it was fast, right. We went from seventy eighty
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Speaker 2: very quickly.
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Speaker 1: Exactly. We're blow sixty eight dollars in late June for
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Speaker 1: w TA crude. Now here we are at eighty. Go
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Speaker 1: figure Mike McLoone, though he knows what's going on. So
0:41
Speaker 1: does Fernando Valley. They are both analys covering the energy
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Speaker 1: space for Bloomberg Intelligence. Hey, Mike, let's start with you. You're
0:48
Speaker 1: done in Bambi, Miami, Florida. How is it now, tough guy?
0:52
Speaker 3: It's actually cooler here than you are there. You're high
0:55
Speaker 3: yesterday ninety in the low eighties, so you got it
0:59
Speaker 3: comes out the cool op.
1:00
Speaker 1: All right, buddy. How did we get here with wtacrude
1:03
Speaker 1: oil at eighty bucks a barrel?
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Speaker 2: We were at seventy at the beginning of July, so
1:06
Speaker 2: within a month we're up ten bucks.
1:08
Speaker 3: So let's look at it in the year. It's unchanged
1:10
Speaker 3: basically still actually down in the year, so it's basically
1:13
Speaker 3: bouncing from getting two over sold. But look at the
1:15
Speaker 3: macro big picture. What we did last year was one
1:18
Speaker 3: of the biggest pumps on a two year basis ever
1:21
Speaker 3: and it's in the back end of that. And the
1:23
Speaker 3: history of these things are very bad for crude oil,
1:26
Speaker 3: particularly if you have the federal reserve still tightening and
1:29
Speaker 3: disappointing data out of China. Those are current trends. So
1:32
Speaker 3: I'm still very veriss crude oil. I see it at
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Speaker 3: the upper end of the range. I still think it's
1:35
Speaker 3: more likely head towards forty and right now. One key
1:38
Speaker 3: thing that's really mattering for everything and muchly all risk asses,
1:42
Speaker 3: most notably copper and crude oils. The US stock market
1:45
Speaker 3: basically has to keep going just for these markets to
1:48
Speaker 3: stay stable. So that's the problem. If stock market actually
1:51
Speaker 3: drops a little bit. These assets are probably going to
1:54
Speaker 3: continue reverting last year's pumps.
1:56
Speaker 2: So that's the trader perspective, Fernando, What do we know
1:59
Speaker 2: about and demand here?
2:01
Speaker 4: Well, on the demand side, of course, Northern Hemisphere summer,
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Speaker 4: Paul's driving more to the shore. Yep, they're driving a
2:07
Speaker 4: little bit more consumption, but it's been slightly underwhelming on
2:10
Speaker 4: the last few numbers of the EIA. In July, of
2:12
Speaker 4: course you had the start of the Saudi Arabia the
2:14
Speaker 4: additional cuts that they promised in the last so Pack
2:17
Speaker 4: plus meeting, so that's probably sapping a little bit on
2:19
Speaker 4: the supply side. But when we look at the inventory figures,
2:22
Speaker 4: it hasn't changed drastically. It's really been this whole all right.
2:26
Speaker 4: We're coming to a soft landing in the economy, which
2:29
Speaker 4: Mike is just showing that the current data is not
2:32
Speaker 4: really pointing towards that direction. But there's an expectation that
2:37
Speaker 4: the soft landing is what will really put a pushes
2:40
Speaker 4: over the edge, and that's likely what's driving oil prices
2:44
Speaker 4: higher and the OPEC plus cut at least in the
2:47
Speaker 4: short term.
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Speaker 1: Excellent kind of missed numbers today. How do you do
2:51
Speaker 1: that if you're an energy company, I could make money
2:53
Speaker 1: as an energy company. What happened xceon.
2:55
Speaker 4: They've made money, And to be fair, they told you
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Speaker 4: they came right on in the range that they guided.
3:00
Speaker 1: Okay, four weeks ago.
3:02
Speaker 4: It's just going sense. It's a little slow to update sometimes. Okay,
3:04
Speaker 4: you know, unless they're a little stubborn, you wouldn't know
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Speaker 4: anything about that. But they still generated significant free cash flow,
3:12
Speaker 4: not enough to cover their buybacks, but they generated enough
3:16
Speaker 4: free cash flow. The good thing is they came into
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Speaker 4: the quarter with almost thirty three billion dollars in cash,
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Speaker 4: the debt under zero point two times. It stayed at
3:26
Speaker 4: that level, so they can still get to their thirty
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Speaker 4: five billion dollars of buybacks by the end of twenty
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Speaker 4: twenty four. Of course, that will probably mean higher leverage
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Speaker 4: unless Brent goes above eighty five.
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Speaker 2: Mike, how do you play earnings as a trader or
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Speaker 2: do you give us give us some trader insight for
3:45
Speaker 2: for those at home that want to play along. I mean,
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Speaker 2: when an earning season comes around, usually analysts are low balling, right,
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Speaker 2: but in this case is Fernando points out, they haven't
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Speaker 2: caught up with the with the forecast cut that we
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Speaker 2: got out of xceon how do you how do you play?
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Speaker 2: Is an opportunity the earnings.
4:01
Speaker 3: Well, the key thing to remember about energy equities versus
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Speaker 3: underlying energy measures as measured by the Bloomberg Energy Commodity Index,
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Speaker 3: is the equities typically outperforming. That was definitely the case
4:13
Speaker 3: last year, and it's still been the case this year.
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Speaker 3: The key thing is you look like the XL that's
4:17
Speaker 3: like the major ETF the tracks energy prices they're up.
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Speaker 3: It's almost almost the same thing as S and P
4:23
Speaker 3: five hundred. So that's the key thing. Remember, the energy
4:26
Speaker 3: equities can create more with less every day, and the
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Speaker 3: actual underlying commodities are succumbing to that, which is by
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Speaker 3: the price of crudial. Now it's first traded in about
4:33
Speaker 3: two thousand and six. But the key thing I want
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Speaker 3: to point out is a recent day that you mentioned
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Speaker 3: supplying demand. I enjoyed putting in my energy outlook is
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Speaker 3: this month the latest estimates and Department Energy is this
4:44
Speaker 3: month in July that the US is consuming about nine
4:47
Speaker 3: million barrels a day of motor fuel gasoline, which includes
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Speaker 3: that's and a I know Matt loves that compared to
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Speaker 3: twenty nineteen. In July, it's five percent below. And here's
4:56
Speaker 3: another statistic I really like pointing out that really accelerated
4:59
Speaker 3: is bloomb New Energy Finance point out that global EV
5:02
Speaker 3: sales are now about fifteen percent of new auto sales,
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Speaker 3: compared to the same period in twenty nineteen, it was
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Speaker 3: three percent. Wow, where's that going?
5:11
Speaker 2: Yeah, that's crazy. And by the way, that's only going
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Speaker 2: up right, I mean, who was it? I think I
5:16
Speaker 2: was talking a fatty b roll of the IA and
5:20
Speaker 2: he said he expects it to go over twenty percent
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Speaker 2: this year.
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Speaker 3: So but those of us own ebs, I said, there's
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Speaker 3: no way I'm going back. It's just a better way
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Speaker 3: to get around, all right.
5:28
Speaker 2: Fernando, I'm gonna go ahead and disagree with you.
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Speaker 3: There.
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Speaker 1: There's no replacement for displacement there, Mike, So, Fernando, our
5:37
Speaker 1: good friends. Then in the Permian, I mean, in other
5:40
Speaker 1: shell areas in US, they're pumping, aren't they.
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Speaker 4: Yeah, I mean, Chevron just broke their record seven hundred
5:45
Speaker 4: and seventy two thousand barrels a day in the second quarter,
5:47
Speaker 4: so they're trending towards that one million barrel a day
5:50
Speaker 4: by twenty twenty six that they aimed in excellent as well,
5:55
Speaker 4: producing significant barrels there. And I think we mentioned last time,
5:58
Speaker 4: but we think the five lar just producers in the
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Speaker 4: Permian are going to account for nearly fifty percent of
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Speaker 4: production by the end of the decade. That's Excellent, Chevron, Conical, Phillips, Pioneer,
6:08
Speaker 4: and Occidental. So they are growing. It's just not as
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Speaker 4: fast as that was once hoped. You know, the dreams
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Speaker 4: of us getting to sixteen eighteen million barrels a day
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Speaker 4: are probably in the rear view mirror.
6:20
Speaker 1: So what do we do now?
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Speaker 4: We do about twelve and a half, just under twelve
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Speaker 4: and a half.
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Speaker 1: Okay, how much do we We're net exporter.
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Speaker 4: Right, yes and no, it depends because we don't have
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Speaker 4: all the crews that we need, so we import some.
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Speaker 4: And yes, on a net.
6:35
Speaker 1: Stait, I think I can go down to Texas, Houston,
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Speaker 1: you know, raise some money from some good old boys
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Speaker 1: and start putting some holes in the ground, and eighty
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Speaker 1: dollars a barrel, I can make a lot of money.
6:45
Speaker 5: You would.
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Speaker 2: My cost it's like forty.
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Speaker 4: Right, it's it's it's forty just on the drilling side.
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Speaker 4: But then you have all the I mean, you're not
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Speaker 4: cheap okay, and you have to pay for you you
6:55
Speaker 4: have to pay for your CFO, you have to pay taxes,
6:58
Speaker 4: so your overall fully loaded costs are higher.
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Speaker 1: Me a wildcat.
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Speaker 4: And then you don't get eighty dollars, you get a
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Speaker 4: discount on that. And you don't only produce oil, you
7:06
Speaker 4: produce other things.
7:07
Speaker 2: Hey, Mike, does does the SPR play any play at
7:12
Speaker 2: all into the equation here? I mean, I know that
7:14
Speaker 2: we we drained it, you know, to buy votes for
7:17
Speaker 2: the Democratic Party before the midterms, which is you know
7:20
Speaker 2: that's what the SPR was for.
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Speaker 1: Nice straight?
7:22
Speaker 2: Are we gonna fill it back up? I thought the
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Speaker 2: idea was we're going to do that when it was low,
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Speaker 2: and it was low, and we didn't.
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Speaker 3: There was no hurry to do that. If you really
7:30
Speaker 3: compare it to when I was pumping gas at a
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Speaker 3: gas station in nineteen seventy nine is a gas jockey
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Speaker 3: and gas price went over a dour. We had a
7:37
Speaker 3: price in half gallons because of the analog tanks couldn't
7:40
Speaker 3: do that. There is a massive excess of supply. If
7:43
Speaker 3: you look at liquid fuels of US and Canada, around
7:47
Speaker 3: four million barrels a day. For those old days when
7:49
Speaker 3: US was a net importer are over. So the only
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Speaker 3: really reason you need the SPR notes for offsetting things
7:54
Speaker 3: like hurricanes and stuff, because we could ramp up that
7:56
Speaker 3: supply even more so if we want. I'm looking at
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Speaker 3: liquid fuel products in his countries. Basically all new high
8:02
Speaker 3: include liquid fuels because they have to include ethnome from
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Speaker 3: the farm. It's almost twenty million barrels a day. Our
8:07
Speaker 3: consumption peeked about fifteen years ago. So there's a very
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Speaker 3: bad trend for prices. And that's the key thing about SPR.
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Speaker 3: President Biden might go down as one of the best
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Speaker 3: oil traders in history.
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Speaker 2: All Right, all right, I heard it here. That's fascinating stuff.
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Speaker 1: Petroleum distribution engineer, that is the term.
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Speaker 2: That's what the gas jockey is. Were you pumping leaded gas?
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Speaker 1: Yes?
8:30
Speaker 2: Was that leaded? Mike?
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Speaker 1: I guess he's yes. Stop all right, all right, Mike mcloan,
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Speaker 1: he's back at on the pump. Mike mcgloan, Fernando Valley.
8:38
Speaker 1: They cover all the energy space for Bloomberg Intelligence. They
8:40
Speaker 1: put it in perspective for us.
8:42
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8:56
Speaker 1: Some of these central banks share we've had a lot
8:58
Speaker 1: of activity, including the Bank at Japan today. It I mean,
9:02
Speaker 1: when I look at the ECB, when I look at
9:03
Speaker 1: the FED, it seems like they're saying we're pretty much done.
9:07
Speaker 1: Is that kind of your takeaway?
9:09
Speaker 7: Yeah, I mean we knew that we were close to
9:11
Speaker 7: the end of the cycle, so the question was always
9:13
Speaker 7: would it take another turn of the screw basically to
9:16
Speaker 7: get us into the landing zone for both the FED
9:19
Speaker 7: and the ECB. And you know, the the central banks
9:23
Speaker 7: are signaling, are reinforcing that they essentially agree with the
9:27
Speaker 7: markets that that we're near the end. I still feel that,
9:35
Speaker 7: you know, we are currently in the state of I
9:38
Speaker 7: was thinking of using the term disinflation euphoria, but I
9:41
Speaker 7: think that kind of is a little too prioritive disinflation optimism,
9:46
Speaker 7: because there is you know, there's there's a reason, there's
9:49
Speaker 7: reason for it. But broadly speaking, I think that through
9:55
Speaker 7: the course of this whole inflation cycle, the our kids
10:00
Speaker 7: and policy makers have underestimated the resilience of the economy.
10:04
Speaker 7: They sort of look through a lot of the you know,
10:07
Speaker 7: the demand driven components of inflation, and people look very
10:11
Speaker 7: much at sort of you know, the the the subcomponents
10:15
Speaker 7: of you know of inflation used card.
10:18
Speaker 2: I have no idea why economists ignore it. Seems like
10:21
Speaker 2: ignore the demand driven side of it. Yeah, I don't
10:23
Speaker 2: get why. Why is that?
10:25
Speaker 7: Yeah, I think people want to declare victory, you know,
10:30
Speaker 7: and I think policy makers, everybody wants this to be over.
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Speaker 2: Well, yesterday we talked with Cam Harvey at Duke and
10:38
Speaker 2: he said, you know that the Fed's got it all wrong.
10:42
Speaker 2: It's not three percent inflation, It's like zero point one
10:45
Speaker 2: percent inflation. Like he said, the picture is completely skewed
10:49
Speaker 2: by the housing the way they calculate housing in there.
10:52
Speaker 2: And I think a lot of people agree with him
10:54
Speaker 2: that it's much lower than the FED expects. Are you
10:58
Speaker 2: worried that the FED put pushes us into a recession
11:01
Speaker 2: by hiking too much.
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Speaker 7: I'm not worried that the FED pushes us into recession.
11:07
Speaker 7: I think that it will take a recession, and I
11:12
Speaker 7: don't think the FED, the FED, the ECB everybody is
11:16
Speaker 7: now managing towards growth. So this is what's new here
11:18
Speaker 7: with this inflationary cycle. As we get closer to the
11:21
Speaker 7: to the top, they're more you know, looking on a
11:24
Speaker 7: two sided view, trying to balance the soft landing that
11:27
Speaker 7: everybody's talking about. And you know, I don't want to
11:30
Speaker 7: policy error, as you know, maybe it's too easy of
11:33
Speaker 7: glib of a word to say, because I understand what
11:36
Speaker 7: they're trying to achieve here. But you know, to the
11:41
Speaker 7: extent that spot inflationary numbers are showing a disinflationary trend,
11:46
Speaker 7: I think people really underestimate the self reinforcing elements of inflation,
11:52
Speaker 7: don't I think we have, you know, I mean I
11:54
Speaker 7: don't want to sound like you know all back in
11:56
Speaker 7: my day, but I think that that that you know,
11:59
Speaker 7: the that that the global central bank community, you know,
12:02
Speaker 7: back when they did the new Framework and all that,
12:04
Speaker 7: they said, inflection, will we know how to deal with
12:06
Speaker 7: it when we see it, And you know, they were
12:08
Speaker 7: kind of caught deer in the headlights. They scrambled to
12:11
Speaker 7: catch up. But I think there's still this this this
12:15
Speaker 7: tendency to think that that to to underestimate the forces
12:20
Speaker 7: of inflation pressures once you unleash them. For example, you
12:23
Speaker 7: know the nominal spending. I mean we look in you know,
12:27
Speaker 7: corporate profits, and you look at how you have to
12:30
Speaker 7: think in nominal terms a lot here and you see,
12:33
Speaker 7: you know, the corporate America is doing well. They're still
12:37
Speaker 7: able to pass the price pricing, you know, is being
12:40
Speaker 7: passed through to the consumers. Europe is a little bit
12:44
Speaker 7: different story. We're seeing obviously more slow down in Germany
12:47
Speaker 7: in particular, but uh, they're there. I think there are
12:50
Speaker 7: two things that really stand out to me. One is
12:55
Speaker 7: that the underestimating the self reinforcing elements of inflationary dynamics
13:01
Speaker 7: once it sets in. And the other is that I
13:04
Speaker 7: think people still even today underestimate the power of the
13:09
Speaker 7: fiscal impulse that was put into the system. And economists
13:13
Speaker 7: and you know, the central bankers they don't like to
13:16
Speaker 7: especially the FED, they don't like to talk about fiscal policy,
13:19
Speaker 7: but you know, we still have you know this these it's.
13:21
Speaker 2: Too big to be left out of the station, still
13:24
Speaker 2: feeding through, it's still feeding the Paul. This morning, as
13:27
Speaker 2: I was driving to work, I was on a call.
13:30
Speaker 2: I'm driving right now, I'm driving Alfa Romeo we'll talk
13:33
Speaker 2: about that. But I was on the phone with the
13:35
Speaker 2: CEO of.
13:36
Speaker 1: Masarati apparently not paying tolls either.
13:38
Speaker 2: No, John, what do you drive?
13:43
Speaker 6: Uh?
13:44
Speaker 1: Super a super got everybody off track?
13:48
Speaker 2: Sorry, No, I was just no, No, Uh, Super is
13:52
Speaker 2: a great car. I was talking to CEO of Maserati,
13:54
Speaker 2: David de Grasso, and he said they still have inflation.
13:59
Speaker 2: They still feel it pretty strongly in their input costs, right,
14:03
Speaker 2: and so they're passing that along. To prove your point,
14:06
Speaker 2: the Maserati Gricalai Trofeo, which is a small suv, is
14:10
Speaker 2: going for over one hundred thousand dollars.
14:12
Speaker 1: Yeah, yep, which no problem for Memlania. All right. Soissan,
14:15
Speaker 1: before you were found at sgh Macroadvisors in two thousand
14:18
Speaker 1: and nine, you made your living trading currencies here. So
14:21
Speaker 1: I gotta ask you. I got the dollar down, I
14:23
Speaker 1: don't know, ten percent from its high back in the fall.
14:26
Speaker 5: Here.
14:27
Speaker 1: What you call on the dollar here? Is there a
14:30
Speaker 1: bearish call on the Dollar's just just a little trade down?
14:33
Speaker 7: No, I think there's a bearish call on the dollar.
14:36
Speaker 7: I think, as you know, I mean, it might seem
14:38
Speaker 7: at odds with the notion that we still have inflation
14:41
Speaker 7: we have more room to hike rates, but you know,
14:44
Speaker 7: we have to look at it, you know, and this
14:46
Speaker 7: is always a tricky part with currencies. You know, to
14:48
Speaker 7: have a dollar call is really you got to look
14:50
Speaker 7: at what dollar yen is kind of a different animal than.
14:53
Speaker 2: Almoly goodness what happened yesterday.
14:55
Speaker 7: But yeah, you know, I they pulled it off very nicely.
14:59
Speaker 7: I think, Yeah, the Bank of Japan, you know, they
15:01
Speaker 7: and you know, it's it's people were expecting this to
15:04
Speaker 7: be sort of a huge, you know, explosive event for markets.
15:08
Speaker 2: We had to end still in the same range that
15:11
Speaker 2: it was one forty, right, US treasure you're still under four.
15:14
Speaker 7: Yeah, And importantly, the JJB yields, you know, they they
15:19
Speaker 7: went up to like fifty six basis points and settled
15:21
Speaker 7: in like the mid fifties. So it's not like they
15:24
Speaker 7: lifted a fifty you know, fifty basis point ceiling and
15:27
Speaker 7: it went and it went to one hundred. And you
15:29
Speaker 7: know the reason is, and this is why I think
15:31
Speaker 7: you Eda did a nice job on this is that
15:34
Speaker 7: and we've kind of been flagging this that the tactical
15:37
Speaker 7: window for them to do this what was going to
15:40
Speaker 7: be at a time when there wasn't a lot of
15:42
Speaker 7: bearish pressure on global bond markets, which you know, we
15:46
Speaker 7: look at what's happening in the US and what's happening
15:48
Speaker 7: the ed to be it was a really nice window
15:50
Speaker 7: for them to sort of, uh to walk in and
15:53
Speaker 7: you know and manage it. So Dollar call, you know,
15:56
Speaker 7: I I think, you know, we're close to the end
16:00
Speaker 7: of the cycle. I don't think we're at the end
16:02
Speaker 7: of the cycle. I think we still have a couple
16:04
Speaker 7: more hikes, you know. I think we have at least
16:07
Speaker 7: one more hike left, you know, for for the fad
16:11
Speaker 7: And I sort of think that, you know, looking ahead,
16:13
Speaker 7: the central banks might need to, you know, put another
16:18
Speaker 7: turn on the screw on tightening because.
16:21
Speaker 2: Well Pal said that, he said September, he kind of
16:23
Speaker 2: warned us about September.
16:25
Speaker 7: Right, Yeah, yeah, I mean September. The market is a
16:28
Speaker 7: price to everything out you know, for the US right now.
16:31
Speaker 7: And I think that the issue with September is just
16:33
Speaker 7: that it's going to be hard for them to explain
16:37
Speaker 7: or to even want to, you know, press for a
16:40
Speaker 7: hike when you know, when when the when the inflation
16:44
Speaker 7: numbers are going to are most likely going to come
16:47
Speaker 7: in benign, you know, and markets have been expecting that,
16:50
Speaker 7: and I think there's no reason.
16:51
Speaker 2: But they can prove their point. He can say, listen,
16:53
Speaker 2: I was telling you all year, I want to get
16:55
Speaker 2: to two percent. Three percent is not good enough. Yeah,
16:58
Speaker 2: you know. Yeah.
17:00
Speaker 7: I think that's the broader point is that the both
17:04
Speaker 7: the ECB and the FAD, I think their current stance.
17:07
Speaker 7: I think the you know, putting aside the twenty twenty
17:10
Speaker 7: three numbers, if you look at kind of the twenty
17:12
Speaker 7: twenty four forecast, I think it's a little aspirational the
17:15
Speaker 7: pace at which that they expect that, you know, that inflation,
17:18
Speaker 7: the disinflationary trend is going to continue when that manifests itself.
17:22
Speaker 7: You know, I still think the UCB is going.
17:25
Speaker 2: To hike in September summer.
17:28
Speaker 1: Yeah, fun, I'm done. I'm done. I've taken a recession
17:32
Speaker 1: off the table. I'm done with rate hikes. I got
17:36
Speaker 1: earnings troughing here. I'm set up for a ripping market.
17:39
Speaker 1: That's my call.
17:40
Speaker 7: I'm still one of the problems for traders has been
17:44
Speaker 7: that I think they haven't been able to square the
17:48
Speaker 7: circle with interest rate hikes versus stock market going up.
17:52
Speaker 2: It can still happen.
17:53
Speaker 1: Yeah, all right, Sissan, thank you so much. Sassan Goa Rimani, President,
17:56
Speaker 1: CEO and founder of sg H Macro Advisors. We appreciate
17:59
Speaker 1: you coming here.
18:00
Speaker 6: You're listening to the tape. Can's our live program Bloomberg
18:03
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the
18:07
Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
18:10
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18:13
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18:18
Speaker 1: The Bloomberg Intelligence b I go on yourternal Bloomberg Intelligence
18:22
Speaker 1: is the biggest research department on Wall Street, and more importantly,
18:26
Speaker 1: I believe the best research department on Wall Street. So
18:28
Speaker 1: we have access to all their analysts, including Matt Hendrickson.
18:31
Speaker 1: He's a senior Ecura analyst covering medical technology. He joins
18:35
Speaker 1: us here in our Bloomberg Interactive Broker Studio. And one
18:37
Speaker 1: of the things we like about our BI analysts often
18:39
Speaker 1: bring us companies that we never would have thought about,
18:42
Speaker 1: never would have really you know, think of as an investment.
18:45
Speaker 1: But here's dex Com. D x CM is a symbol.
18:49
Speaker 1: This is a fifty billion dollar market cap. Stock hit
18:52
Speaker 1: fifty two week high today, it's up twenty one percent. Matt.
18:55
Speaker 1: What is Dexcom and what's going on with this stock today?
18:59
Speaker 8: Yeah, SOX makes what they're called cgms. It's that's short
19:03
Speaker 8: for continuous glucose monitors, And basically this technology is replacing
19:08
Speaker 8: what is antiquated, which is fingersticks, which is you have
19:11
Speaker 8: to prick your finger three or four times a day
19:14
Speaker 8: to get your glucose reading.
19:15
Speaker 1: Wasn't there a company that kind of did that a
19:17
Speaker 1: little bit of their nose or something.
19:19
Speaker 4: Oh, that's a that's a different story, but the same thing.
19:24
Speaker 8: Though, prick your finger, get four ings a day, that's antiquated.
19:27
Speaker 8: It hurts, it's a pain in the butt. Yeah, exactly.
19:31
Speaker 8: So cgms come in. It's on your arm or on
19:34
Speaker 8: your abdomen. It does a reading every five minutes, so
19:36
Speaker 8: that's two hundred eight readings the day without pricking your finger.
19:39
Speaker 8: You get the trends, you get the ups the downs.
19:41
Speaker 8: It's predictive, so it says you're going to be up,
19:44
Speaker 8: you're going to be down. That's what Type one diabetes
19:47
Speaker 8: patients need to be able to treat. You know, the
19:50
Speaker 8: highs and the lows.
19:52
Speaker 2: So it's amazing that it's I mean, it's amazing that
19:54
Speaker 2: a fifty four billion dollar company just has one kind
20:00
Speaker 2: of trick. Yeah, I mean that's all they focus on.
20:04
Speaker 8: That's all they focus on. But that's all the trick
20:06
Speaker 8: they need right now, because you have thirty five million
20:10
Speaker 8: diabetic patients in.
20:11
Speaker 2: The US alone and climbing I'm assuming.
20:13
Speaker 8: Climbing, yes, and we'll get into those type two patients
20:15
Speaker 8: a little bit more, but right now they're only focusing
20:17
Speaker 8: on the type ones and those patients that really.
20:20
Speaker 2: What's the difference, by the way, type one type two.
20:23
Speaker 8: Oh so type one is more genetic, and you your
20:25
Speaker 8: pancreas cannot create insulin, so you need to inject yourself
20:29
Speaker 8: with insulin to lower your blood sugar. But you know
20:33
Speaker 8: the problem with taking too much insulin is that your
20:36
Speaker 8: low blood sugar and then you could pass out or
20:38
Speaker 8: even worse. That's why you need the CGM or that's.
20:41
Speaker 2: Why you need's that you inherit that's not yeah, that's all.
20:45
Speaker 2: That's drinking way too much No.
20:47
Speaker 8: No, no, that's uh, that's that's when you get the
20:49
Speaker 8: type two and by drinking so much soda or eating
20:52
Speaker 8: so many candy bars. Your pancreas just cannot produce enough
20:56
Speaker 8: insulin anymore, and it kind of just shuts down because
20:59
Speaker 8: it's overloaded.
21:00
Speaker 2: And that's the I guess the big problem that we're
21:02
Speaker 2: looking at in terms of the climbing numbers.
21:06
Speaker 8: Right, yes, and so when you see like the climbing numbers,
21:09
Speaker 8: it's mostly type two and it's mostly due to these
21:12
Speaker 8: lifestyle decisions.
21:13
Speaker 2: Just eating nerds all day long, yeah.
21:15
Speaker 8: And you know, sitting at your desk all day long.
21:18
Speaker 1: All right, So dex Com this is a way to
21:20
Speaker 1: play that market. And the day of some earnings recently
21:22
Speaker 1: or some.
21:22
Speaker 8: Yeah, so they reported last night and their recent product there,
21:27
Speaker 8: it's the seventh generation so obviously called G seven that
21:32
Speaker 8: launched earlier this year, and that's helped boost revenue. So
21:35
Speaker 8: they beat in the quarter and then they raised their guidance.
21:38
Speaker 8: So now they're up to three and a half billion
21:39
Speaker 8: to three point five to five billion. That's twenty to
21:43
Speaker 8: twenty two percent growth on a three billion dollar revenue
21:46
Speaker 8: run rate. So the market like that, and so we've
21:50
Speaker 8: seen the kind of the rally today.
21:52
Speaker 5: All right.
21:52
Speaker 1: So in the world of kind of medical equipment, what
21:56
Speaker 1: are some of the hotters. What are the areas that
21:57
Speaker 1: that kind of get your attention?
21:59
Speaker 8: Yeah, I mean, and so the big themes in medtech
22:02
Speaker 8: right now is is diabetes is one and robotics is
22:06
Speaker 8: another one. The main company participating in robotics is Intuitive Surgical.
22:11
Speaker 1: Is Surgical I SRG.
22:14
Speaker 8: Okay, and so you're talking about a fifty billion dollar company,
22:17
Speaker 8: this is one hundred billion dollar market cap.
22:18
Speaker 1: You just don't know these companies. Where have I been?
22:21
Speaker 6: All right?
22:22
Speaker 1: What did they do?
22:22
Speaker 8: So they are creating robotics systems that help with various surgeries.
22:28
Speaker 8: It can be anything from general surgery, so hernia repair,
22:32
Speaker 8: bariatric surgery.
22:33
Speaker 1: Robot is doing this.
22:34
Speaker 8: Yeah, well, I mean it's so this is where you
22:36
Speaker 8: get your kids to start playing video games.
22:38
Speaker 1: Okay.
22:39
Speaker 8: It's controlled by a video game or what looks like
22:42
Speaker 8: a video game controller.
22:43
Speaker 1: Okay.
22:43
Speaker 2: So the surgeon uses a joystick essentially to do things
22:46
Speaker 2: in extremely precise way exactly.
22:49
Speaker 8: And but basically, you know, even you know, when you
22:51
Speaker 8: talk think about a surgeon, what do they have? They
22:53
Speaker 8: have a very steady hand. But even the steadiest hand,
22:56
Speaker 8: by the steady.
22:56
Speaker 1: Yeah, you know, I would not want to it's John Tucker.
22:59
Speaker 2: Yeah, Paul's hands are too shaky. I knew a surgeon
23:02
Speaker 2: in London he had to knock back basically a bottle
23:04
Speaker 2: of Scotch before he could do any kind of operation.
23:07
Speaker 1: That's not good. Yeah, and this is the guy you
23:09
Speaker 1: went to.
23:09
Speaker 2: Yes, it's a friend of mine.
23:11
Speaker 8: Well, yeah, that's why you should never mix friends and work.
23:15
Speaker 2: Right, So, so intuitive surgical. I wonder if there's any
23:20
Speaker 2: AI involved. I've noticed we've all noticed, I think lately,
23:24
Speaker 2: that every company seems to be using artificial intelligence. Are
23:28
Speaker 2: you seeing that in any of the companies that you.
23:30
Speaker 8: Cover, Yeah, there's it's AI, and it's for medtech. It's
23:35
Speaker 8: specifically machine learning. So you're learning from the past procedures,
23:40
Speaker 8: whether it's surgery, whether it's knee replacements, and you're learning
23:45
Speaker 8: to see what went right, what went wrong. You're learning
23:47
Speaker 8: with these patients how the recovery is, and then you're
23:49
Speaker 8: trying to use those and you're trying to show the doctor, hey,
23:52
Speaker 8: why don't we try this method next time? And so
23:55
Speaker 8: it's kind of you're building this big data machine learning
23:57
Speaker 8: aspect to try to really streamline and kind of make
24:00
Speaker 8: the surgery just more efficient.
24:03
Speaker 1: All right, the two companies are three companies you've given
24:05
Speaker 1: us so far, they're all up twenty thirty percent this year.
24:07
Speaker 1: So in a medical technol and medical equipment business, this
24:10
Speaker 1: is just a play that post pandemic, we're now going
24:13
Speaker 1: back and getting procedures done. So your companies are doing well.
24:16
Speaker 8: Yeah, I mean that's pretty much. Yeah, you're just answering
24:18
Speaker 8: for me. Yeah, I can do his job.
24:20
Speaker 1: I go want into Fidelity tomorrow and say buy these
24:22
Speaker 1: stocks because.
24:24
Speaker 8: Yeah, but you know what, the thing though, is that
24:26
Speaker 8: because of the rally of this year so far, this earnings,
24:30
Speaker 8: you've had to be have had a perfect report or
24:32
Speaker 8: else the market's going to kick back. And you know,
24:35
Speaker 8: Intertutive Surgical, for example, they beat estimates, they raised guidance,
24:41
Speaker 8: but in their call they made one comment that there
24:45
Speaker 8: is slower growth in bariatric surgery, which is just a
24:47
Speaker 8: small portion of the total surgeries, and the reason was
24:50
Speaker 8: that patients are trying ozeenpic and other weight loss drugs
24:54
Speaker 8: before going to weight loss surgery, and so that big competition,
25:00
Speaker 8: a big competition there.
25:02
Speaker 2: Yeah, why go under the knife if you can just
25:04
Speaker 2: give yourself a shot in the arm or wherever they
25:06
Speaker 2: get it and and lose weight. That way.
25:09
Speaker 1: All right, are you gonna you're gonna come back and
25:10
Speaker 1: talk to U about zempek at zempic or whatever it is.
25:12
Speaker 1: I don't, I can't. Image.
25:13
Speaker 2: Got to get me a prescription.
25:14
Speaker 1: Man, You got a money buddy. All right, Matt, thanks
25:17
Speaker 1: so much for joining us. Matt Hendrickson, he's a senior
25:19
Speaker 1: equity analyst covering the medtech space for Bloomberg Intelligence and again,
25:23
Speaker 1: terminal users can find all the research at b I Go.
25:28
Speaker 6: You're listening to the team. Ken's are Live program Bloomberg
25:32
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot com,
25:35
Speaker 6: the iHeartRadio app, and the Bloomberg Business App, or listen
25:38
Speaker 6: on demand wherever you get your podcasts.
25:41
Speaker 1: All right, let's talk space. Let's talk investing in space.
25:46
Speaker 1: Justice Palmer joins this year. He's the CEO and founder
25:48
Speaker 1: for Tuna Investments. He joins us here in our Bloomberg
25:51
Speaker 1: Interactive Broker studio. He is streaming on YouTube. Justice talk
25:55
Speaker 1: to us about Fortuna, what do you guys do, And
25:57
Speaker 1: talk to us about kind of your investments in space.
26:00
Speaker 9: Absolutely so. We're an award winning venture capital firm. We've
26:04
Speaker 9: had a tremendous track record in other industries. We famously
26:08
Speaker 9: made a name for ourselves back in twenty sixteen, twenty seventeen.
26:11
Speaker 9: That was back when Elon and Tesla were just beginning
26:13
Speaker 9: to take off. It wasn't the star. Tesla was not
26:17
Speaker 9: the star then that it is now. Just to give
26:20
Speaker 9: you context, Elon was selling like sixty thousand cars a year.
26:23
Speaker 9: He's selling two million cars a year now.
26:25
Speaker 1: And you guys invested in So we didn't.
26:28
Speaker 9: We stayed away from Tesla. But what we did was
26:30
Speaker 9: we realized it was the lithium ion batteries that were
26:32
Speaker 9: fueling this electrification. And so what we did is we
26:35
Speaker 9: founded and we co founded a couple companies in that industry.
26:38
Speaker 9: One went to a billion dollars on NASDAC and the
26:40
Speaker 9: other one was sold last year for four hundred and
26:42
Speaker 9: sixty million dollars. So we've had a tremendous track record
26:45
Speaker 9: in other industries. Now we've turned our attention to this
26:48
Speaker 9: new space economy. We believe this to be a once
26:50
Speaker 9: in a lifetime opportunity and we're so happy to be
26:52
Speaker 9: on the front line.
26:53
Speaker 2: And so Starfighters Space is the first investment that you're making.
26:58
Speaker 2: Tell us about this company is not everyone's heard of it.
27:01
Speaker 9: Yeah, So it's a private company. They're they're located at
27:04
Speaker 9: the John F. Kennedy Space Center at NASA, right beside
27:07
Speaker 9: Jeff and Elon. And so what Elon and obviously SpaceX
27:12
Speaker 9: gets a lot of headlines. And so the secret sauce
27:14
Speaker 9: what Elon's doing is he's got this Falcon nine rocket cranking.
27:18
Speaker 9: He's he's taking it up every single week, and he's
27:20
Speaker 9: focusing on the heavy payload, big satellites, heavy payload. That's
27:23
Speaker 9: what he's got going on. And so for us at Fortuna,
27:25
Speaker 9: we realize there's a void in the market because the
27:27
Speaker 9: small satellites are actually being neglected in a certain way
27:30
Speaker 9: and technology is actually getting smaller and smaller and smaller.
27:33
Speaker 9: So we've made a fifty million dollar commitment to Starfighters
27:36
Speaker 9: to help grow this beautiful space ecosystem that's that's starting
27:39
Speaker 9: to emerge.
27:39
Speaker 2: So small satellites, they're like shoebox size satellites right that
27:43
Speaker 2: are getting launched in the dozens with these kind of
27:49
Speaker 2: you have a f one to zero four supersonic aircraft,
27:52
Speaker 2: How did they how do they launch those? They just
27:54
Speaker 2: fly up to the top and kick them out or
27:57
Speaker 2: what is their paid delivery, you know your stuff.
28:00
Speaker 1: It's amazing.
28:00
Speaker 9: So yeah, so the short answers, Yes, technologies getting smaller
28:03
Speaker 9: and smaller, and so they could be anywhere from like
28:05
Speaker 9: a pizza box all the way to even the size
28:07
Speaker 9: of your iPhone. And they're called small SATs nanosats. And
28:10
Speaker 9: so Starfighters with our funding is actually going to get
28:12
Speaker 9: their launch license. So they expect to have their launch
28:15
Speaker 9: license in the next eight to twelve months. And as
28:17
Speaker 9: soon as we get that launch license, as Paul said,
28:19
Speaker 9: we already have the nine F one oh four fighter
28:21
Speaker 9: jets that fly mock two speeds tremendously fast. Obviously, and
28:26
Speaker 9: if you think about the nine fighter jets that we have,
28:28
Speaker 9: that's bigger than I don't know Switzerland's you know air force,
28:31
Speaker 9: are certain countries air force. Right, So we've got this
28:34
Speaker 9: as a private company, one hundred percent own, no debt,
28:37
Speaker 9: and we look really forward to taking this next step
28:39
Speaker 9: in terms of the launch game.
28:41
Speaker 1: How do retail investors play, you know, investing in space.
28:45
Speaker 9: Sure, and so it's a bit of a loaded question,
28:47
Speaker 9: but here's what I'll say. I believe that the mark
28:52
Speaker 9: So we've come off the worst market crash in the
28:53
Speaker 9: last twenty years, since two thousand and eight, almost twenty years,
28:57
Speaker 9: and so a lot of the stocks have been extremely
29:01
Speaker 9: depressed in that industry, in all industries, albeit obviously there's
29:04
Speaker 9: been an uptick in the last couple of months or so.
29:07
Speaker 9: But we have fortuna believe that the markets to perform
29:09
Speaker 9: extremely well over the next couple of years. Reason being
29:13
Speaker 9: is there's trillions of dollars of cash on the sidelines.
29:15
Speaker 9: We've we've seen peak interest rates. We also realize that
29:22
Speaker 9: there's gonna be a many activity galore, and there's a
29:25
Speaker 9: lot and it's a US presidential here coming up, so
29:26
Speaker 9: there's a lot of really interesting catalysts coming up for
29:29
Speaker 9: the equity markets. We think the market's going to perform well.
29:32
Speaker 9: And within their space has been a depressed category that
29:35
Speaker 9: we think is going to perform very well of the
29:36
Speaker 9: next couple of years.
29:38
Speaker 2: So what I was gonna ask, what else is there
29:42
Speaker 2: besides launching satellites. We hear so much about space mining,
29:47
Speaker 2: but I don't think anyone's ever really achieved that, and
29:50
Speaker 2: it seems like it must be a decade away. So
29:53
Speaker 2: what else?
29:54
Speaker 5: I mean?
29:54
Speaker 2: I know Elon Musk wants to go to Mars and
29:56
Speaker 2: put a colony there. What are we talking about?
29:59
Speaker 9: Yeah, so we at Fortuna. So we're blasted. We've got
30:01
Speaker 9: you know, almost thirty individuals, thirty folks on our team.
30:04
Speaker 9: You know, these are research analysts, these are investment bankers.
30:07
Speaker 9: CCFA is all sorts of brilliant people. So we actually
30:09
Speaker 9: get pitched three, four, up to five times a day
30:12
Speaker 9: from various space companies looking for investment. So to answer
30:15
Speaker 9: your question, Matt, we see it all or not all,
30:17
Speaker 9: but we see a lot of really really interesting things
30:19
Speaker 9: coming through our desks. And so I agree with you.
30:22
Speaker 9: I think that the space mining is still maybe eight
30:25
Speaker 9: to twelve years out potentially, but there are interesting applications
30:29
Speaker 9: such as, for example, solar solar energy. We have for
30:32
Speaker 9: tune our big and solar energy. We've got solar energy
30:34
Speaker 9: investments here in the US. But just conceivably, if you
30:37
Speaker 9: think about it, the Sun that we get on planet
30:40
Speaker 9: Earth here, it's actually diluted, It's diluted by the Earth's atmosphere,
30:44
Speaker 9: and we got a very deluded version of the Sun.
30:46
Speaker 9: And so if, if, and when we're able to have
30:48
Speaker 9: satellites with solar in outer space, you think about that
30:53
Speaker 9: it's gonna be ten times, ten thousand times more powerful.
30:56
Speaker 9: Clean sun and things like this are going to be
30:59
Speaker 9: the few of this beautiful industries that's just starting to
31:02
Speaker 9: come together.
31:03
Speaker 2: The scoard would be so long, you know, yeah, exactly.
31:06
Speaker 1: So, I mean, kind of what's the VC world like
31:11
Speaker 1: today in terms of raising capital deploying capital. We've got
31:13
Speaker 1: higher interest rates. The world's really changed from that free
31:16
Speaker 1: money of just you know a couple of years ago.
31:19
Speaker 1: How has it kind of impacted your business?
31:21
Speaker 9: Yeah, so that's just it. The growth stuff has been
31:24
Speaker 9: really really hurt. Vcs are very shy to put money out,
31:27
Speaker 9: although that might have changed in the last thirty days
31:29
Speaker 9: with this AI push. Aside from the AI, it's been
31:32
Speaker 9: a really really tight industry. A lot of guys are
31:34
Speaker 9: licking their chops because they've financed companies at extremely high valuations,
31:38
Speaker 9: many of which will probably never be seen before.
31:40
Speaker 2: So it's really tricky.
31:41
Speaker 9: But for us at Fortuna, we monitored the space industry.
31:44
Speaker 9: We actually thought it was a little bit two point
31:46
Speaker 9: over the last couple of years with the spack craze
31:47
Speaker 9: and some of these things are going on. We did
31:49
Speaker 9: our homework and we're actually using this as a perfect
31:51
Speaker 9: entry point in our opinion, where technology has been the
31:54
Speaker 9: furthest it's ever been, and valuations have actually been the cheapest.
31:57
Speaker 9: We played a long game, We played five year, ten
31:59
Speaker 9: year cycles, and so for that reason alone, it's a
32:02
Speaker 9: tremendously exciting opportunity.
32:04
Speaker 2: Did you see the congressional hearing the other day on UFOs.
32:09
Speaker 1: Yeah, they're working on that.
32:10
Speaker 2: So apparently we have some alien wreckage. It's top secret,
32:15
Speaker 2: totally classified.
32:17
Speaker 1: So why are you saying it? You're just out the whole.
32:20
Speaker 2: I mean, that was that was the big thing about this, uh,
32:24
Speaker 2: this congressional panel. If we could just if we could
32:29
Speaker 2: just get some of that technology, imagine how much you could,
32:33
Speaker 2: you know, supersize the space investment.
32:36
Speaker 1: Yep. So I mean all right, so just moving.
32:40
Speaker 2: I mean you know what I was thought. I thought
32:41
Speaker 2: of it because you asked how does a retail investor
32:44
Speaker 2: get in in space? And my immediate reaction is to
32:47
Speaker 2: type in ETF go on the Bloomberg terminal. So I
32:50
Speaker 2: do that, and I put space in the description, and
32:53
Speaker 2: then I get rc X is an ETF you.
32:55
Speaker 6: Could use it?
32:55
Speaker 9: And so Athy Wood UFO IF is another one rocket
32:59
Speaker 9: r O K T it is hitting fifty two week highs.
33:01
Speaker 9: Take a look at Rocket. It's a really nice basket.
33:04
Speaker 9: The stock looks from the bottom left to the top
33:06
Speaker 9: right General Electric for example. That's a great way, in
33:09
Speaker 9: my humble opinion, to play it.
33:10
Speaker 6: Obviously, talk to.
33:11
Speaker 9: Your own financial advisors, not financial advice, but you know,
33:13
Speaker 9: ge was a global congomerate. They're getting rid of everything,
33:16
Speaker 9: including healthcare, and they're only focusing on aerospace and avionics.
33:20
Speaker 9: And if you take a look at that chart, it's
33:21
Speaker 9: been one of the best performing stocks out there. And
33:24
Speaker 9: so that's another, you know, low access, easy way to
33:27
Speaker 9: start to you know, look at these things. Because the
33:29
Speaker 9: reality is all the listeners at home and some of
33:31
Speaker 9: the folks they don't have the chance to necessarily buy
33:33
Speaker 9: the SpaceX is or the Relativities or the Fireflies or
33:37
Speaker 9: some of these private companies that the VC world are currently.
33:39
Speaker 2: Can you buy SpaceX on the secondary market?
33:42
Speaker 9: Yeah, we ironically, we had an opportunity to buy it
33:44
Speaker 9: back in twenty fifteen at a fifteen billion dollar valuation.
33:47
Speaker 9: Obviously we did not do that. Why would we still
33:50
Speaker 9: kind of kicking ourselves, but yeah, we do get offered
33:53
Speaker 9: the SpaceX rounds of financing absolutely, But what we try
33:55
Speaker 9: and look for we try and find the SpaceX is
33:57
Speaker 9: before they turn into the SpaceX, So we're not necessarily
33:59
Speaker 9: looking for a fifty billion dollar company. We're looking for
34:02
Speaker 9: an earlier stage.
34:03
Speaker 1: Is private space industry? Is it primarily a US industry?
34:07
Speaker 1: Are there other countries doing it as well?
34:08
Speaker 7: Though?
34:08
Speaker 9: It is a global industry. It's a five hundred and
34:11
Speaker 9: forty billion dollar global industry. Of that, the US base
34:14
Speaker 9: US is over two hundred billion, so it's almost half
34:17
Speaker 9: of the global output. We Fortuna believe it's going to
34:20
Speaker 9: a trillion dollar industry this decade. It's going to be
34:22
Speaker 9: the fastest growing industry next to potentially AI coming up here,
34:26
Speaker 9: which is one of the reasons we're so excited about
34:28
Speaker 9: this industry.
34:29
Speaker 2: A lot of those launches go out of French.
34:30
Speaker 1: Guyana yep right, yep, yeap went down there once back
34:33
Speaker 1: in the day for one of the when the satellite
34:37
Speaker 1: industry is just kind of kicking off. It's a good trip. Actually,
34:40
Speaker 1: just as palm Our, CEO and founder Fortuna Investments, joining
34:44
Speaker 1: us here in our Bloomberg Interactive broken student's talking about space.
34:47
Speaker 1: Investing in space as a venture capitalist lots of opportunities.
34:50
Speaker 1: There SMP five hundred. There's opportunities right there. It's up
34:53
Speaker 1: over one percent today. The Nasdaq is up one point
34:57
Speaker 1: nine percent, So there you go. The market's definitely liking
35:00
Speaker 1: what they heard from the earning side and liking what
35:02
Speaker 1: they heard from some of these central bankers, reflecting that
35:05
Speaker 1: in the marketplace.
35:06
Speaker 6: You're listening to the tape catchur live program Bloomberg Markets
35:10
Speaker 6: weekdays at ten am Eastern on Bloomberg Radio, the tune
35:14
Speaker 6: in app, Bloomberg dot Com, and the Bloomberg Business app.
35:17
Speaker 6: You can also listen live on Amazon Alexa from our
35:19
Speaker 6: flagship New York station. Just say Alexa play Bloomberg eleven thirty.
35:25
Speaker 1: Let's bring that conversation. Intel C Pat Gelsinger. He joins
35:29
Speaker 1: Edla alone Caroline Height on Bloomberg Technology today after reporting earnings.
35:33
Speaker 1: Let's go to that conversation right now.
35:35
Speaker 10: I wants to welcome our global Bloomberg TV and radio audiences.
35:39
Speaker 10: Intel shares are jumping, with investors buying into signs that
35:43
Speaker 10: the chip maker's long awaited comeback is underway. Inteler's forecasting
35:48
Speaker 10: sales in the current quarter of thirteen point nine billion
35:51
Speaker 10: dollars ahead of expectations.
35:53
Speaker 1: The company also notched.
35:55
Speaker 10: A surprise profit of thirteen cents a share in the
35:58
Speaker 10: quarter just gone as a slump him demand for personal
36:01
Speaker 10: computers appears to be come into an end. It's not
36:05
Speaker 10: all good news. Server demand isn't recovering as quickly. The
36:08
Speaker 10: company is still a little bit far from its heyday
36:11
Speaker 10: where margins where at sixty percent sales were nearer to
36:14
Speaker 10: twenty billion dollars. Even so, joining us now Intel's CEO
36:19
Speaker 10: Pat Gelsinger. You know, Pat, this is the second consecutive
36:23
Speaker 10: quarter where investors have cheered the earnings results shares her
36:29
Speaker 10: up and I think before twenty twenty three, ten out
36:32
Speaker 10: of the eleven earnings prints that you had shares fell.
36:36
Speaker 2: Is this job done for you?
36:37
Speaker 10: In the turnaround at Intel?
36:40
Speaker 5: Well ed?
36:40
Speaker 11: We have a long way to go yet, but boy,
36:43
Speaker 11: having two good Beaten Ray quarters in a row, you know,
36:47
Speaker 11: is a super positive and really I think in THEKPI
36:51
Speaker 11: of that turning point for the company. But we still
36:55
Speaker 11: have a lot of work to do yet. You know,
36:56
Speaker 11: as we said, our client business is now healthy foot.
37:00
Speaker 11: You know, we've returned market shared to where it traditionally
37:03
Speaker 11: was a strong roadmap.
37:04
Speaker 5: You know, the markets recovering. Inventory levels are.
37:07
Speaker 11: Good, you know, Data Center, we still have work to do,
37:09
Speaker 11: but boy, you know two quarters in a row where
37:11
Speaker 11: we did a bit better than we expected, you know,
37:14
Speaker 11: but we still have challenges in AI, you know, and
37:16
Speaker 11: many of our really good products are only coming to
37:19
Speaker 11: market over the next year.
37:21
Speaker 5: You know.
37:22
Speaker 11: Networking is still a lot of inventory to work through,
37:24
Speaker 11: and our foundry business is still just a seedling, just
37:27
Speaker 11: starting to show some green shoots. So I'll say, boy,
37:30
Speaker 11: far from finished, but it is nice bouncing off the
37:33
Speaker 11: bottom a bit and feeling that momentum in the market.
37:35
Speaker 10: Response, Pat, why do you have the confidence to kind
37:39
Speaker 10: of cool the end of the PC slump and also
37:43
Speaker 10: at the same time state that the server recovery is
37:46
Speaker 10: delayed to the end of the year.
37:49
Speaker 11: Yeah, and the PC side, you know, inventory levels are
37:52
Speaker 11: now healthy, right, you know, everything that we've seen and
37:54
Speaker 11: a lot of the issues that we work through Q four,
37:58
Speaker 11: Q one and Q two were over inventory levels by
38:01
Speaker 11: the OEMs and the channel, and now everything is healthy.
38:05
Speaker 11: Our roadmap is very good. We've gained share multiple times
38:09
Speaker 11: in a row. I think we're now at five out
38:11
Speaker 11: of six quarters where we've gained market share so I
38:14
Speaker 11: just say in the PC business healthy, Our position is good,
38:18
Speaker 11: and we're looking forward to the AI PC and with
38:22
Speaker 11: our launch of our next generation product, meteor Lake later
38:25
Speaker 11: this year. You know, we believe that ushers in the
38:28
Speaker 11: AI PC generation and I've compared that to like Centrino
38:32
Speaker 11: and Wi Fi, you know, two decades ago, a major
38:36
Speaker 11: new use case for why the PC is the best platform.
38:39
Speaker 5: So we're quite excited about that.
38:41
Speaker 11: On the data center side, you know, we still saw that,
38:44
Speaker 11: you know, the inventory levels still persist. You know, China
38:47
Speaker 11: was weaker than expected. Their recovery is going slower. And
38:51
Speaker 11: you know, cyclically we see the shift toward AI you know,
38:54
Speaker 11: these big training machines. Every cloud vendor is shifting their
38:57
Speaker 11: dollars to more focus on that. So those three things
39:00
Speaker 11: are leading to a bit longer recovery cycle on the
39:04
Speaker 11: data center. Well, like I said, we performed a bit
39:06
Speaker 11: better than we thought on the data center in Q
39:08
Speaker 11: one m Q two, So we're feeling like our momentum
39:12
Speaker 11: and execution is rebuilding despite some of those headwinds that
39:15
Speaker 11: still persist in that area.
39:17
Speaker 10: For our global TV and radio audience here at Bloomberg,
39:20
Speaker 10: we're speaking to Pat Gelsinger, the Intel CEO. Pat you're
39:24
Speaker 10: forecasting gross margin of forty three percent in the current period,
39:29
Speaker 10: but it's a long way from that sixty percent gross
39:32
Speaker 10: margin level. You know, Wall Street used to look at
39:34
Speaker 10: Intel and say sixty percent. You know, they cheer you
39:38
Speaker 10: as a leader in that space. Can you just explain
39:41
Speaker 10: to our global audience the timeline and path to getting
39:45
Speaker 10: back to profit at that level.
39:48
Speaker 11: Yeah, and we're working our way back in margins and
39:50
Speaker 11: obviously a nice beat in Q two on margins, and
39:53
Speaker 11: we forecast Q three a bit better and Q four
39:56
Speaker 11: a bit better, you know. And part of it is
39:58
Speaker 11: the cyclicality. The semiconductor industry is brutal on margins. And
40:03
Speaker 11: when we had an oversupply situation inventory, you know, that
40:08
Speaker 11: just depresses margins because you know, the factories cost the
40:12
Speaker 11: same whether they're full or whether they're empty, so you
40:15
Speaker 11: end up with these charges that you burden the price
40:18
Speaker 11: points and depressed margins. We also realize that our own
40:23
Speaker 11: product execution has weakened our product position, which doesn't have
40:27
Speaker 11: asps as strong as well, So that's another factor. And
40:30
Speaker 11: the last factor here is, you know, the plan that
40:34
Speaker 11: my CFO Dave and I have laid out is an
40:37
Speaker 11: expensive plan. We are making aggressive investments to build the
40:41
Speaker 11: capacity to get back to leadership, and thus we're moving
40:44
Speaker 11: through nodes very rapidly. We said five nodes in four years,
40:48
Speaker 11: So that causes us to have a lot of undepreciated
40:51
Speaker 11: capacity that we're working through quite aggressively. Also building up
40:55
Speaker 11: a bit more capacity for our foundry initiatives. So all
40:59
Speaker 11: of those factors depressed margins to historically low levels in
41:03
Speaker 11: the first part of the year and we're just seeing
41:05
Speaker 11: ourselves now working to build back to margin levels. But
41:08
Speaker 11: we're still very confident that as we build our foundry
41:12
Speaker 11: business get back to leadership and process and products. You
41:16
Speaker 11: know that those kind of margins, that's exactly what Dave
41:18
Speaker 11: and I aspire to to the future. And we feel
41:21
Speaker 11: like you two was a good marker you know that, Yes,
41:24
Speaker 11: we're building momentum to get back there.
41:26
Speaker 10: Thank you for joining us here on Bloomberg Television and
41:30
Speaker 10: Radio worldwide. We're joined by Pat Gelsinger, Intel CEO. You
41:35
Speaker 10: described the foundry business as a seedling, but every time
41:39
Speaker 10: you and I have spoken, you've hinted that there is
41:42
Speaker 10: a big customer waiting in the wings to give life
41:48
Speaker 10: to that business. What can you tell us about that, Pat.
41:52
Speaker 11: Yeah, and we're having good momentum, and as I said
41:55
Speaker 11: on the Ernie's call yesterday, we have two big customers
41:58
Speaker 11: in particular that we made very good progress over the
42:01
Speaker 11: last quarter for our foundry business. We did have one,
42:05
Speaker 11: i'll say confirmatory, not as big a customer, but the
42:08
Speaker 11: Ericsson announcement their commitment to eighteen A and our next
42:12
Speaker 11: generation work.
42:13
Speaker 5: You know with them that we announced this quarter.
42:15
Speaker 11: So I'll say overall, we're seeing good momentum and a
42:18
Speaker 11: really strong pipeline of customers, and we hope to make
42:22
Speaker 11: meaningful announcements later this year on that. We also pointed
42:26
Speaker 11: out on our earnings call that now we're seeing a
42:28
Speaker 11: lot of interest in our packaging technologies. So it isn't
42:31
Speaker 11: just wayfer manufacturing, it's also package assembly and tests. And
42:35
Speaker 11: Intel has long term been a leader in packaging technologies,
42:41
Speaker 11: and because of key areas like high performance computing and AI,
42:45
Speaker 11: there's tremendous interest in these advanced packaging technologies and we're
42:49
Speaker 11: finding a lot of customer interest in that incremental area
42:53
Speaker 11: of the foundry business as well. So overall, you know,
42:56
Speaker 11: and the numbers were good for us in Q two
42:58
Speaker 11: for foundry, great pipeline of activities, Great progress on a
43:01
Speaker 11: couple of these most major opportunities. So I'm feeling good
43:05
Speaker 11: like we're starting to really see that momentum build in
43:08
Speaker 11: this new business area for Intel or Intel Foundery services.
43:12
Speaker 10: If we think about what a potential customer might be,
43:16
Speaker 10: you know, at the scale of Apple, Google, or Video,
43:19
Speaker 10: what is it that they want from you? What is
43:22
Speaker 10: it do you think that you can provide them?
43:25
Speaker 5: Yeah? You know when I view it, you know, we
43:27
Speaker 5: have to go through four stages.
43:29
Speaker 7: You know.
43:29
Speaker 5: One is are my transistors good? You know?
43:32
Speaker 11: Can they build good products using Intel? Second is do
43:36
Speaker 11: I have the design tools? You know, the cadences and synopsis,
43:41
Speaker 11: c das and the IP libraries. Have we gotten all
43:44
Speaker 11: of those basics done so that they can design on us?
43:47
Speaker 7: You know?
43:47
Speaker 11: Then third, you know, do we have good terms and conditions?
43:50
Speaker 11: Are they better off coming to me versus you know,
43:53
Speaker 11: TSMC or Samsung as an alternative?
43:56
Speaker 5: And then finally are we customer oriented?
43:59
Speaker 11: Can they really have the support because my factory becomes
44:02
Speaker 11: their factory, you know, So we have to work through
44:04
Speaker 11: all four of those stages before they're ready to commit
44:08
Speaker 11: major businesses to us, and that's why it takes a while.
44:11
Speaker 11: You know, they got to do designs and tests and
44:13
Speaker 11: pilots and you know, work through the financials, and you know,
44:17
Speaker 11: this isn't a mature business area for US. But I'll
44:19
Speaker 11: just say we're making great progress, and in particular, you know,
44:22
Speaker 11: the two most significant opportunities. It was a really good
44:25
Speaker 11: quarter and I'm feeling very optimistic that yes, we'll bring
44:28
Speaker 11: them across the line and start to really accomplish what
44:31
Speaker 11: we've laid out, you know, with our reshoring and building
44:35
Speaker 11: the Western founder.
44:36
Speaker 5: And we also had great.
44:38
Speaker 11: Success with both the EU and the US chipsack this
44:41
Speaker 11: last quarter, which are affirming the strong support you know,
44:45
Speaker 11: of the Western governments on this strategy.
44:47
Speaker 5: It's the right strategy at the right time. We're making
44:50
Speaker 5: good progress.
44:51
Speaker 10: A big part of your smart capital approach, we have
44:53
Speaker 10: to talk about AI. You see a world in which
44:56
Speaker 10: the PC plays a role for localized running of l ends.
45:00
Speaker 10: But what are the use cases that you see pat
45:03
Speaker 10: the applications where PC with AI specific chips is relevant.
45:09
Speaker 11: Yeah, you know, to some degree, they're numerous. Ed you know,
45:13
Speaker 11: let's just give one example. You know in the future,
45:15
Speaker 11: my word processor, you know, I'm going to hit a
45:17
Speaker 11: button and say, give me a legal brief that describes this,
45:20
Speaker 11: and it's going to get locally generated, you know, my
45:23
Speaker 11: video conferencing, my zine, my teams or zooms. I'm going
45:26
Speaker 11: to say, you know, give me, you know, real time
45:29
Speaker 11: translation across multiple languages, you know, for this meeting, and
45:33
Speaker 11: I'm going to have that in real time on my PC.
45:36
Speaker 11: You know, my games, you know, for my you know,
45:38
Speaker 11: all of that is going to become synthetically generated worlds
45:42
Speaker 11: locally on my PC in real time. So we see
45:45
Speaker 11: it across creator, across productivity, you know. And as I've said,
45:49
Speaker 11: this is sort of like a Wi Fi moment, you know,
45:51
Speaker 11: for the PC of the future. And that begins with
45:54
Speaker 11: our meteor like launch in the second half of this year.
45:59
Speaker 10: Pat quickly a one billion dollar pipeline for AI products
46:02
Speaker 10: through twenty twenty four. Just give me a sense of
46:05
Speaker 10: the pace at which that pipeline is growing.
46:08
Speaker 11: Now, Yeah, we had a super exciting quarter. As I said,
46:13
Speaker 11: we six xt that pipeline in Q two, so we
46:16
Speaker 11: saw a huge uptick on that, you know, and I've
46:19
Speaker 11: deployed a lot more sales resources, software resources, you know,
46:23
Speaker 11: to jump on those opportunities worldwide. You know, when we
46:26
Speaker 11: have our Gouty two chip that is now in volume.
46:30
Speaker 11: You know, we've just seen the first wafers on the
46:32
Speaker 11: next generation Gouty three, which will be our twenty twenty
46:35
Speaker 11: four product, and then we have our twenty five and
46:38
Speaker 11: twenty six products underway. So you know, we're seeing a
46:40
Speaker 11: lot of momentum there and the world is looking for
46:43
Speaker 11: a great alternative, an open alternative, a more cost effective alternative,
46:48
Speaker 11: and Intel is a trusted supplier. We think this is
46:51
Speaker 11: a great area for us to put a lot of
46:54
Speaker 11: energy into and we're seeing the response from the marketplace now.
46:58
Speaker 10: Intel CEO Pat Gelis, you know, we appreciate your time
47:01
Speaker 10: here on Bloomberg TV and Radio. Thank you.
47:03
Speaker 6: You're listening to the tape. Catch our live program Bloomberg
47:07
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the
47:10
Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business app.
47:14
Speaker 6: You can also listen live on Amazon Alexa from our
47:16
Speaker 6: flagship New York station. Just say Alexa play Bloomberg eleven thirty.
47:22
Speaker 2: I want to get to cars right now.
47:24
Speaker 1: Oh there, we go.
47:25
Speaker 2: I'm so happy to be back on this program and
47:28
Speaker 2: talk about the car industry. I've been covering it for
47:31
Speaker 2: twenty years now and as a result, as you know,
47:33
Speaker 2: manufacturers often give me vehicles to test out. It's the
47:37
Speaker 2: best part of the job. This week, I am driving
47:39
Speaker 2: the Alfa Romeo Tanali, which is a subcompact suv. It's
47:44
Speaker 2: a very crowded segment, but this one is electrified. It's
47:48
Speaker 2: got a hybrid drive train. It has a very tiny
47:51
Speaker 2: gas motor one point three leader four cylinder motor driving
47:55
Speaker 2: the front wheels, electric motor driving the back, and it
47:57
Speaker 2: can do more than thirty miles of rain on the
48:00
Speaker 2: battery by itself, so it's a very interesting vehicle. Also
48:03
Speaker 2: joining us to talk about Alfa Romeo stilantis As, which
48:08
Speaker 2: is the owner as well as the broader car industry,
48:10
Speaker 2: is one of the few people who has driven more
48:11
Speaker 2: cars than me. Bloomberg Pursuits. Hannah Elliott joins us from
48:15
Speaker 2: Los Angeles and I'm really glad hen I've been chasing
48:17
Speaker 2: after you for weeks to get you on the show.
48:20
Speaker 2: Thanks so much for joining us. What do you think,
48:22
Speaker 2: as you know, someone who is a huge car enthusiast,
48:26
Speaker 2: someone who loves older cars as well as newer cars.
48:28
Speaker 2: About the Alfa Romeo brand, the Alpromeo story, I mean.
48:32
Speaker 12: First of all, thanks for keeping on the chase. I'm
48:34
Speaker 12: so happy to be here with you, Matt. Second of all,
48:37
Speaker 12: what's not to love? This is one hundred plus year
48:41
Speaker 12: old brand with real racing history. It was history, it
48:44
Speaker 12: was winning the Targa Florio in the early nineteen twenties.
48:47
Speaker 12: Of course we have you know, famous Alpha Romeo movie
48:51
Speaker 12: cars like the Little Spider and the Graduate. Of course
48:53
Speaker 12: everyone knows and loves It's got real history, it's Italian.
48:57
Speaker 12: Who doesn't love Italians? And it's it's owned by the
49:02
Speaker 12: largest carbrand in the fourth largest sorry Carbred in the world, Stilantis.
49:05
Speaker 12: Like you said, there's a lot going for I actually
49:08
Speaker 12: like how even the modern cars look. I think they
49:10
Speaker 12: look distinctive, they look interesting, and they're pretty well built.
49:15
Speaker 12: They've got some great specs. They're competitive within the market share.
49:18
Speaker 12: But my caveat is, for whatever reason, Alpha Romeo has
49:22
Speaker 12: really struggled to gain real momentum and real ground.
49:26
Speaker 2: It's very true. I looked at the stats and last
49:31
Speaker 2: year Alfa Romeo sold twelve eight hundred and forty five cars,
49:35
Speaker 2: which is very little, right. BMW sold more than three
49:38
Speaker 2: hundred thirty thousand, Mercedes sold more than three hundred forty thousand.
49:42
Speaker 2: Teslas sold almost half a million cars last year in
49:46
Speaker 2: the US market. So my question is, why doesn't Carlos Tavars,
49:52
Speaker 2: why doesn't Stilantis and this is sixty billion dollar company
49:55
Speaker 2: invest more in this brand. Listen to what Tavares told
49:58
Speaker 2: us on Wednesday, off.
50:01
Speaker 13: Roll maybe is a big success since Stanatius was created.
50:05
Speaker 13: We made a huge turnaround of the business model. It's
50:09
Speaker 13: now a highly profitable brand. It's a growing brand, sixty
50:13
Speaker 13: per volume growth on the H one twenty twenty three
50:17
Speaker 13: compared to last year, so it's growing. It's highly profitable.
50:20
Speaker 13: We have turnaround, We are happy to be in Formula one,
50:24
Speaker 13: and we are going to increase our presence in the US,
50:28
Speaker 13: including at one pointeen ten.
50:31
Speaker 2: So it's interesting that they're getting back into raising Hannah,
50:34
Speaker 2: And I'm sure that's key for an enthusiast like you,
50:37
Speaker 2: But the problem for me is not only well, this
50:40
Speaker 2: car that I was test driving is front wheel drive,
50:42
Speaker 2: which is already like forget about.
50:44
Speaker 6: It for me.
50:45
Speaker 2: Yeah, and I mean, that's just not my thing. But
50:47
Speaker 2: for some people it's a great vehicle because it has
50:50
Speaker 2: its good in the snow, good electric range it has
50:53
Speaker 2: I guess it's okay in the snow, and you could
50:55
Speaker 2: also take longer trips with the motor. But my problem
50:58
Speaker 2: is it breaks down so much much. In JD Power's
51:01
Speaker 2: initial quality survey, they showed two hundred and four issues
51:05
Speaker 2: per hundred vehicles, and that's only the first three months.
51:08
Speaker 2: So in the first three months, every owner essentially has
51:11
Speaker 2: more than two mechanical problems. That's something that they.
51:14
Speaker 6: Have to fix.
51:16
Speaker 12: That's just completely untenable. And unfortunately in the US especially,
51:21
Speaker 12: that has been the existing reputation for Alfa Romeo so
51:25
Speaker 12: much so that it's kind of a joke, even for
51:27
Speaker 12: people who really love the brand and who collect the
51:30
Speaker 12: old cars and who want to buy the new cars.
51:32
Speaker 12: That is just the sticky reputation that they have. And
51:35
Speaker 12: you know, of course, of ours is saying they're pumping
51:37
Speaker 12: money into it and it's successful, but he's talking on
51:40
Speaker 12: a global level. In the US, Alfa Romeo has had
51:43
Speaker 12: a very spotty history history. Let's not forget they were
51:46
Speaker 12: dormant and didn't sell any cars here for several decades.
51:50
Speaker 12: In twenty sixteen, they sold less than fewer than six
51:53
Speaker 12: six hundred cars for the full year in the US.
51:56
Speaker 12: These twelve thousand that they've sold last year were down
52:00
Speaker 12: from the previous year, and this year on they're on
52:03
Speaker 12: track to sell even fewer. There's probably gonna sell around
52:05
Speaker 12: ten thousand. So in the US specifically, you're right. You know,
52:10
Speaker 12: when you think about Alpha Romeo being in the same
52:12
Speaker 12: competitive set as Audi, BMW, Mercedes, even Bolvo, even Jaguar,
52:19
Speaker 12: there's there are a lot of options, so when you're
52:22
Speaker 12: having reliability problems, it's an automatic no go.
52:25
Speaker 2: It's too bad because the Julia and the Stelvio apparently
52:30
Speaker 2: are amazing performance cars, but if they break down, you know,
52:34
Speaker 2: that's that's kind of a deal breaker. Also, you know, Hannah,
52:38
Speaker 2: I was joking with you and you pointed out that
52:40
Speaker 2: everybody made the same joke about the new Ferrari suv.
52:43
Speaker 2: It kind of looks like a maz To Suv. This
52:46
Speaker 2: Alpha Romeo Tonale that I was test driving looks exactly
52:49
Speaker 2: like the Dodge Hornet. I think we might have video
52:52
Speaker 2: of the Dodge Hornet. The reason is that they're essentially
52:55
Speaker 2: the same car. Dodge saw that Alpha was making this,
52:58
Speaker 2: they wanted an entry into the sub compact market, so
53:01
Speaker 2: they just stole it being a sister brand and changed
53:04
Speaker 2: like a couple pieces of sheet metal. But it's ten
53:06
Speaker 2: thousand dollars less, and I can't imagine why anybody would
53:09
Speaker 2: want to pay more for the Alpha when you could
53:12
Speaker 2: get the same car as a Dodge for so much cheaper.
53:17
Speaker 12: Okay, this is where we may disagree, and in a
53:19
Speaker 12: good way, because I feel like you really understand, like
53:24
Speaker 12: the paper the paperwork says the Dodge is the better buy.
53:28
Speaker 12: But I still am a little bit shallow, and I
53:31
Speaker 12: like this sort of Italian cachet that Alpha Romeo has,
53:35
Speaker 12: even though all the things we already know about Alpha Romeo.
53:38
Speaker 12: To me, it does at least have this sort of
53:41
Speaker 12: Italian luxury cachet. So I'm going to still probably go
53:47
Speaker 12: with the Alpha Mao over the Dodge. I also think
53:49
Speaker 12: the interior of the Alpha Romeo looks a little more
53:52
Speaker 12: interesting than the interior of the Hornet. Tell me if
53:55
Speaker 12: I'm wrong, but that's my take.
53:57
Speaker 2: I think you're You're probably right.
53:58
Speaker 1: By the way.
53:59
Speaker 2: The good news is I went on a call it
54:01
Speaker 2: was way too early for you. But this morning at
54:03
Speaker 2: six thirty am, Maserati Ceo da Vido Grosso had a
54:06
Speaker 2: conference call and he said they have poured money into
54:10
Speaker 2: the quality issues to try and fix. Obviously it's a
54:12
Speaker 2: very different brand and a different segment, but they're still
54:15
Speaker 2: both owned by Stalantis. Said they're going to try and
54:17
Speaker 2: fix the quality issues there and they made great headway.
54:20
Speaker 12: I mean, I'm glad to hear it. I do think
54:22
Speaker 12: perception lags behind reality, so maybe a few years before
54:27
Speaker 12: the public consumers pick up on this improvement. And I
54:31
Speaker 12: do think, you know, Alfa Romeo hasn't been marketed strongly
54:36
Speaker 12: in the US the same way that Audi's are marketed,
54:39
Speaker 12: so some of it could just you know, if they
54:41
Speaker 12: keep throwing money at it, we may be we may
54:44
Speaker 12: see some growth.
54:44
Speaker 5: Who knows.
54:45
Speaker 1: All right, Hanna, thanks so much for joining us. Hanna Elliot,
54:47
Speaker 1: staff writer for Bloomberg BusinessWeek from Los Angeles, talking to us.
54:50
Speaker 1: We card talk right there. Why not?
54:52
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
54:55
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever
54:59
Speaker 2: podcast platf form you prefer. I'm Matt Miller, I'm on
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Speaker 2: Twitter at Matt Miller nineteen seventy three, and I'm Paul Sweeney.
55:06
Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you
55:09
Speaker 1: can always catch us worldwide at Bloomberg Radio