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Markets, The Fed, Currency, And Healthcare (Podcast) · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  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. Daily national average gasoline
• 0:23
  Speaker 1: prices according to Triple A five dollars four dollars and
• 0:27
  Speaker 1: cents of barrel regular, unleaded regular, agaunt agunt, Yeah, barrel
• 0:32
  Speaker 1: a gallant a barrel of gas that would be enough
• 0:35
  Speaker 1: to fill now you. I mean, it's just amazing. So
• 0:39
  Speaker 1: that kind of brings to me. That's inflation. So but
• 0:41
  Speaker 1: everybody says CP I, you know X energy and food.
• 0:44
  Speaker 1: I'm like, how can you can't X out energy and
• 0:48
  Speaker 1: agree with you? Why would you? Why would you? So
• 0:50
  Speaker 1: I get why economists do it in an esoteric, like
• 0:55
  Speaker 1: academic way, because they feel that those costs or prices
• 0:59
  Speaker 1: are ada tory. But um, there is no way that
• 1:02
  Speaker 1: a public facing civil servant should ever use an inflation
• 1:08
  Speaker 1: X X everything you need to live. Right, Let's see
• 1:11
  Speaker 1: if a portfolio manager does this stuff for living. Did
• 1:14
  Speaker 1: they go extra? Did they look at the whole thing? Hey,
• 1:16
  Speaker 1: Desch Bonde, Founder and Chief investment officers, Centerstone Investors, Uh,
• 1:20
  Speaker 1: thanks so much for joining us. I mean, inflation is
• 1:21
  Speaker 1: out there. How does that factor in I eat inflation
• 1:26
  Speaker 1: and the FEDS ability to team inflation, how does that
• 1:29
  Speaker 1: factor into your investment outlook? Inflation is elevated, remains elevated,
• 1:35
  Speaker 1: but um, you know you are going to be hopefully
• 1:39
  Speaker 1: like in a month or two, starting to overlap or
• 1:41
  Speaker 1: laugh some of the higher or the steeper rate increases
• 1:46
  Speaker 1: from last year. So I think inflation should probably um,
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  Speaker 1: kind of settle down a little bit and allow the
• 1:53
  Speaker 1: market and breathing room. But the feed is still way behind.
• 1:56
  Speaker 1: Even if inflation settles down to four or five percent,
• 1:58
  Speaker 1: you know, set is still uh you know, behind the curve.
• 2:03
  Speaker 1: It's just going to be interesting for them to be,
• 2:05
  Speaker 1: you know, in a position to have to continuously raise
• 2:07
  Speaker 1: interest rates while the economy is slowing down. For us
• 2:11
  Speaker 1: as value investors at center Stone, you know, um, the
• 2:14
  Speaker 1: fact that money and capital has a cost again is
• 2:18
  Speaker 1: that it's it's it's new, and it means that cash
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  Speaker 1: flow has some value. It's a value as much as
• 2:26
  Speaker 1: we look at cash flow as an important determinant of
• 2:30
  Speaker 1: or an input into the valuation with business companies that
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  Speaker 1: generate cash flows, you know, I eat the types of
• 2:36
  Speaker 1: things we invest should be you know, uh in favor,
• 2:39
  Speaker 1: and they have been for the last many months now,
• 2:43
  Speaker 1: So is you know? I just had breakfast over at
• 2:46
  Speaker 1: the where's that place? We go? The lows at the
• 2:51
  Speaker 1: Regency short was wonderful. Where the entrepreneur who used to
• 2:55
  Speaker 1: always start these kind of UM revenue general raiding tech companies,
• 3:01
  Speaker 1: you know, and just grow the top line and then
• 3:04
  Speaker 1: sell him Now he says, I'm done with that. I'm
• 3:06
  Speaker 1: just focusing on cash cows. And we see the same
• 3:09
  Speaker 1: thing abbe in e t s, right, You see a
• 3:12
  Speaker 1: lot of inflows into these e t f s that
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  Speaker 1: have big cash flow generating companies and out of like
• 3:18
  Speaker 1: the queues. So is this is value finally going to overtake?
• 3:23
  Speaker 1: For lack of a better work, because I know people
• 3:25
  Speaker 1: quibble about the meaning of value and growth, but are
• 3:27
  Speaker 1: you gonna start seeing that rotation UM really stick this year?
• 3:33
  Speaker 1: It's um. You know, It's started about a year ago,
• 3:35
  Speaker 1: the rotation as it were, and now it's gathering pace.
• 3:38
  Speaker 1: I think it's become fairly obvious that the large cap
• 3:42
  Speaker 1: growth stocks are or were over over priced UM and
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  Speaker 1: their overpriced in a in a in a environment where
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  Speaker 1: growth is slowing. So then you look at your alternatives,
• 3:53
  Speaker 1: and you look at companies that have been kind of
• 3:55
  Speaker 1: basically ignored for ten years, my own companies that like
• 3:57
  Speaker 1: Parago and we Besoft, that are trading at fraction of
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  Speaker 1: their intrinsic values. Companies that generate cash free cash flow
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  Speaker 1: in general and distribute that to share orders through rather
• 4:07
  Speaker 1: buy backs or dividends, and so so I'm of the
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  Speaker 1: mind that that turn already happened. It's gathering pace. Whether
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  Speaker 1: it's you know, for the one year, I don't know
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  Speaker 1: if I can make a prediction for like just another
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  Speaker 1: six seven months, but I'd say for the next three
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  Speaker 1: or five years that the winds are in the sales
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  Speaker 1: of value oriented approaches and I'll buy. I mean, you know,
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  Speaker 1: value investing is not for the faint of heart. What
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  Speaker 1: led you into the value camp, Well, it's I think
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  Speaker 1: it's a it's a personality thing, like you know, for
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  Speaker 1: it's a point of view where a business has an
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  Speaker 1: intrinsic value UM it's determined by cash flows and tangible things,
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  Speaker 1: and to me, that's just real um. As opposed to
• 4:56
  Speaker 1: me trying to understand what is the potential growth of
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  Speaker 1: some company that doesn't have any revenues ten years from now,
• 5:02
  Speaker 1: what's it going to look like? That? To me, there
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  Speaker 1: are so many paths, you know, so many uh undetermined
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  Speaker 1: variables and unknowable variables that that can throw you off
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  Speaker 1: the path, as opposed to the burden hand of a
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  Speaker 1: value company, where you know, I don't have to make
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  Speaker 1: so many guesses about things. To me, it's just a
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  Speaker 1: it's just a it's just a matter of understanding or
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  Speaker 1: agreeing that the future is uncertain. If the future is uncertain, um,
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  Speaker 1: you know, the most value I can add and keep
• 5:32
  Speaker 1: on using that word, but the most value I can
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  Speaker 1: add to our shareholders is to invest in companies where
• 5:37
  Speaker 1: uh there's some predictability to the outcome. So I love
• 5:41
  Speaker 1: that kind of investing. It's always been what I've been
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  Speaker 1: doing for thirty years. I feel like it is. I
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  Speaker 1: feel like I would uh feel safer investing in value
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  Speaker 1: than growth. You would you feel safer, But it's just
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  Speaker 1: over my thirty plus odd your career it's been growth.
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  Speaker 1: There's been a lot of head things. That's why I
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  Speaker 1: was asking if it would stick. But they also came
• 6:00
  Speaker 1: up under some of the most legendary names in value investors,
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  Speaker 1: John Marie Viard and Charles Duvot. Maybe they teach it
• 6:08
  Speaker 1: at the University of Louisville, I'm not sure, but anyway,
• 6:11
  Speaker 1: thank you so much for joining us. Always good stuff there, Uh,
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  Speaker 1: founder and Chief investment officer center Stone Investors. I want
• 6:23
  Speaker 1: to bring in Danielle di Martino Booth. She is a big,
• 6:26
  Speaker 1: big star here at Bloomberg Markets. We love having her
• 6:29
  Speaker 1: on to give us thoughts on these markets and on
• 6:32
  Speaker 1: the Federal Reserve. She's at CEO and chief strategist for
• 6:35
  Speaker 1: Quill Intelligence, former advisor at the Federal Reserve Bank of Dallas. So, Danielle,
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  Speaker 1: thanks so much for taking the time again to chat
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  Speaker 1: with us here. We have a FED meeting next week
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  Speaker 1: which we expect. Well, um, I think that we should
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  Speaker 1: expect given you know, I called him the Holy Trinity
• 6:53
  Speaker 1: John Williams, Lele brainerd Jerome Powell. You know that that's
• 6:56
  Speaker 1: the power seat that by share, they want to see
• 7:00
  Speaker 1: share of the FEMC vice share the photo reserve board.
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  Speaker 1: They've maintained their hawk is stand. I think they've got
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  Speaker 1: their eye on September. Ira Jersey give a really runoff
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  Speaker 1: was just a few minutes ago. I think they have
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  Speaker 1: their eye on getting to that third fifty basis point
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  Speaker 1: rate hike in front of us in September and achieving
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  Speaker 1: that almost one billion dollar a month run runoff rate
• 7:24
  Speaker 1: for the balance sheet. I think they're going to try
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  Speaker 1: and communicate that in this coming week's meeting. I didn't
• 7:30
  Speaker 1: get a chance to ask iro A Jersey UM earlier
• 7:34
  Speaker 1: about the auction this afternoon. Normally I don't care about auctions, UM,
• 7:38
  Speaker 1: I probably care less than anyone else in the building,
• 7:41
  Speaker 1: But apparently like this is a big deal today. I
• 7:44
  Speaker 1: think it's gonna be a forty four billion dollar three
• 7:47
  Speaker 1: year sale at one o'clock, and it'll be the first
• 7:51
  Speaker 1: time that the FED doesn't play a big part. Right,
• 7:55
  Speaker 1: the Fed's not playing a big part. And this will
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  Speaker 1: indeed be a litmus tests for what the private investor community,
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  Speaker 1: what their appetite is. And you know, look at these levels.
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  Speaker 1: I think that a lot of insurance companies, public pensions. Initially,
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  Speaker 1: there's gonna be this massive amount of relief that they
• 8:15
  Speaker 1: can come in and get short paper at high heel.
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  Speaker 1: And so I don't think that there's We're gonna watch
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  Speaker 1: it closely, don't get me wrong, UM, but to irish points.
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  Speaker 1: Once we get further down the line and get through
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  Speaker 1: natural buyers, people who are desperate for yield. Once they
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  Speaker 1: get through that population, I think them we're gonna have
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  Speaker 1: to be watching out for for what's to come in
• 8:39
  Speaker 1: terms of do we see the potential for higher rates
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  Speaker 1: because we have to pull buyers out of the woodwork
• 8:47
  Speaker 1: Danielle over the next several months. What is the what
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  Speaker 1: type of mistake could the Federal Reserve make that maybe
• 8:55
  Speaker 1: you're on the lookout for, whether it be maybe too
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  Speaker 1: aggressive or maybe not aggressive enough. What's the mistake that
• 9:01
  Speaker 1: you're maybe have on the on your radar. So I'm
• 9:05
  Speaker 1: going to borrow the wisdom of Tom Honig, who I
• 9:07
  Speaker 1: have tremendous respect for. He was the head of the St.
• 9:09
  Speaker 1: Louis Fed for a long time, UM, and he said
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  Speaker 1: that one of the mistakes that was made, uh was
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  Speaker 1: that when the Fed was was was changing its policy stance,
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  Speaker 1: that they didn't stop and pause. And it's not for
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  Speaker 1: I'm not necessarily advocating for the FED to stop or
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  Speaker 1: pause in in September and not and and just stop
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  Speaker 1: and pause for the entire cycle. But monetary policy does
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  Speaker 1: act with a lag. What we learned from the the
• 9:38
  Speaker 1: national Sessions of Credit Managers was that both UM both
• 9:43
  Speaker 1: delivery excuse me, both collection times for services and manufacturing
• 9:47
  Speaker 1: dipped into negative territory in May. That's the entire economy.
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  Speaker 1: Last time we had that was in December two thousand seven,
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  Speaker 1: when the economy entered the Great Recession. So my concern
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  Speaker 1: is that we were entering recession and that it that
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  Speaker 1: that pushes too far, that this could be not a quick,
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  Speaker 1: shallow recession that a more prolonged and deep one. But
• 10:07
  Speaker 1: you do think we are going to go into a recession,
• 10:10
  Speaker 1: right because we've had a lot of big economists, big
• 10:15
  Speaker 1: names UM like I keep referencing Ed Hyman pushed back
• 10:19
  Speaker 1: against UM that that idea and say at least it's
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  Speaker 1: not their base case for this year or UM. You
• 10:27
  Speaker 1: know Ed and I go back a long time. We're
• 10:30
  Speaker 1: both University of Texas, you know, crazy crazy UM freaks
• 10:34
  Speaker 1: and I respect at but everything that we're seeing, whether
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  Speaker 1: it's in in car sales. I spoke to somebody who
• 10:41
  Speaker 1: is it when I set X is biggest distribution centers
• 10:45
  Speaker 1: in Portland, Oregon. He said he's never seen a slowdown
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  Speaker 1: that like this in twenty five years, just in terms
• 10:51
  Speaker 1: of this year volume. And that's what we're hearing. We're
• 10:53
  Speaker 1: hearing from Amazon, we're hearing from targets they're sitting on
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  Speaker 1: in the demand has been destroyed and it's going to
• 10:59
  Speaker 1: come through with the lack. I wouldn't be surprised to
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  Speaker 1: see another big number with consumer credit out at this afternoon,
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  Speaker 1: late PCE afternoon, because Americans are putting more and more
• 11:07
  Speaker 1: on their credit cards to sustain their consumption patterns. But
• 11:11
  Speaker 1: that's not that's not you can't prolong that with Jan
• 11:14
  Speaker 1: Hatzias at Goldman Sachs recently warned about so are are
• 11:18
  Speaker 1: we in stagflation now? Are we in or are we
• 11:21
  Speaker 1: even worse in a recession? Now? Do you think? Do
• 11:23
  Speaker 1: you think inflation is peaked? Danielle. I do think that,
• 11:28
  Speaker 1: especially on the discretionary side, that inflation is peaked. J Powell,
• 11:33
  Speaker 1: he's trying to break the back of housing speculation, and
• 11:36
  Speaker 1: that's where the policy mistake could come because that that
• 11:40
  Speaker 1: input into the CPI is higher than it was at
• 11:43
  Speaker 1: the than it was at the peak of the housing
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  Speaker 1: bubble right now, and we know that it's going to
• 11:47
  Speaker 1: continue to filter through a very high level CPI. Even
• 11:51
  Speaker 1: if we see discretionary inflation come off its tides, which
• 11:53
  Speaker 1: we know is happening, there are other there are other
• 11:56
  Speaker 1: very sticky forms, and going into a midstrom election, politicians
• 12:00
  Speaker 1: are going to be focused on headline CPI. They're not
• 12:03
  Speaker 1: going to give the FED the luxury of focusing on
• 12:06
  Speaker 1: the core and and food and energy right now are
• 12:09
  Speaker 1: not in the under the Fed's control. So yes, discretionary
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  Speaker 1: inflations off its highs, but there are other persistent, sticky
• 12:15
  Speaker 1: forms that continue to input to feed into the cp
• 12:18
  Speaker 1: I inputs at the same time that I think it's
• 12:20
  Speaker 1: highly feasible that we're already in recession right now. You've
• 12:23
  Speaker 1: got GDP estimates somewh around the two mark for the
• 12:27
  Speaker 1: current quarter ending June. By the way, I have a
• 12:30
  Speaker 1: listener writing in asking if you think we've seen the
• 12:32
  Speaker 1: highs in rates or can rates go higher because the
• 12:36
  Speaker 1: FED has difficulty controlling inflation. This is something that Ira
• 12:40
  Speaker 1: Jersey also is saying. He's at least close to on
• 12:43
  Speaker 1: the long end of highs and rates. And I would
• 12:47
  Speaker 1: agree with Ira because there's only so much you can
• 12:49
  Speaker 1: do to combat a turn in the labor force, and
• 12:52
  Speaker 1: that is that that's your biggest signpost um for your
• 12:56
  Speaker 1: long rates. We've we've seen two consecutive months of negative
• 13:00
  Speaker 1: net revisions. We've seen two consecutive months of part time
• 13:03
  Speaker 1: working part time for economic reason to tick up. You've
• 13:06
  Speaker 1: seen your underemployment rate pick up for two months. We're
• 13:09
  Speaker 1: seeing signs of turning in the labor force. Once the
• 13:12
  Speaker 1: labor force turns your past tense looking into the rear
• 13:15
  Speaker 1: view mirror in recession, that signals your peak in long rates.
• 13:20
  Speaker 1: All right. Every time we talked to Danielle and you
• 13:23
  Speaker 1: get Danielle and Ira on the same day, Well, I
• 13:26
  Speaker 1: was just thinking that is awesome. Let's get Danielle on
• 13:29
  Speaker 1: with Ed with Ed Hyman. Sure, get the two of them,
• 13:32
  Speaker 1: and next time you're in New York, Danielle, we're gonna
• 13:34
  Speaker 1: set this all up. I'm gonna call Ed. I love it,
• 13:37
  Speaker 1: and that would be fantastic, all right, Danielle di Martino Booth.
• 13:41
  Speaker 1: We can corner in our wardrobes. Will both wear burnt
• 13:43
  Speaker 1: orange fort Yes, yes, perfect. Perfect. Daniel D. Martino booth
• 13:48
  Speaker 1: uh U t Alam also the CEO of Quill Intelligence
• 13:53
  Speaker 1: and highly respect. A lot of our listeners love to
• 13:56
  Speaker 1: hear her give talks. Also, great social game. Her twitter
• 14:00
  Speaker 1: feed is really informative. I don't really tweet much. She
• 14:04
  Speaker 1: just read her tweets and get smart. I'll check it out.
• 14:06
  Speaker 1: I'll check it out, Okay, Danielle. Great to have you on.
• 14:08
  Speaker 1: Thanks so much for joining us. Um, well, usually Paul,
• 14:13
  Speaker 1: you do this part. What do I do now? To
• 14:14
  Speaker 1: just kind of say, hey, we'll talk in a few minutes.
• 14:16
  Speaker 1: This is Bloomberg right now. We want to bring in something.
• 14:23
  Speaker 1: You know, a guy who's traded this stuff all over
• 14:25
  Speaker 1: the place. Now, I don't think we're ever going to
• 14:27
  Speaker 1: see him in the offices here. He is a work
• 14:30
  Speaker 1: from home pro and that is Vince Signaola global macro
• 14:33
  Speaker 1: strategist for Bloomberg News. He can do this stuff from anywhere.
• 14:36
  Speaker 1: So Vince, thanks so much for joining us here. Curtious
• 14:39
  Speaker 1: just kind of highlighting currencies out there. Is there a
• 14:42
  Speaker 1: bear market case for the U S Dollar? Not yet?
• 14:46
  Speaker 1: Not yet, And we won't talk about my trading options
• 14:49
  Speaker 1: from the beaches a cup or something. We go, um,
• 14:54
  Speaker 1: not not yet. I mean, there's definitely an argument upcoming,
• 14:57
  Speaker 1: if you will, but not just quite yet situation. One
• 15:00
  Speaker 1: of the things I point out to you is there's
• 15:02
  Speaker 1: an amazing inverse correlation right now between the dollar and equies.
• 15:05
  Speaker 1: And we saw it this morning. The dollar rolled over
• 15:07
  Speaker 1: and we saw a bid and equities once again, typically
• 15:10
  Speaker 1: the dollars the tail where you know, and not wagging
• 15:13
  Speaker 1: the dog. But for the last two days, the dollars
• 15:15
  Speaker 1: actually been leading the equity markets. And one of the
• 15:19
  Speaker 1: reasons is, without getting too deep in the weeds of
• 15:21
  Speaker 1: this is what what's been driving inflation is commodities. It's
• 15:25
  Speaker 1: not a demand for money, it's not a supply for
• 15:27
  Speaker 1: money per se um. You know, the Fed's monetary polly
• 15:30
  Speaker 1: has policy hasn't changed for fifteen years. We haven't really
• 15:33
  Speaker 1: seen any inflation for fifteen years. Now, all of a sun,
• 15:36
  Speaker 1: we're seeing it because of the commodity pricess. That's something
• 15:39
  Speaker 1: that's legitimately out of control with the Fed. And the
• 15:42
  Speaker 1: more they take money out of the system, and the
• 15:45
  Speaker 1: more they do this reduction of the balance sheet and
• 15:48
  Speaker 1: higher interest rates, the greater divergence between the demand and
• 15:51
  Speaker 1: supply for money, and as that diverges, you see a
• 15:55
  Speaker 1: greater demand for the dollar. And so I think in
• 15:57
  Speaker 1: the near term, as pretty was mentioning, I think we're
• 16:00
  Speaker 1: going to see a little bit more demands for the
• 16:02
  Speaker 1: dollar than it's going to be a little choppy. Obviously,
• 16:05
  Speaker 1: what um what Powell says that an espressor after the
• 16:10
  Speaker 1: MC as everyone expects, hikes next Wednesday. UM, my hope
• 16:14
  Speaker 1: is exactly opposite of what. So, I'm sorry to interrupt you.
• 16:18
  Speaker 1: I'm so god it's got to be. It's it's a
• 16:20
  Speaker 1: really good moment when your teacher, your former mentor and
• 16:23
  Speaker 1: teacher says the student was right. It Vince, I got
• 16:28
  Speaker 1: she's been making your argument over the last several days,
• 16:31
  Speaker 1: and no one believes me that like this doesn't matter.
• 16:34
  Speaker 1: It's flat and unchanged. You're totally right. But let me
• 16:37
  Speaker 1: go cross acid here because if you actually and this
• 16:39
  Speaker 1: is what's so interesting to me, A lot of the
• 16:40
  Speaker 1: correlations that we saw two years ago, which, by the way,
• 16:43
  Speaker 1: Vince also taught me correlations all my rants are really
• 16:47
  Speaker 1: Vince's fault. Um, But if you look at what kind
• 16:49
  Speaker 1: of happened with oil prices, hired stocks, hire all these
• 16:53
  Speaker 1: risk assets that are traditionally supposed to be risk assets,
• 16:56
  Speaker 1: they're moving together again in a way that they haven't.
• 16:59
  Speaker 1: I would are you year to date, vince your take
• 17:02
  Speaker 1: on that? Well? Um, yes, I mean you know, all
• 17:06
  Speaker 1: correl all correlations equal one at some point or another
• 17:11
  Speaker 1: regarding UL price though, And if you're an FX guy
• 17:14
  Speaker 1: and you're looking how to play this, you know you
• 17:15
  Speaker 1: were mentioned was he again earlier? CAD yen is an
• 17:18
  Speaker 1: exceptional thing to look at. CAD next border of oil?
• 17:22
  Speaker 1: U what am I doing now? Canadian dollar to the end,
• 17:28
  Speaker 1: so you can bike if you think oil. Okay, that's
• 17:31
  Speaker 1: what I get all right, I'm I'm speaking for every
• 17:33
  Speaker 1: single one of our listeners out there. True, Okay, I
• 17:36
  Speaker 1: got it? Continue an sorry, so no. In a commodity play, um,
• 17:43
  Speaker 1: you have to like Canada for a variety of reasons,
• 17:45
  Speaker 1: major export or commodities uh oil as well. Um. And
• 17:50
  Speaker 1: if if you think you know, you can watch the
• 17:52
  Speaker 1: Bloomberg Commodity Index. I think we hit historical hives yesterday.
• 17:57
  Speaker 1: If you if you expect that to continue, I I
• 18:00
  Speaker 1: would look for the oil exporters to continue to do
• 18:03
  Speaker 1: better currency wise, kind of way. By the way, Vince,
• 18:07
  Speaker 1: do we almost unrelated? Do we import deflation when the
• 18:11
  Speaker 1: end goes to one thirty two? I mean, I'm just
• 18:14
  Speaker 1: thinking about Ford and GM and Chrysler buying parts from Japan.
• 18:19
  Speaker 1: They can get a lot more for a lot less now, Yeah,
• 18:22
  Speaker 1: absolutely if that's where they're getting in from the norward
• 18:25
  Speaker 1: China these days. But yes, absolutely correct. Um, it's it's
• 18:29
  Speaker 1: always but the flip side of the coin fluid automakers
• 18:32
  Speaker 1: where they always pushed back is when the end weekends. Uh,
• 18:35
  Speaker 1: the Japanese automakers have a huge advantage over US automake
• 18:39
  Speaker 1: good point. It's a double edged sword, really, all right, Vince,
• 18:43
  Speaker 1: good stuff. Always love having you. We're gonna have you
• 18:44
  Speaker 1: every couple of weeks now, so you're you're locked in.
• 18:46
  Speaker 1: Vince Cigarella, Global macro strategists and also cretic UH Markets corresponded,
• 18:51
  Speaker 1: joining us talking a little bit of the currency set.
• 18:56
  Speaker 1: June is Pride month and a month when we felt
• 19:00
  Speaker 1: you selling equality issues here at Bloomberg. Today we bring
• 19:03
  Speaker 1: in Oregon CEO Kevin Ali to talk about women's healthcare
• 19:08
  Speaker 1: and experiending healthcare for all. Kevin, thanks so much for
• 19:11
  Speaker 1: joining us. Here. You know, I read a recent stat
• 19:13
  Speaker 1: that only four percent of global funding for research and
• 19:16
  Speaker 1: development and healthcare services go towards women's health. That really
• 19:20
  Speaker 1: shocked me. Talk to me about what you guys that
• 19:22
  Speaker 1: organon are doing here to address the women's healthcare market
• 19:28
  Speaker 1: with your Paul and I gotta say that, you know,
• 19:30
  Speaker 1: we're really excited because last week we celebrated our one
• 19:33
  Speaker 1: year anniversary since the bell ringing ceremony that we had
• 19:36
  Speaker 1: the New York Talk Exchange, and we need to do
• 19:39
  Speaker 1: really three things to you know, four investors to really
• 19:42
  Speaker 1: believe in organize a company. First and foremost, we said
• 19:45
  Speaker 1: we would stabilize our established brands business, and we've done that.
• 19:49
  Speaker 1: We said we would drive our biosimilars business by double digits.
• 19:54
  Speaker 1: We've done that. And now turning to your point, which
• 19:56
  Speaker 1: is women's health, we said basically that we're going to
• 19:58
  Speaker 1: be an active player in business development because there are
• 20:01
  Speaker 1: a number of assets out there looking for a home
• 20:04
  Speaker 1: at a reasonable valuation. We've got great cash flow, so
• 20:07
  Speaker 1: we've been able to do five business deals over the
• 20:10
  Speaker 1: last year to kind of buttress our Our business are
• 20:13
  Speaker 1: thriving reproductive health business. So we've gone from two areas
• 20:17
  Speaker 1: of focus in fertility and contraception now to seven areas
• 20:21
  Speaker 1: of focus, uh, literally in one year. So we're very pleased.
• 20:24
  Speaker 1: You know, R and D is starting to emerge in
• 20:26
  Speaker 1: the space, and we're a great player to be a
• 20:29
  Speaker 1: global leader in the women's health space. There's no other
• 20:31
  Speaker 1: large pharma company quite like us in terms of our focus,
• 20:35
  Speaker 1: so we're very happy with our potential future options here.
• 20:37
  Speaker 1: By the way, Kevin, I know, well a lot of times,
• 20:39
  Speaker 1: at least executives don't like to talk politics, and but
• 20:45
  Speaker 1: we can't have a conversation about women's health and equality
• 20:48
  Speaker 1: without talking about, um uh, the possibility of ROW being overturned.
• 20:55
  Speaker 1: How do you react? Um? How have your employees reacted
• 21:00
  Speaker 1: to this what what appears to be, at least from
• 21:03
  Speaker 1: one point of view, a huge setback in women's rights. Yeah, look,
• 21:09
  Speaker 1: you know, I'll tell you, Paul, I think everyone is
• 21:12
  Speaker 1: clearly paying attention. As you said, it's still not determined
• 21:15
  Speaker 1: fully yet obviously soon we'll find out soon enough. But
• 21:19
  Speaker 1: here's the something focus I mean, really, I mean, you know,
• 21:22
  Speaker 1: the employees we call founders of this company, all nearly
• 21:25
  Speaker 1: ten thousand strong, are focused on our vision of a
• 21:28
  Speaker 1: better and healthier every day for every woman. Part of
• 21:32
  Speaker 1: that focus is really on trying to solve the issue
• 21:35
  Speaker 1: of unintended pregnancies, of which more than fifty of all
• 21:39
  Speaker 1: pregnancies in the United States are and intended the same
• 21:41
  Speaker 1: x x us has been that way for nearly a decade, uh,
• 21:46
  Speaker 1: you know, And so we're starting to invest in things like,
• 21:48
  Speaker 1: for example, education and awareness so that she can have
• 21:51
  Speaker 1: better discussions with health with her health care provider, and
• 21:55
  Speaker 1: offering up um really unique innovative ideas like next one
• 21:58
  Speaker 1: on which is in curitible rod that we have long
• 22:01
  Speaker 1: acting reversible contraceptive that the potentially essentially says the woman
• 22:06
  Speaker 1: having to think about unintended pregnancy for three years with
• 22:09
  Speaker 1: a ninety nine point eight percent effectiveness level. So we're
• 22:13
  Speaker 1: focused on our end of the spectrum, which is really
• 22:15
  Speaker 1: trying to bring innovative and unique solutions to solve some
• 22:19
  Speaker 1: of these significant unmend needs like unintended pregnancies. All right, So, Kevin,
• 22:25
  Speaker 1: you spun out from merk last year right in the
• 22:27
  Speaker 1: midst of a global pandemic. Talk to us about what
• 22:30
  Speaker 1: that was like. Yeah, the book is waiting to be written.
• 22:35
  Speaker 1: Trust me when I tell you that, Um, you know,
• 22:39
  Speaker 1: it has been tremendous challenge in terms of being able
• 22:42
  Speaker 1: to wrap everybody up to to get out from you know.
• 22:46
  Speaker 1: You know, this business took a lot of complexity, a
• 22:48
  Speaker 1: lot of a lot of folks involved, god countless number
• 22:52
  Speaker 1: of consultants and folks of that nature. But I think
• 22:55
  Speaker 1: one of the things I've learned in this process of
• 22:58
  Speaker 1: it last year, the strong of our culture and purpose
• 23:01
  Speaker 1: that you have, the more discretionary effort you're going to
• 23:05
  Speaker 1: get from your employees. And the purpose was so well
• 23:08
  Speaker 1: articulated and so incredibly connected to that that created the
• 23:13
  Speaker 1: discretionary effort, so you don't really need an office space.
• 23:16
  Speaker 1: And to ensure everybody is you know, crossing the t's
• 23:19
  Speaker 1: and dot in the eyes. Everybody worked like crazy. And
• 23:22
  Speaker 1: it's nice to say that now that we're one year
• 23:25
  Speaker 1: and we can look back and the rear view mirror
• 23:27
  Speaker 1: and say, you know, all things have just gone beautifully
• 23:30
  Speaker 1: well knock on wood, because a lot of things could
• 23:33
  Speaker 1: have gone wrong, and as a matter of fact, that
• 23:35
  Speaker 1: consultants didn't want to scare me with all the things
• 23:38
  Speaker 1: that could have gone wrong in a pandemic. But so far,
• 23:40
  Speaker 1: so good. Um, knock on wood. All all things being equal,
• 23:44
  Speaker 1: you know, we've been able to deliver everything that we
• 23:46
  Speaker 1: said to shareholders and two investors and analysts, and I
• 23:49
  Speaker 1: think are developing credibility in a very quick rate. And
• 23:52
  Speaker 1: you've had a lot going on, um, you know, besides,
• 23:55
  Speaker 1: it's been off very active in terms of M and
• 23:58
  Speaker 1: A as well. What about UM the E s G phenomenon,
• 24:02
  Speaker 1: which has grown at incredible pace. You've just published your
• 24:06
  Speaker 1: first E s G report. That's right, that's right. And look,
• 24:11
  Speaker 1: from the first day we actually spun out, we saw
• 24:13
  Speaker 1: a unique opportunity to connect our vision and purpose of
• 24:17
  Speaker 1: a better healthier and healthier every day for every woman
• 24:20
  Speaker 1: to a very unique and differentiated E s G platform
• 24:24
  Speaker 1: UM and it's called Her Promise and we actually UM
• 24:27
  Speaker 1: published that literally a year after launch, which in itself
• 24:31
  Speaker 1: is a tremendous achievement by the team. But the really
• 24:34
  Speaker 1: the focus is on, you know, solving some of these
• 24:36
  Speaker 1: great on met needs out there. That's why essentially the
• 24:39
  Speaker 1: S and the E s G is one of our
• 24:41
  Speaker 1: kind of superpowers in the sense that you know, we
• 24:43
  Speaker 1: half of the product that we actually deliver. I talked
• 24:47
  Speaker 1: about next one on our reversible, long acting, reversible contraceptive
• 24:51
  Speaker 1: is given to low and middle income countries for you
• 24:54
  Speaker 1: essentially almost a cost, and so that essentially says we've
• 24:58
  Speaker 1: got an opportunity to create more, you know, opportunities like
• 25:02
  Speaker 1: next for the world and the same thing for governors
• 25:04
  Speaker 1: and good uh all right, Kevin, great, great stuff. Thanks
• 25:07
  Speaker 1: so much for taking the time. Kevin Ali, CEO of
• 25:09
  Speaker 1: Oregon on as a polpy traded company. Oh g N
• 25:13
  Speaker 1: is the symbol. Thanks for listening to the Bloomberg Markets podcast.
• 25:17
  Speaker 1: You can subscribe and listen to interviews with Apple Podcasts
• 25:21
  Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
• 25:25
  Speaker 1: on Twitter at Matt Miller three. Pet On Ball Sweeney
• 25:29
  Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you
• 25:31
  Speaker 1: can always catch us worldwide at Bloomberg Radio.