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The Fed, Earnings, and EV Chargers · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast.
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Speaker 2: I'm Paul Sweeney alongside my co host Matt Miller. Every
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Speaker 2: 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. Find
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Speaker 2: the Bloomberg Markets Podcast called Apple Podcasts or wherever you
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Speaker 2: listen to podcasts, and at Bloomberg dot com slash podcast.
0:21
Speaker 3: We are going to pivot a little bit to go
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Speaker 3: more macro.
0:23
Speaker 4: Here.
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Speaker 3: We've got our very own Michael McKee, international economics and
0:27
Speaker 3: Policy correspondent. In our guest note for you, McKee, I'm
0:30
Speaker 3: learning so much. You're a White House correspondent. Oh yeah,
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Speaker 3: I didn't know about that years ago. To me, you're
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Speaker 3: just literally the fed person and you came out of
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Speaker 3: the womb covering the fest.
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Speaker 5: I did politics for twenty years and it's spent nine
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Speaker 5: years at the White House, and I got bored and
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Speaker 5: they said.
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Speaker 1: Okay, you can word at the White House.
0:48
Speaker 5: It's not as much fun as people think.
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Speaker 3: From twenty sixteen.
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Speaker 5: It's great to do the big stories of the day,
0:57
Speaker 5: but you can't go anywhere. You can't you can only
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Speaker 5: talk to people on the phone, and when you travel
1:02
Speaker 5: with the White House you travel in a giant cavalcade
1:05
Speaker 5: like a circus. You fly to a city, you get
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Speaker 5: on a bus, you go to a hotel meeting room,
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Speaker 5: and then you get on the bus and go back again. There.
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Speaker 5: You can do a lot more on other.
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Speaker 3: Beats well, and as you've proven on the FED beat,
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Speaker 3: So talk to me about what you're looking at when
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Speaker 3: it comes to next week. It's kind of foregone conclusion
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Speaker 3: that we're going to see a hike. What is your
1:27
Speaker 3: question going to be when it comes to speaking in
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Speaker 3: the FED meeting afterwards? What are you looking to hear
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Speaker 3: from Powell?
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Speaker 5: Well, we're going to fly to Washington and get in
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Speaker 5: a taxi and go to a meeting room and wait
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Speaker 5: for j.
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Speaker 6: Powell.
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Speaker 5: Very far, the thing that everybody wants to know is
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Speaker 5: what's next. There's a ninety five percent chance priced in
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Speaker 5: the market that they're going to raise rates, and that's
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Speaker 5: basically one hundred percent given the complexity of that calculation.
1:52
Speaker 5: And so do they go another time? Given the data
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Speaker 5: suggests they don't have to at the moment, but there
2:00
Speaker 5: are reasons to think the data might turn around, and
2:02
Speaker 5: so that's going to be kind of a question that
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Speaker 5: overhangs everything in the FED meeting, do they go again,
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Speaker 5: and if they then are going to go again, do
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Speaker 5: they wait until November and do another skip in September.
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Speaker 3: Do you anticipate them saying anything in that FED meeting
2:20
Speaker 3: next week that will indicate what they're going to do next?
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Speaker 3: Or is it going to be we're open the totality.
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Speaker 5: Of the data where Yeah, I think the latter, because
2:28
Speaker 5: they don't want to lock themselves into something, because we're.
2:30
Speaker 6: Going to have a lot of data.
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Speaker 5: Between now and say November, if they wanted to sort
2:35
Speaker 5: of program a skip in there, you'll have a number
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Speaker 5: of employment reports and CPI reports and PCE reports, So
2:43
Speaker 5: the whole character of the debate could change very easily.
2:46
Speaker 7: Yeah, And we have a slew of economic data coming
2:49
Speaker 7: out next week as well. You know, if you were
2:51
Speaker 7: to pick kind of one data point that you're most
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Speaker 7: focused on given following the FED, what would it be.
2:58
Speaker 5: Well, Friday's pc report will tell us a couple of things.
3:01
Speaker 5: One is in their favorite inflation indicator, it's expected to
3:06
Speaker 5: drop the way CPI did, maybe not as much, but
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Speaker 5: to show progress on inflation, but also spending, our consumers
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Speaker 5: holding up. Are they still spending but at a lower rate,
3:17
Speaker 5: which is kind of what the Fed wants to see.
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Speaker 5: They want to see demand come down a little bit.
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Speaker 5: So those are going to be perhaps the most interesting
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Speaker 5: things of the week that tell us something about what's
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Speaker 5: happening going forward. The GDP report will also give us
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Speaker 5: some idea of how the economy is holding up, and
3:34
Speaker 5: it's according to all the now casting ahead of time,
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Speaker 5: it's holding up much better than people thought, and that
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Speaker 5: may change some minds about in terms of economists forecasts
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Speaker 5: for what's going to happen. And if it comes in strong,
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Speaker 5: especially consumer spending, you could see an equity rally on
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Speaker 5: that basis, although you always have to discount the fact
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Speaker 5: that then the markets think, oh, they're going to raise
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Speaker 5: rates more. It would show that people are still spending money.
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Speaker 7: Yeah, and that personal consumption piece of the GDP last
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Speaker 7: time coming in quite you know, quite strong, holding up
4:08
Speaker 7: the overall number, and then revisions coming in higher as well.
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Speaker 8: I mean.
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Speaker 7: When you think about consumer spending, I mean the kind
4:18
Speaker 7: of notes we've been getting from earnings calls are like, hey,
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Speaker 7: we're seeing a wall, we're hitting a wall, and yet
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Speaker 7: the data seems to come in, you know, continually more
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Speaker 7: positive than anticipating.
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Speaker 5: Yeah, it all depends on the categories, the sectors that
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Speaker 5: people are spending money in, and how you define a wall.
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Speaker 5: If you had been seeing sales grow out of four
4:40
Speaker 5: or five percent rate and then they drop down to
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Speaker 5: two because the Fed's rate interest rates are higher, or
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Speaker 5: because the economy slows a little bit, that's okay. If
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Speaker 5: a wall means zero, and then of course what we've
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Speaker 5: got is a lot of retailers reporting and retail sales
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Speaker 5: numbers that have come out that are are weak or weaker,
5:02
Speaker 5: but we don't know what's bending in services has been like.
5:05
Speaker 5: And you know, you don't get earning supports from the
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Speaker 5: corner dry cleaner, So that's what we're going to be
5:12
Speaker 5: looking for.
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Speaker 3: How much is the FED looking at those earnings results?
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Speaker 5: They look at them, but the market isn't their primary concern.
5:20
Speaker 5: As long as the market as long as trades can happen,
5:23
Speaker 5: then their views stocks go up, stocks go down. So
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Speaker 5: obviously earnings impact asset values, and asset values are all
5:31
Speaker 5: part of inflation as well, So it's something they keep
5:34
Speaker 5: an eye on, but it's not something that drives their
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Speaker 5: decision making.
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Speaker 7: Yeah, we were just talking with Alexandra about you know,
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Speaker 7: one of our top headlines today, US recession becomes a
5:43
Speaker 7: closer call. As economists rethink forecasts, has the FED rethought
5:49
Speaker 7: its take on whether we do need to see thoroughly
5:53
Speaker 7: indicators move negative at least a shallow recession. Are you
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Speaker 7: getting any signals?
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Speaker 5: No, they've been pretty consistent. FED officials have all said
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Speaker 5: they don't think we need to have a recession, and
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Speaker 5: of course Chris Waller way out in front saying a
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Speaker 5: year ago that we could get by without a recession
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Speaker 5: and without seeing unemployment rise significantly. The FED staff has
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Speaker 5: consistently at the last three meetings forecast recession at the
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Speaker 5: end of the year. It will be interesting to see
6:22
Speaker 5: when we get the minutes of the meeting next week
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Speaker 5: three more weeks for that, whether the FED staff is
6:30
Speaker 5: still in the recession mode.
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Speaker 3: Yeah, okay, final question for you, McKee. We've got about
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Speaker 3: thirty seconds. Jeopardy here, final jeopardy here. How many data
6:39
Speaker 3: points do you think the FED needs to see that
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Speaker 3: look like last week with CPI and on farm payrolls
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Speaker 3: to justify an end.
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Speaker 5: Probably one or two more, depending on how much the
6:54
Speaker 5: numbers move. Yeah, if you've got a big drop. Then
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Speaker 5: maybe they start to feel good after one, but I
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Speaker 5: think they want to see two at least to give
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Speaker 5: them the idea that this is not going to turn
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Speaker 5: around immediately.
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Speaker 8: Yeah.
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Speaker 3: Yeah, A lot to monitor for them, because it's very confusing.
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Speaker 3: How much is going on out there with employment looking
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Speaker 3: great GDP stains drawn, and then you've got on the
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Speaker 3: other side of things, consumer spending starting to buckle a
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Speaker 3: little bit when it comes to the earnings picture. Michael McKee,
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Speaker 3: thank you so much as always.
7:24
Speaker 5: You know, I love to see you got to go
7:25
Speaker 5: out and spend so that we can save the acaus.
7:27
Speaker 3: Oh I'm spending. Don't worry, it's summer exactly, all right, guys,
7:30
Speaker 3: Thank you so much. Michael McKee. With us there.
7:34
Speaker 6: You're listening to the teenth Kenser Live program Bloomberg Markets
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7:48
Speaker 3: We are going to cover some mildly breaking news from
7:51
Speaker 3: this morning. We got the trial date for Donald Trump's
7:55
Speaker 3: classified documents trial, that date being May twentieth of twenty
7:58
Speaker 3: twenty four, So we have a fantastic guest in the
8:02
Speaker 3: studio with us. If Paul were here, he'd say, you
8:04
Speaker 3: get extra credit. Wendy. This is Wendy Schiller. She is
8:07
Speaker 3: a professor at Brown University and can talk all things
8:11
Speaker 3: politics with us. So, Wendy, thanks for coming in this
8:14
Speaker 3: May twentieth date. It feels to me like this is
8:17
Speaker 3: bad news for the Justice Department, who wanted December, and
8:21
Speaker 3: bad news for the Trump camp, who wanted it to
8:23
Speaker 3: be after the November election. So how are you digesting
8:28
Speaker 3: that date and is it good news for anyone?
8:31
Speaker 9: Well, I'm not sure the judge split the difference, but
8:33
Speaker 9: if both parties are unhappy, that probably is a good
8:36
Speaker 9: thing in terms of how the decision was made. The
8:39
Speaker 9: primary season will be essentially settled by then. You know,
8:42
Speaker 9: the primary calendar is out now, with some states unsettled
8:45
Speaker 9: New Hampshire for the Democrats, for example. But nonetheless, you know,
8:48
Speaker 9: we'll know whether Trump is likely to be the nominee
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Speaker 9: by May of twenty twenty four. It will shape the
8:55
Speaker 9: campaign itself because if the nominee is decided, we think
8:59
Speaker 9: it's probably gonna be Biden and we think it may
9:01
Speaker 9: be Trump, then the American public's attention is on this trial,
9:05
Speaker 9: and so it will galvanize Trump supporters, but it might
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Speaker 9: also continue to give independent voters who are absolutely crucial
9:10
Speaker 9: in twenty twenty four more pause about voting for the
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Speaker 9: Republican nominee from president. And so that's how do the
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Speaker 9: Republicans get around that they're gonna want to mobilize their
9:20
Speaker 9: based for congressional elections and the presidential election. But how
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Speaker 9: do you actually get those voters who have rejected Trump
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Speaker 9: for three elections in a row now to.
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Speaker 1: Come back in the middle of a trial.
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Speaker 7: Yeah, how do the Republican challengers, the Ron DeSantis, the
9:33
Speaker 7: Nicki Haleys of the world, how do they play this?
9:36
Speaker 7: Considering that you know the primary season is going to
9:38
Speaker 7: be largely over.
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Speaker 9: Well, I think they have to worry about August twenty third,
9:42
Speaker 9: tom more, you know, the first debate. You know, if
9:44
Speaker 9: Trump shows up, then they get to attack him directly,
9:47
Speaker 9: and we've seen them to be reluctant to do that.
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Speaker 1: They're dancing around it.
9:51
Speaker 9: But Trump showed in twenty sixteen that if you take
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Speaker 9: your opponent's head on and you show no mercy, you
9:57
Speaker 9: will do better. With the Republican primary voting base, So
10:00
Speaker 9: they have to worry about how to get attention from
10:02
Speaker 9: now until December, and then if Trump is not on
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Speaker 9: that debate stage, who's going to watch it? So I
10:08
Speaker 9: think their problem is momentum. And the other thing is,
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Speaker 9: of course the January sixth trial shoe, When does that drop?
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Speaker 9: And how do we manage in terms of our justice
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Speaker 9: system these two very important federal trials.
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Speaker 7: Yeah, certainly a race for all these trials moving forward,
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Speaker 7: which one gets the most attention first? But I mean,
10:25
Speaker 7: you know you say that, you know, Trump showed the
10:29
Speaker 7: success of going out there being very fourth right, But
10:32
Speaker 7: criticizing Trump has been a negative for lots of politicians
10:37
Speaker 7: over the past several years. Is there any signs that
10:40
Speaker 7: that's starting to change.
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Speaker 9: Well, a very famous now long gone Clark Clifford political advisor,
10:46
Speaker 9: started out with Harry Truman said, you can't beat somebody
10:48
Speaker 9: with nobody. You have to actually present the alternatives, say
10:52
Speaker 9: this guy can't win, I can win. Don't you want
10:55
Speaker 9: to be a winner? Trump has sold himself on being
10:57
Speaker 9: a winner, and the problem is now he has tagged
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Speaker 9: Ron DeSantis, I think his closest best funded challenger as
11:03
Speaker 9: a loser, even though I got re elected by massive
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Speaker 9: numbers in Florida and supposedly so popular there. So Trump
11:09
Speaker 9: is just winning the pr war exactly someone as you say,
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Speaker 9: And if you're not Chris Christie, who just doesn't care
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Speaker 9: and is going.
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Speaker 1: After him, you lose that war. Before you get on
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Speaker 1: the stage, you have to show Republican voters you're willing
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Speaker 1: to fight.
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Speaker 9: One of the things that keeps these voters loyal to
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Speaker 9: Trump is that he has always been willing to fight
11:25
Speaker 9: theoretically for them, but also for himself. And that's a
11:28
Speaker 9: trait that seems to have really resonated and is sticking
11:31
Speaker 9: with them. So if you can't show that you're willing
11:33
Speaker 9: to do that on a debate stage with not that
11:34
Speaker 9: much to lose, I'm not sure how you ever pull
11:37
Speaker 9: like the nine percent of that Trump base they're going
11:39
Speaker 9: to need to win the primers.
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Speaker 3: Well, and you mentioned desand this as well. Why is
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Speaker 3: he struggling so much at the start of his campaign?
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Speaker 1: You think Massin that is you know political observer question.
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Speaker 9: If we were talking six months ago, a year ago,
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Speaker 9: it was that this guy is clearly at one.
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Speaker 1: Hundred and ten million dollars.
11:53
Speaker 9: Yeah, he's a lovely family, really, you know, no scandals
11:57
Speaker 9: that we can think of, you know, young he would
11:59
Speaker 9: be the ready made candidate, and he's just stumbled and stumbled.
12:03
Speaker 1: And the problem is that he.
12:04
Speaker 9: Doesn't seem to be connecting with voters on the campaign trail,
12:08
Speaker 9: voted and primaries are retail politics. So if you don't
12:11
Speaker 9: connect over in a large arena, you don't connect on
12:13
Speaker 9: television or media, and then you don't connect in person,
12:17
Speaker 9: there's no reason to switch your allegiance.
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Speaker 1: And I think that's his big problem. And how you
12:20
Speaker 1: get over that, that's you know.
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Speaker 9: You need a lot of pr training. I'm not quite sure.
12:25
Speaker 9: It's whether the Republicans want to win. And there are
12:28
Speaker 9: enough Republicans, by the way, in the Republican primary base
12:31
Speaker 9: that if they all chose to go with somebody else,
12:34
Speaker 9: Donald Trump would not be the nominator.
12:36
Speaker 7: Well, I guess the idea with the Santas and the
12:38
Speaker 7: appeal for the conservative voting base has been that he's
12:42
Speaker 7: essentially Trump, but he knows how to play the system.
12:44
Speaker 7: And when you look at you know, some of the
12:46
Speaker 7: plans that Trump has come out with recently to target migrants,
12:50
Speaker 7: bureaucrats as well as ramp up his China, his push
12:57
Speaker 7: back towards some of the policies in China. I mean,
13:00
Speaker 7: a lot of the things specifically on the domestic side
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Speaker 7: that he's suggesting not necessarily going to get past the
13:06
Speaker 7: courts or Congress, etc. Does anyone care on the Republican insider.
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Speaker 9: Yeah, I mean, you know, first of all, one thing
13:15
Speaker 9: we have to think about is Trump is the incumbent, right.
13:17
Speaker 9: I mean, he's not in office, he is not. He's
13:19
Speaker 9: former President Trump. But to the Republicans who voted for
13:22
Speaker 9: him and loyal to him, he's still the incumbent Kennedy
13:24
Speaker 9: incumbent president. So if you're not voting for him, you're
13:27
Speaker 9: sort of disloyal rights, like voting against Jimmy Carter or
13:30
Speaker 9: George Herbert or her Bush when they were challenging the primaries.
13:33
Speaker 9: So that's a psychological hit, right, how do you get
13:35
Speaker 9: over that challenge? And the second thing is Trump focuses
13:38
Speaker 9: on things that matter economically to a wide birth of people,
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Speaker 9: Tariffs China, the loss of jobs of the last twenty
13:45
Speaker 9: five years because of our free trade policies, for example.
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Speaker 9: He continues to do that, whereas DeSantis chose really social
13:52
Speaker 9: not narrow but social issues in Florida. So how many
13:55
Speaker 9: people care about sort of what you're reading in a
13:57
Speaker 9: textbook in Florida? How many people care about what you
13:59
Speaker 9: can do in Florida. Whereas Trump has the opportunity to
14:02
Speaker 9: say I was tough on China internationally, and I'm going
14:06
Speaker 9: after all the things that matter to you in Iowa,
14:08
Speaker 9: into Michigan, into Pennsylvania and Nevada. So this is the
14:11
Speaker 9: advantage Trump has and it's a big one over DeSantis
14:15
Speaker 9: right now. So that's I think the sort of the
14:17
Speaker 9: big gulf between the two of them. No matter what
14:20
Speaker 9: Desanta says about what he does internationally, Trump can say
14:23
Speaker 9: I did.
14:23
Speaker 4: That right, right.
14:24
Speaker 3: And it's interesting because I was covering the Desantas campaign
14:27
Speaker 3: for the mid terms down in Miami and went to
14:30
Speaker 3: one of his events, and he doesn't want to shake hands,
14:33
Speaker 3: like it's the most simple things that you have to
14:35
Speaker 3: do on the campaign trail as a candidate that he's
14:38
Speaker 3: not necessarily willing to engage in. And that feels like
14:40
Speaker 3: the thing that Trump is so good at when it
14:43
Speaker 3: comes to engaging with voters.
14:45
Speaker 1: And Trump is also I mean, Mason, that's a really
14:47
Speaker 1: great point.
14:48
Speaker 9: And the other thing that Trump has been good at
14:50
Speaker 9: as many people as he alienates.
14:52
Speaker 1: He also appeals particularly in Florida.
14:54
Speaker 9: And you can say more about this because you were there,
14:56
Speaker 9: is that there's a bunch of people who are now
14:58
Speaker 9: foreign warm naturalized citizens from a lot, lot of countries
15:00
Speaker 9: in Latin America who are used to strong leaders, who
15:03
Speaker 9: like that type of leadership and may not be as
15:05
Speaker 9: liberal on social policies as the Democrats are used to
15:08
Speaker 9: thinking about particular LATINX voters. So Trump did better in
15:11
Speaker 9: Florida amongst the whole people in Miami Dade, for example,
15:15
Speaker 9: and Biden did worse. And that's a scary proposition for
15:18
Speaker 9: the Democrats nation. Why I particularly you think about Nevada
15:20
Speaker 9: and to give us some other states that they need
15:22
Speaker 9: to Arizona that they need to really hold. And there's
15:26
Speaker 9: where Trump also understands that people are not monolithic based
15:29
Speaker 9: on whatever their background is.
15:31
Speaker 1: And DeSantis has nothing to offer.
15:32
Speaker 9: These voters to say I'll be better or even in
15:36
Speaker 9: my persona that I'm going to remind you of the
15:38
Speaker 9: way it was when there was order instability. Sometimes I
15:41
Speaker 9: have trouble with this idea because if they left their
15:43
Speaker 9: home countries, there must have been something wrong with that,
15:45
Speaker 9: so we have to think about that. But this is
15:47
Speaker 9: a looming issue for the Democrats that I think they're
15:49
Speaker 9: not quite on top of right now.
15:51
Speaker 7: Yeah, let's turn this to the Democratic side though, because
15:53
Speaker 7: we had the news that an FBI document with purportedly
15:58
Speaker 7: then according to the GOPF evidence of bribes paid by
16:01
Speaker 7: Ukrainian businessmen to President Joe Biden and his son Hunter, well,
16:04
Speaker 7: apparently it's not as clear as Republican lawmakers have portrayed it.
16:08
Speaker 7: Is this the end of this frenzy of headlines and
16:14
Speaker 7: news about this purported issue, these potential bribes.
16:18
Speaker 9: You know, difficult relatives have been around in American politics
16:21
Speaker 9: for a long time for presidents. I mean, I'm old
16:23
Speaker 9: enough to remember Billy Carter and way before your time.
16:26
Speaker 9: But he caused Jimmy Carter a lot of problems. Hunter
16:29
Speaker 9: Biden in the end of the day may be prosecuted
16:32
Speaker 9: or indicted or alleged to other crimes, and he may,
16:35
Speaker 9: you know, have to, you know, do another plead deal.
16:37
Speaker 9: We have no idea, but there's no evidence that we
16:40
Speaker 9: can see right now that ties any of this to
16:43
Speaker 9: Joe Biden, And so I think that's a big hill
16:46
Speaker 9: to climb.
16:46
Speaker 1: For the Republican Party.
16:47
Speaker 9: People may not love Joe Biden, but I don't think
16:50
Speaker 9: it's a inclination to think that he's super corrupt among
16:53
Speaker 9: independent voters and the Democrats. And so the independent voters
16:56
Speaker 9: are just key in all these swing states.
16:58
Speaker 1: And if you can't.
16:58
Speaker 9: Get them over to believe that, they can believe the
17:00
Speaker 9: sun went astray, but to have them believe this is
17:03
Speaker 9: going to take a lot. And if you focus everything
17:06
Speaker 9: on that, I think then the Democrats bring up January
17:09
Speaker 9: sixth over and over and over again, and that's direct
17:11
Speaker 9: allegation against president former President Trump.
17:14
Speaker 3: Right, We're going to have to bring you back on
17:16
Speaker 3: to talk more about Biden and Biden nomics as well,
17:18
Speaker 3: because I was hoping to get your take on how
17:20
Speaker 3: that's playing with voters. Wendy, thank you so much for
17:23
Speaker 3: joining us today. This is Wendy Schiller. You're hearing a
17:25
Speaker 3: professor at Brown University political expert here. Really great to
17:29
Speaker 3: get your take, so we appreciate it.
17:31
Speaker 6: You're listening to the Take cans Our Live program Bloomberg
17:34
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the
17:38
Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business app.
17:41
Speaker 6: You can also listen live on Amazon Alexa from our
17:44
Speaker 6: flagship New York station. Just say Alexa playing Bloomberg eleven thirty.
17:50
Speaker 7: Turn back a little bit to the earnings a picture,
17:53
Speaker 7: because we did have Blackstone earnings coming out yesterday, we
17:56
Speaker 7: had Blackrock earnings about a week before, and we want
18:00
Speaker 7: to get the latest on this with Kathy Seaffert. She's
18:03
Speaker 7: the director of research at CFRA. She has it by
18:07
Speaker 7: rating on both of these names. Kathy, let's start with Blackstone.
18:12
Speaker 7: You know, the picture kind of mixed here.
18:13
Speaker 1: What was your takeaway?
18:16
Speaker 4: The picture was mixed, But I think we're starting to
18:19
Speaker 4: see signs, encouraging signs. I mean, granted, coming out of
18:22
Speaker 4: the pandemic, most of these companies in the asset management
18:26
Speaker 4: space are going to have some tough comps after a
18:30
Speaker 4: strong post pandemic recovery. But in the case of Blackstone,
18:34
Speaker 4: I mean, the shares are up over forty percent this
18:37
Speaker 4: year because they weakened late in twenty twenty two on
18:41
Speaker 4: news that the company was starting to put a ban
18:45
Speaker 4: on redemptions in the real estate space. So, I mean,
18:48
Speaker 4: there's a lot of moving parts here, but I think
18:51
Speaker 4: bottom line, I think the stock is poised to outperform,
18:55
Speaker 4: largely because there's still a positive secular growth story here
18:59
Speaker 4: in the demand and for private credit, private equity assets,
19:05
Speaker 4: assets that are not correlated to the broader market. I
19:09
Speaker 4: think the thing that we need to see, and it'll
19:12
Speaker 4: help a lot of other companies in this sector, is
19:16
Speaker 4: the capital markets activity to improve so that private equity
19:20
Speaker 4: firms can increase realizations, which would help their top line,
19:26
Speaker 4: and that'll also help the ibanks as well.
19:28
Speaker 3: Do you think private credit is still the big winner
19:30
Speaker 3: for these asset managers?
19:33
Speaker 4: There is still I also follow the insurance companies, so
19:36
Speaker 4: I sort of see the demand curve for this, and
19:39
Speaker 4: there is still a fair amount of demand for private credit.
19:43
Speaker 4: I think one of the trends to be looking for
19:46
Speaker 4: is kind of the democratization of these products, as private
19:50
Speaker 4: equity firms seek to build out a suite of products
19:55
Speaker 4: aimed at not just the ultra high net worth, but
19:58
Speaker 4: high net worth individual So I think that to a
20:01
Speaker 4: degree will also help fuel some of the demand. Insurance
20:06
Speaker 4: companies are still increasing their allocation to private credits, so yeah,
20:12
Speaker 4: I do think that the demand curved, they're still fairly attractive.
20:16
Speaker 10: Yeah.
20:16
Speaker 7: One of the things overall. I mean, maybe this demand
20:19
Speaker 7: for private credit continues, but Blackstone generally finding it hard
20:23
Speaker 7: to raise new funds. They raise seventeen billion dollars in
20:27
Speaker 7: the second quarter. That was down seventy seven percent on
20:30
Speaker 7: a year on year basis. Maybe that wasn't unexpected, but like,
20:34
Speaker 7: why are they finding it so challenging to raise these
20:37
Speaker 7: funds right now?
20:39
Speaker 4: Well, I mean this is also coming off, as I said,
20:42
Speaker 4: a really strong fundraising year after the pandemic, So there
20:46
Speaker 4: are tough comparables there, and I think, you know, I
20:49
Speaker 4: think the environment, given the velocity of interest rate changes,
20:55
Speaker 4: you know, brought on by the FED, I think it
20:57
Speaker 4: was difficult for a number of firms to make commitments.
21:00
Speaker 4: So my senses that things will pick up once the
21:03
Speaker 4: interest rate environment, you know, settles down a little. I
21:07
Speaker 4: think it's also important to remember that if you look
21:09
Speaker 4: across the asset management space, private equity firms and the
21:14
Speaker 4: likes of black Raw continue to grow organically, i e.
21:17
Speaker 4: They continue to bring in new business. There are a
21:19
Speaker 4: lot of asset management firms that don't, and they're bleeding assets.
21:24
Speaker 4: So I think it's also important that, yes, while it's
21:27
Speaker 4: down from a really strong you know, couple of years previously.
21:32
Speaker 4: It still represents organic growth, which is which is significant
21:36
Speaker 4: because once you get some market performance, you get dual
21:40
Speaker 4: catalysts of organic growth and the tailwind of asset appreciation.
21:45
Speaker 3: Well, one of the headwinds is the slowdown in deal making,
21:48
Speaker 3: as you know Microsoft activision. Notwithstanding there, how big of
21:54
Speaker 3: a headwind is the challenging deal making market that we're
21:58
Speaker 3: currently in right now for these firms.
22:01
Speaker 4: Well, I mean, not to make a plumbing analogy, but
22:04
Speaker 4: it's kind of like the pipeline is sort of backed
22:07
Speaker 4: up a little bit, and you know, if you look
22:08
Speaker 4: at sort of the fund inflows and outflows in private equity,
22:13
Speaker 4: at some point you need to start realizing some profits
22:18
Speaker 4: on these assets, particularly as you know, some of these
22:22
Speaker 4: funds have set you know, targeted expiration dates. It's difficult
22:28
Speaker 4: if you're not realizing gains on those assets. I mean,
22:31
Speaker 4: what we're seeing in a lot of the private equity
22:34
Speaker 4: firms is they are deploying capital. And I think at
22:38
Speaker 4: some point, and John Gray talked about this on the
22:40
Speaker 4: Blackstone call that he's that you know, as the year progresses,
22:46
Speaker 4: the capital markets activity should pick up and that should
22:49
Speaker 4: help the pipeline which ultimately helps top the top line
22:53
Speaker 4: at private equity firms like Blackstone.
22:56
Speaker 1: Canny talk to me a little bit about Blackrock.
22:59
Speaker 7: It seems like flows into their long term products widely
23:04
Speaker 7: missed analyst expectations. I mean, is this the same flavor
23:09
Speaker 7: of issue that we were seeing at Blackstone to.
23:13
Speaker 4: A degree, yes, I mean I still the fact that
23:17
Speaker 4: they continue to have organic growth that's sort of at
23:20
Speaker 4: the top of the heat for traditional asset managers. That's key.
23:25
Speaker 8: The fact that.
23:26
Speaker 4: They have a Laddin their technology business, that's key, although
23:31
Speaker 4: quite frankly, Silicon Valley Bank was reported to be in
23:35
Speaker 4: a Laddin client, so that was a little bit of
23:38
Speaker 4: a black eye. We didn't hear anything about that on
23:40
Speaker 4: the call. But again it's a function of some tough
23:45
Speaker 4: comparables coming out of the pandemic. I also see black
23:49
Speaker 4: Rock at a little bit of an inflection point. You know,
23:52
Speaker 4: they dominate in ETFs, they have a strong fixed income franchise.
23:57
Speaker 4: Where they don't have a big presence is in alternatives,
24:00
Speaker 4: private credit things like that, and so I see them
24:05
Speaker 4: gradually building out that business, likely through acquisitions, although I
24:10
Speaker 4: don't see them making blockbuster deals. I see sort of
24:14
Speaker 4: a bunch of sort of smaller incremental deals. I do
24:18
Speaker 4: still like the franchise, though.
24:20
Speaker 7: Yeah, I mean, one of the questions has been what
24:23
Speaker 7: happens when Larry Fink kind of steps back. We only
24:26
Speaker 7: have about a minute here. Give me your thoughts. How
24:29
Speaker 7: close are we to even getting a name of a successor?
24:33
Speaker 4: You know, this is the game that we play with
24:35
Speaker 4: Berkshire Hathaway. I follow Berkshire Hathaway, and this is the
24:38
Speaker 4: game everyone likes to play. Bottom line, I think the
24:41
Speaker 4: bench at Blackrock is deep enough that investors do not
24:46
Speaker 4: need to worry about the future of black Rock after
24:49
Speaker 4: Larry Fink.
24:51
Speaker 7: Very interesting, He's such a personality, you know, he's I
24:55
Speaker 7: mean that said. Blackrock is a big organization, and folks,
25:00
Speaker 7: you know, we look at Blackstone has been able to
25:01
Speaker 7: move on, have been able to establish a new top dog,
25:06
Speaker 7: even after our founder Steve Swartzman steps away, right.
25:10
Speaker 3: Right, Yeah, It's really interesting to continue to monitor kind
25:12
Speaker 3: of these big name guys on Wall Street that continued
25:16
Speaker 3: to just have such a huge impact on the overall
25:19
Speaker 3: market and sentiment traders really hanging onto every word that
25:22
Speaker 3: they say, especially given just the volatility and confusing nature
25:27
Speaker 3: of the market that we are currently in simone.
25:30
Speaker 6: You're listening to the team Ken's a live program Bloomberg
25:34
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot Com,
25:37
Speaker 6: the iHeartRadio app, and the Bloomberg Business App, or listen
25:40
Speaker 6: on demand wherever you get your podcasts.
25:44
Speaker 3: The outlook in bullish calls. We've got a great guest
25:47
Speaker 3: on here. We've got Gina Bulvin, the president of Bulvin
25:50
Speaker 3: Wealth Management, coming on and Gina had a bullish call
25:54
Speaker 3: in January about fifteen percent rise in the S and
25:56
Speaker 3: P five hundred, one of the only strategists that we
25:59
Speaker 3: were having having on at the time with a bullish call,
26:01
Speaker 3: so really excited to chat with her. Gina, thank you
26:04
Speaker 3: so much for joining us on this Friday. As we
26:07
Speaker 3: were just talking about with Alex, typically a good first
26:10
Speaker 3: half of the year can lead to a good second
26:13
Speaker 3: half of the year as well. Given the bullish call
26:16
Speaker 3: that you had back in January, are you still bullish
26:19
Speaker 3: for the second half of the year.
26:22
Speaker 8: So I am, first of all, thanks for having me
26:24
Speaker 8: back on, and you're right.
26:26
Speaker 11: In January, I came on and I said the market
26:29
Speaker 11: was going to be fifteen percent by the end of
26:31
Speaker 11: the year, although I thought it would take all year
26:34
Speaker 11: to get there. We had thought the second half was
26:37
Speaker 11: going to drive most of the games, and it was
26:40
Speaker 11: really the first half, which goes to why I tell
26:43
Speaker 11: clients that you cannot time the market. We are bullish, however,
26:48
Speaker 11: and we do think that this is a strong, confirmed
26:53
Speaker 11: bull market. However, we think that this young bull market
26:57
Speaker 11: is due for a pause. You know, we've come so
27:00
Speaker 11: far so fast, and even healthy bowl markets have corrections.
27:06
Speaker 11: An average correction might be twelve to thirteen percent. But
27:10
Speaker 11: we still think twelve months, eighteen months out from now,
27:14
Speaker 11: we think the market will be higher than where we
27:16
Speaker 11: are now.
27:17
Speaker 7: Yeah, I mean describe to me how that pause happens.
27:21
Speaker 7: What does it look like. Which names are going to
27:25
Speaker 7: be in focus? Is it the tech names that have
27:27
Speaker 7: had this incredible rally and been leading this stock market higher?
27:34
Speaker 8: Yeah, that's exactly right.
27:36
Speaker 11: You know, we're expecting our technology to take a pause.
27:40
Speaker 11: And what's going on today at the four o'clock today,
27:44
Speaker 11: the NASDA one hundred is going to rebalance, and we're
27:47
Speaker 11: going to see those top five names microso off to Amazon, Apple,
27:53
Speaker 11: Alphabet and Video. Those waitings are going to be taking
27:58
Speaker 11: from forty three percent to the Nasdaq one hundred down
28:02
Speaker 11: to thirty eight percent. So that's going to cause some
28:05
Speaker 11: volatility and there's a very high bar to clear because
28:09
Speaker 11: of those stocks and the whole tech tech sector has
28:14
Speaker 11: done so well. But the bet isn't out of the
28:18
Speaker 11: The bet isn't out of the way either.
28:20
Speaker 1: That's right.
28:20
Speaker 7: But this options expiration, like, how much of an impact
28:24
Speaker 7: does that have is because it seems sort of an
28:26
Speaker 7: idiosyncratic on some degree. Does that permanently change the mood
28:31
Speaker 7: in any of these big names?
28:33
Speaker 11: Not not really, you know, you know, we're really looking
28:37
Speaker 11: at you know, where we're going to be more longer term,
28:41
Speaker 11: even twelve months for now, and once a bull market
28:45
Speaker 11: is confirmed, the average return is nineteen percent twelve months out,
28:52
Speaker 11: so we and the average bull market is five years.
28:57
Speaker 11: So we think that this market has legs and it's
29:00
Speaker 11: going to continue. But short short term that could be
29:04
Speaker 11: a pullback. And you know, next week is a big
29:06
Speaker 11: week with the Fed as well. He's expected to raise
29:09
Speaker 11: rates by a quarter of a point. It'll be interesting
29:13
Speaker 11: to see his comments in how hawkish.
29:17
Speaker 8: He is.
29:19
Speaker 3: Well as he usually does, I feel like he leaves
29:22
Speaker 3: himself open to the totality of the data and gives
29:26
Speaker 3: himself a little bit of flexibility there. Having said that, though,
29:29
Speaker 3: I'm really interested in your recession call as it relates
29:32
Speaker 3: to market sentiment. Because the Dow posting nine day winning
29:37
Speaker 3: street twenty five times since nineteen fifty, only three of
29:40
Speaker 3: those streaks happened within a recession year. Where do you
29:44
Speaker 3: see evidence of a recession? Given the technicals of the
29:47
Speaker 3: market and what we're seeing in the economy.
29:50
Speaker 11: We actually think that the odds of a soft landing
29:53
Speaker 11: give increased, and the consumer has really you know, the
29:58
Speaker 11: consumer is seventy percent of the economy and the consumer
30:02
Speaker 11: is still spending.
30:03
Speaker 8: I think earlier in the year, a lot of people.
30:07
Speaker 11: Predicted that the consumer would you know, rein it in
30:10
Speaker 11: a little bit more because inflation was so high. Many
30:14
Speaker 11: strategists talk about fomo fear of missing out in the market,
30:19
Speaker 11: and I'm really focused on YOLO. The consumer has been
30:24
Speaker 11: underestimated because COVID. COVID has given them that YOLO you
30:31
Speaker 11: only live once mentality, and they are continuing to spend.
30:35
Speaker 11: A recession could be likely, but that doesn't necessarily mean
30:40
Speaker 11: the stock.
30:40
Speaker 8: Market's going to go down once.
30:42
Speaker 11: A recession is called or we know we're in a recession,
30:47
Speaker 11: the market usually rallies because the market's forward looking. If
30:51
Speaker 11: we do have a recession, we do think it'll be mild,
30:55
Speaker 11: but it's really going to be based on you know,
30:58
Speaker 11: the labor market as well, and that's something to keep
31:01
Speaker 11: an eye on.
31:02
Speaker 7: Yeah, and we get data around that as well next week. Okay,
31:06
Speaker 7: So if this bull market is due for a pause,
31:08
Speaker 7: where do you hide out in equities right now?
31:12
Speaker 8: Well, I don't know that you hide out.
31:13
Speaker 11: You know, we were a little neutral on technology, we
31:17
Speaker 11: were overweighted. We went from overweight to neutral on tech.
31:20
Speaker 11: And we do like industrials right now, there's a great
31:25
Speaker 11: offshoring trend that looks very attractive. We also like medical devices,
31:31
Speaker 11: and you know, you might want to start looking at
31:35
Speaker 11: small caps and mid cap stocks. I think it's a
31:38
Speaker 11: little early, but they haven't done they haven't done that much.
31:43
Speaker 11: And that's where we're at right now.
31:46
Speaker 3: When you think about small caps and mid caps, what
31:49
Speaker 3: are you looking at to determine which kind of secondary
31:52
Speaker 3: plays are going to be the most successful and effective.
31:57
Speaker 11: Well, small cap stocks are very economically sensitive, and as
32:03
Speaker 11: we head out of a recession, they generally tend to lead,
32:07
Speaker 11: So that's something that you would want to keep an
32:09
Speaker 11: eye on.
32:11
Speaker 3: And in the moment that we're in right now too,
32:13
Speaker 3: I'm curious, do you think that we're about to enter
32:15
Speaker 3: kind of an era of dividend plays? Is that going
32:18
Speaker 3: to be the move moving forward?
32:21
Speaker 11: Well, that goes more to value stocks, and I do
32:25
Speaker 11: think that growth stocks will continue to do well, and
32:29
Speaker 11: I would tell investors to have a Barbelle approach, to
32:33
Speaker 11: have some growth stocks and some value stocks, some dividend plays.
32:38
Speaker 11: But also keep in mind that you know, as rates
32:41
Speaker 11: are so high interest rates that this is going to
32:45
Speaker 11: be good for fixed income investors, and now you're going
32:49
Speaker 11: to be able to get a higher yield off money
32:51
Speaker 11: market accounts and bonds could do well, so you could
32:55
Speaker 11: also get how you yields through fixed income with less
32:59
Speaker 11: of a risk than investing in stocks.
33:02
Speaker 7: Let's turn back to the consumer for a moment, because
33:05
Speaker 7: I've had my eye on a bunch of consumer oriented
33:07
Speaker 7: earnings and we've been talking about how that is such
33:10
Speaker 7: an important piece of the economy. Take me through a
33:15
Speaker 7: we have this potential for just some weakness that we've
33:18
Speaker 7: seen trading down, maybe not buying as much from some
33:21
Speaker 7: of the you know, consumer packaged goods side. At the
33:24
Speaker 7: same time, we've got travel where Delta and the like
33:27
Speaker 7: are still seeing this enormous demand, especially for international travel.
33:32
Speaker 7: Where is the consumer now. Is this a bifurcated sort
33:36
Speaker 7: of high high income low income situation?
33:41
Speaker 11: Absolutely, And but you know, and that had set that
33:46
Speaker 11: segues right into inflation. Right the lower end consumer is
33:51
Speaker 11: hit more with inflation, they feel it more.
33:56
Speaker 8: But we expect and one.
33:58
Speaker 11: Of the reasons why we continue to be bullish is
34:01
Speaker 11: we expect inflation to be at a three handle by
34:04
Speaker 11: the end of the year and that is really going
34:07
Speaker 11: to help the lower end consumer and that's going to
34:13
Speaker 11: help them spend more. You know, we are starting to
34:16
Speaker 11: see inflation come down. The reason we think it's going
34:19
Speaker 11: to be down by the end of the year is
34:21
Speaker 11: we had a blowout housing number. We are multifamily houses
34:27
Speaker 11: building permits for multi family housings is booming. We haven't
34:31
Speaker 11: seen this type of activity in decades. When this supply
34:36
Speaker 11: comes to the market at the end of the year,
34:38
Speaker 11: that's going to put a downward pressure on rents and
34:41
Speaker 11: that's the majority of CPI and that's why consumers are
34:47
Speaker 11: going to continue to spend. We're going to see rents
34:50
Speaker 11: coming down, inflation coming down, and they're going to have
34:54
Speaker 11: more money in their wallets. It's also because the job
34:57
Speaker 11: market has been so resilient, right and so strong, and
35:01
Speaker 11: when consumers have jobs, they will continue to spend.
35:05
Speaker 3: Yeah, we continue to see that strength in both the
35:07
Speaker 3: labor market and with great wages as well. Gina, thank
35:11
Speaker 3: you so much for joining us. That was Gina Bolvin
35:14
Speaker 3: with Bolven Wealth Management.
35:16
Speaker 6: You're listening to the tape cans Are Live program Bloomberg
35:19
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the
35:23
Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
35:26
Speaker 6: You can also listen live on Amazon Alexa from our
35:29
Speaker 6: flagship New York station. Just say Alexa, play Bloomberg eleven thirty.
35:34
Speaker 7: Let's first, let's change gears. Get to Evangelos Momios. He's
35:38
Speaker 7: an equity analyst with Bloomberg Intelligence, because we have some
35:42
Speaker 7: big news from the credit card companies today, AMEX American
35:45
Speaker 7: Express revenue missing estimates, card spending growth slowing. Evangelists, what
35:51
Speaker 7: exactly is happening here? Is this all just weakness around
35:55
Speaker 7: the consumer, or is this something more fundamental to American expressesness.
36:02
Speaker 10: Yes, like you know, the Misston revenue, but revenue expectations
36:07
Speaker 10: where somewhat inflated.
36:08
Speaker 12: The revenue still grew quarter over quarter, so the US.
36:14
Speaker 10: Consumer conceits, continues to spend and continues to use his
36:19
Speaker 10: or her credit cards. Delinquencies across the ward, not only
36:24
Speaker 10: for American Express but also for those that cater to
36:29
Speaker 10: lower credit profile customers like Capital One, Discover and so forth.
36:35
Speaker 12: Delinquency rates have been growing up.
36:37
Speaker 10: They have been normalizing from very good levels post pandemic.
36:43
Speaker 10: But the big stories are that the growth is still
36:47
Speaker 10: robot albeit a little lower than last year. The linquencies
36:53
Speaker 10: start going up, but in a you know, control sort
36:57
Speaker 10: of fashion, had charge of those are credit losses are
37:02
Speaker 10: also following the same path as the liquids with the delay.
37:07
Speaker 10: So overall, probably more about inflated expectations and less about
37:12
Speaker 10: any huge negative surprise from the credit card.
37:16
Speaker 12: Lenders to this quarter.
37:18
Speaker 3: Well, talk to me about those delinquencies specifically, where are
37:21
Speaker 3: we seeing the most pain for consumers there?
37:25
Speaker 10: Yeah, So the interesting point is that the linquincy rate
37:29
Speaker 10: in the second quarter, as I said, went up, they
37:35
Speaker 10: went up less than they did in the first quarter
37:39
Speaker 10: or what that word. We don't have the exact breakdown
37:44
Speaker 10: by five of stratification, but what they do tell us
37:50
Speaker 10: is that what the companies tell us is that people
37:53
Speaker 10: on the lower end of the five le tiers are
37:57
Speaker 10: being more delinquent in their payments than those at the higher.
38:03
Speaker 12: Level of the five poor tier.
38:05
Speaker 10: And that's also evident when one compares the numbers between
38:10
Speaker 10: those that focus again on higher risk profile customers like
38:15
Speaker 10: Synchrony Financial, those that focus on prime super prime customers
38:20
Speaker 10: like American Express.
38:23
Speaker 7: How long do the executives of American Express and others,
38:27
Speaker 7: how long do they see some of this weakness, especially
38:31
Speaker 7: amongst the lower end consumers. How do they see that lasting.
38:36
Speaker 10: It's very difficult to predict, but what we can say
38:40
Speaker 10: if we look at longer periods is that generally for
38:45
Speaker 10: delinquencies to continue to increase, you will have to have
38:49
Speaker 10: some deterioration in the employment situation, and unemployment rate remains
38:56
Speaker 10: very low. So most of those executives on their conference goals,
39:01
Speaker 10: they will tell you that we cannot predict the market,
39:05
Speaker 10: that the economy, that we have to be ready, so
39:09
Speaker 10: they're basically enough reserves ahead of that potential development, but
39:13
Speaker 10: so far the consumer is holding up better than expected,
39:19
Speaker 10: although as I said, it's a situation.
39:22
Speaker 12: That is normalizing from prior to years.
39:26
Speaker 3: Well, even though the consumer is holding up better than expected,
39:28
Speaker 3: we're still I mean, it's just it's such a weird
39:31
Speaker 3: vibe right now out there because there's so much good
39:34
Speaker 3: news and bad news all the time, and one of
39:36
Speaker 3: the pieces of bad news is obviously in the commercial
39:39
Speaker 3: real estate space. To what extent do you see in
39:42
Speaker 3: your research that investors are kind of scrutinizing Capital One,
39:48
Speaker 3: other banks and credit companies due to consumer commercial real
39:54
Speaker 3: estate exposure.
39:56
Speaker 10: Yeah, like you insinuated in your question, this is more
39:59
Speaker 10: of a bad issue and less of a credit card issue.
40:05
Speaker 10: Of the company's focused in credit card lending. Capital One
40:11
Speaker 10: is one that has some commercial real estate exposure, but
40:16
Speaker 10: it is insignificant compared to that of other banks. To
40:22
Speaker 10: the explain that the commercial real estate pressure reflects some
40:27
Speaker 10: deterioration in economic conditions that could affect the employment situation,
40:33
Speaker 10: then it will be an issue for credit cards, but
40:36
Speaker 10: nobody is making that connection yet, I.
40:40
Speaker 7: Mean, differentiate between some of these credit card companies. For me,
40:45
Speaker 7: I believe you right that American Express is better position
40:50
Speaker 7: for growth from here on. Is that because of the
40:53
Speaker 7: I guess income level of their consumers or some other rush.
40:56
Speaker 10: Now, Yeah, so there are two characters reistic the characteristics
41:01
Speaker 10: the one that you just mentioned.
41:03
Speaker 12: They focus more on super prime consumers. But the other
41:08
Speaker 12: characteristic is that, unlike the other credit card.
41:12
Speaker 10: Lenders, their revenue comes mostly from purchase activity, unless from
41:19
Speaker 10: interest earned on outstanding balances. So in that respect, they
41:25
Speaker 10: are not that directly impacted by interest state levels. But
41:30
Speaker 10: they're more impacted by how often we use our credit
41:33
Speaker 10: cards and for how large transactions. So when you see
41:37
Speaker 10: people travel more, when you see airfare going up, hotel
41:41
Speaker 10: price is going up, all that is good for American Express,
41:46
Speaker 10: not as good or equally good for someone like Capital
41:51
Speaker 10: or Discovered.
41:53
Speaker 3: So, just to continue this competition between the names that
41:56
Speaker 3: we're talking about here, is AMEX the best position of
42:01
Speaker 3: those names to benefit from increased consumer spending? What's the
42:04
Speaker 3: kind of hierarchy?
42:06
Speaker 12: Yeah, in my opinion, although we don't make.
42:09
Speaker 10: Recommendations on the stocks themselves at BI, what we can
42:13
Speaker 10: say is that the fact that American Express is more
42:18
Speaker 10: focused on prime super prime consumers, it's more sensitive to
42:24
Speaker 10: spending than outstanding balances, they have an international presence. All
42:31
Speaker 10: those characteristics will make it hold up better if there
42:35
Speaker 10: is a recession, a consumer recession, which is the fear
42:40
Speaker 10: right now. So as a result, I think their best
42:42
Speaker 10: position compared to others, although I would reiterate it's not
42:48
Speaker 10: like others are falling off the cliff. It's just that
42:51
Speaker 10: things are not as great as they were for them
42:54
Speaker 10: a year or two ago. And like you said, it's
42:57
Speaker 10: a very strange environment.
42:59
Speaker 7: Total about the health of the consumer here. But are
43:02
Speaker 7: there other things, you know, compliance regulation that stand to
43:08
Speaker 7: put these credit card companies to the test.
43:11
Speaker 10: Yeah, there is an outstanding issue with a limit on
43:16
Speaker 10: late payment fees that is under consideration by regulators and
43:22
Speaker 10: the industry. If it comes into effect, it's going to
43:25
Speaker 10: be sometime next year. We don't know the final form,
43:31
Speaker 10: but it's an issue that would impact disproportionately those companies
43:37
Speaker 10: that sponsor co branded cards, meaning the kind of card
43:42
Speaker 10: you will see from your retailer without knowing exactly who
43:46
Speaker 10: issued it. So those are in order of importance, Synchrony
43:52
Speaker 10: Financial brand and to a lesser extent, Capital one. So
43:59
Speaker 10: it's something that we keep an eye on that it's
44:02
Speaker 10: not final life yet.
44:05
Speaker 7: I always wonder exactly who is, you know, behind my
44:08
Speaker 7: credit card whenever I get one of those retailer cards,
44:12
Speaker 7: because it's always such a question mark for me.
44:15
Speaker 3: Yeah, yeah, and it's always it's I feel like it's
44:17
Speaker 3: a question mark for a lot of consumers. And this
44:19
Speaker 3: is why this space is so interesting to watch as
44:21
Speaker 3: an indicator of consumer health, as you know better than anyone, Simone,
44:26
Speaker 3: so really interesting here. I think we got to leave
44:28
Speaker 3: it there, but thank you so much for joining us in, Simone.
44:30
Speaker 3: I can't wait to continue to hear your take on
44:33
Speaker 3: kind of the consumer health when it comes to some
44:36
Speaker 3: of these names and other ones.
44:37
Speaker 7: And it's so interesting when you're looking at kind of
44:39
Speaker 7: consumer credit because we are seeing some of these signals
44:45
Speaker 7: about you know, auto loan credit to tier rating, consumer
44:48
Speaker 7: loan credit to terior rating and all of this, of
44:51
Speaker 7: course with interest remains remaining high. So we're gonna have
44:54
Speaker 7: to see exactly how that factors in to the health
44:57
Speaker 7: of the consumer, particularly as we enter week for consumer earnings.
45:02
Speaker 6: You're listening to the tape. Catch our live program Bloomberg
45:05
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45:09
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45:12
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45:21
Speaker 3: Netflix and Tesla earnings a bit disappointing. We saw the
45:24
Speaker 3: Nasdaq dropping by the most in five months after those earnings,
45:28
Speaker 3: and this gives us a really good excuse to kind
45:30
Speaker 3: of dig into the EV space after those Tesla earnings.
45:33
Speaker 3: And we've got a great guest joining us to give
45:36
Speaker 3: us a look at not just the EV space, but
45:38
Speaker 3: specifically EV charging, which is a really interesting space to
45:42
Speaker 3: be looking at. We've got Josh Aviv on the line.
45:45
Speaker 3: He is the founder and CEO of Spark Charge. Josh,
45:48
Speaker 3: great to speak with you. Thanks for joining us here
45:50
Speaker 3: on this Friday. Before we get into kind of the
45:53
Speaker 3: overall charging space, when it comes to EV's, talk to
45:56
Speaker 3: me just about spark Charge specifically. What do you do,
45:59
Speaker 3: what do you provide?
46:01
Speaker 13: Absolutely so, at spark Charge, we charge electric vehicles in
46:05
Speaker 13: a mobile fashion, so that means we actually deliver and
46:08
Speaker 13: bring the range to the electric vehicle the same way
46:11
Speaker 13: that you would order a pizza on your phone to
46:13
Speaker 13: get delivered to your front door. We bring the charging
46:15
Speaker 13: station to your electric vehicle, whether you be at home,
46:18
Speaker 13: at work, out on the go. We make charging simple, convenient,
46:22
Speaker 13: and easy.
46:24
Speaker 7: This is one part of your business is to consumers,
46:27
Speaker 7: to people get stuck, and then also to rental companies.
46:30
Speaker 7: I understand, give me a breakdown. Where's most of the
46:34
Speaker 7: revenue come from. I would assume rentals.
46:36
Speaker 13: Right, absolutely so. Earlier this year we launched our fleet
46:40
Speaker 13: charging business, where we actually now go out and service
46:43
Speaker 13: fleet customers. So you're talking about companies that have, you know,
46:47
Speaker 13: anywhere from as low as five all the way up
46:50
Speaker 13: to close to one thousand vehicles in their fleet, electric
46:52
Speaker 13: vehicles in their fleet. We go out and we service them.
46:55
Speaker 13: We offer a turn key service where basically we can
46:59
Speaker 13: show up and aren't charging every vehicle every single day.
47:02
Speaker 13: They no longer have to worry about trenching, digging, tunneling, cabling,
47:06
Speaker 13: submitting RFPs where they install the charging stations. We show
47:10
Speaker 13: up with our mobile charging stations. We plug into every
47:13
Speaker 13: single vehicle, We charge every single vehicle, and we make
47:16
Speaker 13: it so that they can grow and scale their fleets
47:18
Speaker 13: almost infinitely, so.
47:19
Speaker 3: As you know, one of the potential big boons for
47:23
Speaker 3: a name like Tesla is offering its own charging network
47:27
Speaker 3: to other companies like Ford Evs, for example. I wonder
47:33
Speaker 3: does the kind of democratization of Tesla's charging networks is
47:37
Speaker 3: that good news for you guys or bad news?
47:40
Speaker 13: It's really is good news. I mean when you think
47:42
Speaker 13: about it, you know, the market from its inception was
47:45
Speaker 13: you know, oh, we're gonna go with Chatamo for you know,
47:49
Speaker 13: DC fast charging. Then it moved to CCS as the
47:52
Speaker 13: dominant charging provider, dominant charging plug. Now it's you know,
47:56
Speaker 13: North American Charging Standard is slowly starting to look like
48:00
Speaker 13: it's going to become the dominant plug that you know,
48:03
Speaker 13: e V OEMs will use to charge their vehicles. I
48:06
Speaker 13: think that's really good. I think we need one standard.
48:09
Speaker 13: I think, you know, trying to juggle three balls in
48:12
Speaker 13: the air and figure out, well, does this car take Chatamo,
48:14
Speaker 13: this one takes CCS, this one take NACS. I think
48:18
Speaker 13: that's very difficult for not only OEMs but charging station
48:21
Speaker 13: manufacturers like ourselves to kind of justify and keep up with.
48:25
Speaker 13: I think if the industry moves with NACS, it's great
48:28
Speaker 13: for everyone. It's a great standard. It's very much develop
48:31
Speaker 13: and tested, so I think it'll be great for the
48:34
Speaker 13: entire industry.
48:35
Speaker 7: Yeah, and it seems like some of the car makers
48:38
Speaker 7: are getting on board with that certainly. I mean the
48:41
Speaker 7: question I have about mobile charging, what's the outlook, because
48:45
Speaker 7: we do expect to see an infrastructure around these mobile
48:50
Speaker 7: charging stations, grounded mobile charging stations grow substantially over the
48:55
Speaker 7: next couple of years. Can mobile charging really play into that?
49:01
Speaker 7: That's you know, there's ultimately hopefully going to be more infrastructure.
49:06
Speaker 13: Absolutely, So when you think about it, mobile charging will
49:09
Speaker 13: always be able to scale faster than infrastructure. Right now,
49:14
Speaker 13: if we decided, you know, spark charging, Bloomberg said, hey,
49:17
Speaker 13: we want to put a charging station in the ground,
49:19
Speaker 13: a DC fast charging station in the ground, it's going
49:22
Speaker 13: to take anywhere from eighteen months on the low end
49:25
Speaker 13: to as high as what we're hearing is four to
49:27
Speaker 13: five years on the high end. And that means that
49:29
Speaker 13: if you really want to have infrastructure at scale, the
49:32
Speaker 13: only real way to do that is through mobile. So
49:36
Speaker 13: mobile will always be able to scale faster, charge more cars,
49:39
Speaker 13: charge more cars in geographical areas that a lot of
49:42
Speaker 13: fixed infrastructure just can't reach. And so as the EV
49:46
Speaker 13: industry continues to grow, it will inevitably have to rely
49:50
Speaker 13: on mobile charging to do so. The fixed infrastructure will
49:54
Speaker 13: never be able to keep up with the amount of
49:56
Speaker 13: cars that are being sold on a daily basis, and
49:58
Speaker 13: so it's spark charge look at that and we say, okay, well,
50:02
Speaker 13: we're definitely going to install charging stations, but there's going
50:05
Speaker 13: to be applications where installing one or two or five
50:08
Speaker 13: charging stations cannot meet the demand of that area, and
50:12
Speaker 13: mobile charging is the only option that can come in
50:14
Speaker 13: there take over charge those cars on a daily basis
50:18
Speaker 13: offer a seamless experience that those just fixed charging stations cannot.
50:23
Speaker 13: And we're seeing that right now. We're on track. Over
50:26
Speaker 13: the past six months or basically year to date, we've
50:29
Speaker 13: onboarded more fleets more EV companies than a lot of
50:32
Speaker 13: fixed charging stations have over their five to ten year
50:36
Speaker 13: lifespan in the business. So the industry is definitely moving
50:39
Speaker 13: towards mobile and definitely loving the fact that mobile is
50:42
Speaker 13: seamless and easy, easy to use.
50:44
Speaker 3: Yeah, all right, so let's say I rent any EV
50:47
Speaker 3: I'm on vacation, I'm taking a road trip for some reason,
50:50
Speaker 3: and I end up in a little bit of a
50:52
Speaker 3: middle of nowhere situation. I'm not near a charger. Do
50:55
Speaker 3: I call a Spark charge person to get access to you?
51:01
Speaker 3: You're on the road? Mobile charging? Is that something that's
51:04
Speaker 3: in the cards for you guys, some like an on
51:06
Speaker 3: demand service to that degree.
51:09
Speaker 13: Absolutely, In fact, it's already in the works. If you
51:12
Speaker 13: rent a car through Hurts, if you run out, or
51:15
Speaker 13: if you feel as though you're even getting low, they
51:18
Speaker 13: will actually be able to dispatch one of our mobile
51:21
Speaker 13: charging units to you so that we can charge your
51:23
Speaker 13: car if you're sitting outside of the hotel, if you're
51:25
Speaker 13: on the side of the road. So we're already seeing
51:28
Speaker 13: applications like that being put into effect. In fact, that
51:32
Speaker 13: program has been up and running, I believe for the
51:34
Speaker 13: past couple of months. Yeah, and it's gotten.
51:36
Speaker 3: But we still have the issue of impatience, like I
51:40
Speaker 3: am never gonna sit on the side of the road
51:42
Speaker 3: for two hours or more while my car is charge
51:44
Speaker 3: even if you had to, I would just I would.
51:46
Speaker 3: I would not want to rent any evy because of that.
51:49
Speaker 3: And maybe that's me being a bad consumer, but that's
51:52
Speaker 3: just the truth. How are you hedging against that issue
51:55
Speaker 3: when it comes to consumer behavior in our final thirty
51:58
Speaker 3: seconds here.
51:59
Speaker 13: Absolutely, so the good news is that you wouldn't have
52:01
Speaker 13: to wait for those two hours. In fact, in most areas,
52:05
Speaker 13: especially both metro cities and areas that we service, our
52:08
Speaker 13: SLA is actually close to sixty to seventy five minutes.
52:11
Speaker 13: And then we use DC fast chargers, so when we
52:14
Speaker 13: show up, we're not trickle charging your car. We're DC
52:17
Speaker 13: fast charging your car at a rate of up to
52:19
Speaker 13: one hundred and twenty five sometimes one hundred and fifty kW,
52:22
Speaker 13: so we can actually get you off the side of
52:24
Speaker 13: the road once we show up in under ten minutes,
52:26
Speaker 13: and you're back to enjoying your day. So no two
52:28
Speaker 13: hour wait, no being stuck on the side of the road.
52:31
Speaker 13: We're in, We're out. We're getting you back to enjoying
52:33
Speaker 13: your electric vehicle.
52:34
Speaker 7: Maddie, could you stand that I still thinking out?
52:37
Speaker 3: I don't know, I don't know, but it's a really
52:39
Speaker 3: a great look at the space. Josh, Thank you so much.
52:42
Speaker 3: Josh Aviv there with spark Charge.
52:47
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
52:50
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52:54
Speaker 2: podcast platform you prefer. I'm Matt Miller I'm on Twitter
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Speaker 2: at Matt Miller nineteen.
53:01
Speaker 12: And I'm Paul Sweeney.
53:01
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53:04
Speaker 2: can always catch us worldwide at Bloomberg Radio