Latest / Bloomberg Intelligence / The Fed, ETFs, Supply Chain, and Eli Lilly

Transcript

The Fed, ETFs, Supply Chain, and Eli Lilly · 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.
• 0:05
  Speaker 2: Every business day we bring you interviews from CEOs, market pros,
• 0:09
  Speaker 2: and Bloomberg experts, along with essential market moven news.
• 0:14
  Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever
• 0:17
  Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.
• 0:21
  Speaker 1: What's new in the last twenty four hours here? What
• 0:24
  Speaker 1: are we seeing?
• 0:25
  Speaker 3: Look, the resolution with First Republic was great to see.
• 0:28
  Speaker 3: The market is working, the market resolution mechanism is working.
• 0:33
  Speaker 3: But on the other hand, there's still some uncertainty within
• 0:36
  Speaker 3: the regional bank space. There's lots of negativity with regards
• 0:40
  Speaker 3: to deposits stability, rising fundy costs, increased regulation, potentially in
• 0:48
  Speaker 3: inadequacy on the capital front, so there's lots of negativity.
• 0:52
  Speaker 2: Those things all sound like not the reason we saw
• 0:55
  Speaker 2: the seale off yesterday.
• 0:56
  Speaker 1: I mean it not.
• 0:58
  Speaker 2: Is it not that shorts after First Republic didn't see
• 1:02
  Speaker 2: any kind of relief rally and said, you know, let's
• 1:05
  Speaker 2: short the hell out of this basket of stocks again.
• 1:08
  Speaker 2: Let's let's have another run at them, because I saw
• 1:10
  Speaker 2: from S three data, you know, Bob Sloan shop S three.
• 1:13
  Speaker 2: They give us a lot of important short selling data.
• 1:16
  Speaker 2: Ninety six percent of KRI shares are sold short. That's amazing, really.
• 1:22
  Speaker 1: Wow, ninety six percent.
• 1:23
  Speaker 2: That means that there's only four percent of shares out
• 1:26
  Speaker 2: there that haven't been borrowed to sell short. And that's
• 1:28
  Speaker 2: probably because those share holders don't even know they have them.
• 1:31
  Speaker 3: Look, the short sellers have done a great job with
• 1:33
  Speaker 3: what happened with SBB, with signature, with First Republic and
• 1:36
  Speaker 3: the playbook still there. Nothing has changed from an exogy
• 1:39
  Speaker 3: to standpoint from Washington or the regulators to derail the
• 1:43
  Speaker 3: narrative that if you short a stock it could go
• 1:46
  Speaker 3: into receivership.
• 1:47
  Speaker 1: All right, I want to bring in another smart mind,
• 1:50
  Speaker 1: and so Matt and I could just sit on the
• 1:51
  Speaker 1: sidelines and let these people kind of debate it. Neil Grossman,
• 1:53
  Speaker 1: former CIO with t k n G Capitol, joins, is, Neil,
• 1:57
  Speaker 1: you've been around the block once or twice. What do
• 1:59
  Speaker 1: you make this bank stuff here? I mean I placed
• 2:02
  Speaker 1: all the blame squarely on Herman Chen and the fellow
• 2:04
  Speaker 1: regional bank people.
• 2:09
  Speaker 4: Look, there are a couple of levels of this. Number one,
• 2:12
  Speaker 4: it was pretty hard to accept what happened with SVB
• 2:18
  Speaker 4: and signats are to begin with, because senior management had
• 2:23
  Speaker 4: to know how badly impaired their assets.
• 2:27
  Speaker 2: Were, not to mention regulators at the Federal Reserve and
• 2:31
  Speaker 2: the FDI see they all claim to have known a
• 2:33
  Speaker 2: year in advance and apparently did nothing.
• 2:35
  Speaker 4: They didn't do anything. However, on the other side, which
• 2:38
  Speaker 4: I believe is in part equally culpability. A year ago today,
• 2:44
  Speaker 4: I think we were all together. Inflation was peaking at
• 2:48
  Speaker 4: nine percent, the FED was just starting to cut and
• 2:52
  Speaker 4: mister Powell and Coe just starting to raise. Were a
• 2:55
  Speaker 4: parton me. We're promising or expecting that by September of
• 2:59
  Speaker 4: this year, FED funds would be peaking between two and
• 3:02
  Speaker 4: two and a half percent. So if you're running an
• 3:05
  Speaker 4: institution like SVB or anything even JP Morgan, and for
• 3:10
  Speaker 4: the last twenty five years, you've been told to ignore
• 3:12
  Speaker 4: reality and ignore risk and just listen to the guy
• 3:15
  Speaker 4: at the FED telling you what she's gonna do. You
• 3:17
  Speaker 4: don't react in interrrational and conservative way.
• 3:21
  Speaker 2: Has anybody herman at these banks tried to put any
• 3:26
  Speaker 2: of the blame on the FED because it is fact
• 3:29
  Speaker 2: that they have raised interest rates by five hundred basis
• 3:32
  Speaker 2: points in about a year. Right, that would be difficult
• 3:35
  Speaker 2: for a lot of investors.
• 3:37
  Speaker 3: There has been no blame on the FED, and I
• 3:39
  Speaker 3: don't think you want to do that because the FED
• 3:40
  Speaker 3: also is your regulator, so you can be blaming the
• 3:42
  Speaker 3: regulators for your own problems.
• 3:44
  Speaker 4: Well, that's why we're here. We can blame. And by
• 3:47
  Speaker 4: the way, they were way too slow in raising rates
• 3:49
  Speaker 4: even when they started to be very clear. But at
• 3:52
  Speaker 4: the end of the day, you're now a year into
• 3:54
  Speaker 4: this SVB and signature go, which is bad enough. But
• 3:57
  Speaker 4: first Republic, there is no excuse before they had six
• 4:00
  Speaker 4: weeks right where first of all, you'd had a big
• 4:04
  Speaker 4: rally treasuries, which meant asset prices were actually appreciating. You
• 4:09
  Speaker 4: knew how impaired your capital was, and yet you didn't
• 4:12
  Speaker 4: do one thing to reduce your balance sheet leverage and
• 4:15
  Speaker 4: give yourself a chance to survive and maybe raise some
• 4:18
  Speaker 4: capital at the same time.
• 4:19
  Speaker 1: Why they didn't use them?
• 4:20
  Speaker 2: Why didn't they?
• 4:22
  Speaker 5: Yeah?
• 4:22
  Speaker 3: I just think that the management team are not crisis managers.
• 4:27
  Speaker 3: They've always been lauded for just how well they run
• 4:31
  Speaker 3: the bank, and so they.
• 4:32
  Speaker 1: Weren't in terms of customer service, in.
• 4:34
  Speaker 3: Terms of customer service and in terms of having above
• 4:38
  Speaker 3: peer evaluation. So they just weren't experienced enough to deal
• 4:44
  Speaker 3: with the crisis, whereas a bank like Western Alliance.
• 4:47
  Speaker 2: You're on the phone with Jamie Diamond. Jamie Diamond called
• 4:51
  Speaker 2: up the CEO of First Republic, didn't he say it, like, dude,
• 4:55
  Speaker 2: do this right now?
• 4:57
  Speaker 3: You just compare with what happened with Western Alliance. It
• 4:59
  Speaker 3: almost failed during the financial crisis, and they have a
• 5:03
  Speaker 3: litany of actions that they took in terms of increasing
• 5:06
  Speaker 3: the deposit coverage, insurance coverage, selling assets, a plan to
• 5:11
  Speaker 3: increase their capital, seeing deposits come back. So it's a
• 5:15
  Speaker 3: start contrast to what happened between the two managements.
• 5:17
  Speaker 1: So, Neil, I mean, when we'll hear from Fred Truman
• 5:20
  Speaker 1: j Palll later today, how much of all this banking
• 5:23
  Speaker 1: stuff and today, yesterday was a really bad day for
• 5:26
  Speaker 1: the regional banks. How much is that factor into his
• 5:28
  Speaker 1: calculuss analysis, his messaging.
• 5:30
  Speaker 4: Maybe, well, look, I think you have no choice but
• 5:32
  Speaker 4: to be considering it. And there's no doubt that there
• 5:36
  Speaker 4: is significant risks. My guess is one of the problems
• 5:39
  Speaker 4: with this bank and others is in fact there has
• 5:41
  Speaker 4: been tremendous impairment of capital due to the sharp fall
• 5:47
  Speaker 4: and assets the values of assets they hold. The problem
• 5:50
  Speaker 4: on the other side, of course, is as you've seen
• 5:53
  Speaker 4: the last number of days, Yeah, the data is not
• 5:55
  Speaker 4: really helping them, and the inflation data was higher. Look
• 5:59
  Speaker 4: at the ADP numbers this morning, another three hundred thousand jobs.
• 6:01
  Speaker 4: So you have a very strange set of circumstances where
• 6:05
  Speaker 4: the inflation and by the way, I think we've talked
• 6:08
  Speaker 4: about this, I suspect as you've move into later in
• 6:11
  Speaker 4: the year, you're going to have up with pressure begin
• 6:14
  Speaker 4: to develop again on asset price on prices.
• 6:17
  Speaker 2: So what does the FED do now? I mean, they're
• 6:18
  Speaker 2: clearly going to raise today, right twenty five basis points.
• 6:22
  Speaker 2: What does Powell have to say to calm markets in
• 6:26
  Speaker 2: terms of financial stability and to rein in inflation when
• 6:31
  Speaker 2: you're worried about upper pressure later in the year.
• 6:33
  Speaker 4: Well, a couple of things. First of all, for the
• 6:35
  Speaker 4: next couple of months, I mean, if you look at
• 6:37
  Speaker 4: gone on with oil and commodity prices, there is going
• 6:40
  Speaker 4: to be some downwards.
• 6:41
  Speaker 2: We'll drop five dollars over it was crazy.
• 6:44
  Speaker 4: Right, So there's going to be some temporary drop in
• 6:46
  Speaker 4: prices to begin with, which may give them some cover
• 6:50
  Speaker 4: for the moment. And I think you're seeing. You know,
• 6:54
  Speaker 4: they're going to continue to talk about the fact that
• 6:56
  Speaker 4: there seems to be some slowing in the employment picture.
• 7:00
  Speaker 4: And look, I don't know what you do at this
• 7:02
  Speaker 4: point in a general scheme of things. They have raised
• 7:06
  Speaker 4: rates five percent to five percent, and there's an there's
• 7:09
  Speaker 4: a legitimacy to be sent to say five to five
• 7:12
  Speaker 4: and a quarter is not really relevant. I suspect he's
• 7:15
  Speaker 4: going he's going to say that whether they raised today
• 7:18
  Speaker 4: or not, they're now going to start to step back
• 7:21
  Speaker 4: and give it time to see what the what the
• 7:23
  Speaker 4: effect is. Look, you know there's always a lag between
• 7:26
  Speaker 4: FED action and results, and you know that they don't
• 7:31
  Speaker 4: want to totally unsettled the economic system right now. So
• 7:37
  Speaker 4: I'm guessing that's where you head.
• 7:38
  Speaker 1: Now.
• 7:39
  Speaker 4: The problem on the other side is if he's going
• 7:41
  Speaker 4: to stimulate a rally in equities, and equities are quite
• 7:44
  Speaker 4: interesting right now as well. I mean, if you look
• 7:47
  Speaker 4: leaving aside the the the the banks in theory, stocks
• 7:52
  Speaker 4: are actually a lot higher. The banks have been getting killed,
• 7:54
  Speaker 4: but the stocks are actually near the highest level in
• 7:57
  Speaker 4: six months. But if I said, prices continue to go
• 8:01
  Speaker 4: up without the fundamental supporting them, then the system becomes
• 8:06
  Speaker 4: more more at risk to unexpected conces.
• 8:10
  Speaker 1: Somebody said, we had our earlier guests on said it
• 8:12
  Speaker 1: just kind of feels a little bit nineteen ninety nine,
• 8:13
  Speaker 1: two thousand and I said, oh, don't go there. I
• 8:15
  Speaker 1: live through that, herman. Are the regional banks expecting the
• 8:20
  Speaker 1: FED and the FDIC and other regulators to kind of
• 8:24
  Speaker 1: increase regulations on them going forwards? That the expectation for investors.
• 8:27
  Speaker 3: Yeah, the base case is that the capital ratios will
• 8:31
  Speaker 3: go up because banks will now need to incorporate the
• 8:34
  Speaker 3: unrealized losses and the available sales securities into the capital calculation.
• 8:39
  Speaker 1: Increase.
• 8:40
  Speaker 3: The liquidity requirements that went away during the Trump administration
• 8:44
  Speaker 3: for the regionals and potentially higher debt issue went to
• 8:48
  Speaker 3: help protect the capital structure of banks as well.
• 8:51
  Speaker 6: So that's the base case.
• 8:52
  Speaker 3: I think everybody's just expecting that if it gets worse,
• 8:54
  Speaker 3: then that's could be an incremental.
• 8:56
  Speaker 1: A know, earlier I pitched to this is me and
• 8:59
  Speaker 1: my pitch to Stevie Cohen, give me two billion dollars.
• 9:02
  Speaker 1: I'm going to buy some regional banks. I'm not sure when,
• 9:04
  Speaker 1: but I'm very close to buying a basket of these
• 9:07
  Speaker 1: high quality regionals, and I'm gonna make you thirty forty
• 9:09
  Speaker 1: percent twelve months.
• 9:10
  Speaker 4: Well, you know you can. You can actually take advantage
• 9:12
  Speaker 4: of the fact that not only your price is dropping,
• 9:14
  Speaker 4: but the volatility is going up in the regional so
• 9:16
  Speaker 4: you can actually write put options on on regional banks
• 9:20
  Speaker 4: in the end of seas let's say five percent below
• 9:23
  Speaker 4: the market, and I haven't looked at the prices today,
• 9:26
  Speaker 4: but I'll bet you get paid an awful lot of
• 9:27
  Speaker 4: money for that. So you break events on this type
• 9:29
  Speaker 4: of strategy, you're probably ten to twenty percent below market,
• 9:32
  Speaker 4: depending how far are you out your go guys, this
• 9:34
  Speaker 4: probably will be doing that.
• 9:35
  Speaker 1: This is gold.
• 9:36
  Speaker 2: Why don't we start a buffer regional banks buffer ETF.
• 9:40
  Speaker 1: Yes, exactly know. But yeah, we've heard a lot of
• 9:43
  Speaker 1: those are all the rage right now? They are all right, Neil,
• 9:45
  Speaker 1: thanks so much for joining us. Neil Grossman, former CIO
• 9:48
  Speaker 1: a tk n G Kapital, joining us here in our studio,
• 9:51
  Speaker 1: as is our resident bank expert, Herman Channing. You might
• 9:54
  Speaker 1: as well, just you know, take the seat for the
• 9:56
  Speaker 1: Day Vandlinberg Interactive Broker studio. Herman Chan covers the regional
• 10:00
  Speaker 1: banks for Bloomberg Intelligence.
• 10:03
  Speaker 5: You're listening to the Team Ken's Are Live program Bloomberg
• 10:06
  Speaker 5: Markets weekdays at ten am Eastern on Bloomberg dot Com,
• 10:10
  Speaker 5: the iHeartRadio app and the Bloomberg Business App, or listen
• 10:13
  Speaker 5: on demand wherever you get your podcasts.
• 10:17
  Speaker 1: All right, FED Day today, a lot of folks are
• 10:20
  Speaker 1: going to be paying attention safe for our Federal Reserve
• 10:22
  Speaker 1: and FED Chairman j Palll probably no more than Omar Aguilar.
• 10:27
  Speaker 1: He's the CEO and CIO of Schwab Asset Management. What
• 10:31
  Speaker 1: does that mean. Well, here's a couple of just ridiculous
• 10:35
  Speaker 1: stats about Schwab seven hundred and fifty five billion billion
• 10:38
  Speaker 1: in assets under management as of the end of last year,
• 10:41
  Speaker 1: third largest provider of index mutual funds and fifth largest
• 10:44
  Speaker 1: provider of ETFs. I don't know how they even manage
• 10:48
  Speaker 1: all that stuff, but somehow Omar does it. I mean
• 10:50
  Speaker 1: we get a few minutes of his time. Omar, thanks
• 10:51
  Speaker 1: so much for making some time in your schedule to
• 10:54
  Speaker 1: chat with us today. What are you expecting from your
• 10:57
  Speaker 1: Federal Reserve and kind of where do we go from here.
• 11:03
  Speaker 7: Hey Paul, good morning. Always happy to talk to you
• 11:06
  Speaker 7: and the rest of the audience. Yes, you know it
• 11:09
  Speaker 7: is and it isn't important. It's called Guess FED Day
• 11:12
  Speaker 7: and we all, you know, get together to just figure out.
• 11:15
  Speaker 7: I mean, I never see most of my fixed income
• 11:19
  Speaker 7: team so excited as FED Day. I mean, yeah, that
• 11:21
  Speaker 7: tells you a lot about fixed income, but in general
• 11:23
  Speaker 7: they get really really excited about, you know, what happens.
• 11:26
  Speaker 7: I would probably say the expectations, just like the rest
• 11:29
  Speaker 7: of the market, is that there will be at twenty
• 11:31
  Speaker 7: five basis points increase in the FED rates. I think
• 11:34
  Speaker 7: what is gonna be the probably the most interesting, you know,
• 11:37
  Speaker 7: part of the of the day is gonna be what
• 11:39
  Speaker 7: the conference called will look like and the kind of
• 11:41
  Speaker 7: questions and any insights that we may get from from
• 11:45
  Speaker 7: Jerom Powell about you know, what may come ahead. You know,
• 11:49
  Speaker 7: our expectations continue to be that, you know, given you know,
• 11:53
  Speaker 7: where we are with the stress in the banking sector,
• 11:57
  Speaker 7: with the potential tidening of credit conditions as a result
• 12:01
  Speaker 7: of the failed banks, as well as just the overall
• 12:05
  Speaker 7: you know, structure of this lowing down of the economy,
• 12:08
  Speaker 7: that there is the possibility that the Fed may actually
• 12:11
  Speaker 7: pause or that hint that they will pause, you know,
• 12:14
  Speaker 7: provided that they will have themselves thinking that inflation numbers
• 12:17
  Speaker 7: continue to go high. They will continue, but you know,
• 12:20
  Speaker 7: clearly the signs that inflation is coming down maybe on
• 12:22
  Speaker 7: their on their side.
• 12:24
  Speaker 1: Oh, Mark, we're you know, sixty sixty five percent of
• 12:26
  Speaker 1: the way through earning season here, and let's let's take
• 12:29
  Speaker 1: our eye off the FED ball for just a moment.
• 12:31
  Speaker 1: What are you seeing in earnings? Does anything kind of
• 12:33
  Speaker 1: jumping out at you, either on the plus or the
• 12:35
  Speaker 1: negative side.
• 12:36
  Speaker 7: Yes, that's a that's a great question. And yes, we're
• 12:39
  Speaker 7: roughly like seventy percent of the S and P already reporting,
• 12:43
  Speaker 7: and we continue to see that, you know, the the
• 12:46
  Speaker 7: numbers to be probably in line to what we expected.
• 12:49
  Speaker 7: The big part of the driver here, you know, tends
• 12:53
  Speaker 7: to be obviously that these what I call this inflation
• 12:56
  Speaker 7: of earnings that came out as a result of you know,
• 12:59
  Speaker 7: higher inflation number increasing the top line for most companies.
• 13:03
  Speaker 7: And now as that pricing power starts to you know,
• 13:05
  Speaker 7: go away, then we're starting to see just those softened
• 13:08
  Speaker 7: you know, pieces of that. And just to give you
• 13:10
  Speaker 7: a couple of things. You know, earnings that are batting
• 13:13
  Speaker 7: estimates by seven percent is roughly around seventy four percent
• 13:16
  Speaker 7: of the companies, and that's again that tells you a
• 13:19
  Speaker 7: little bit of the fact that, you know, earnings estimates
• 13:22
  Speaker 7: going into the quarter were actually load to begin with.
• 13:25
  Speaker 7: But that also shows you that when you compare that
• 13:27
  Speaker 7: to previous year, that we're going to see this, you know,
• 13:30
  Speaker 7: sort of this inflation of EPs, you know, compared to
• 13:33
  Speaker 7: what we saw last year, that is expected given where
• 13:36
  Speaker 7: we are in the cycle.
• 13:38
  Speaker 2: So what does it mean by year end, are we
• 13:40
  Speaker 2: in a recession?
• 13:42
  Speaker 7: We're We're definitely, I would probably say that on earning side, well,
• 13:47
  Speaker 7: we're getting to that point that the earnings recession has begun.
• 13:51
  Speaker 7: I think economic wise, we have gone on our theory
• 13:54
  Speaker 7: and our you know, continued claim is that there is
• 13:58
  Speaker 7: these rolling recessions of different parts of the economy that
• 14:01
  Speaker 7: will continue to take place. We saw already the selfness
• 14:04
  Speaker 7: in housing, We saw the softness in manufacturing. We haven't
• 14:08
  Speaker 7: seen the softness in the service sector. And I think
• 14:10
  Speaker 7: by the time we get to that soltness in the
• 14:12
  Speaker 7: service sector, we're probably gonna have a rebound in housing.
• 14:15
  Speaker 7: We're going to have a rebound of this, and in
• 14:17
  Speaker 7: many cases what we have encouraged clients to think about
• 14:20
  Speaker 7: it is, you know, what does that mean for your
• 14:22
  Speaker 7: overall portofolio. You know, we have encouraged clients to reduce duration.
• 14:26
  Speaker 7: There is this time period given the higher interest rates
• 14:29
  Speaker 7: at the front end, but this is maybe a time
• 14:31
  Speaker 7: for people to start thinking about rebalancing their strategy and
• 14:34
  Speaker 7: increasing duration given that the expectation that we're going to
• 14:37
  Speaker 7: be a top you know, of the FED cycle is
• 14:40
  Speaker 7: coming soon.
• 14:42
  Speaker 1: So Matt Omar is obviously a smart guy. Got his
• 14:44
  Speaker 1: PhD in statistics and decision sciences from Duke, so he's
• 14:49
  Speaker 1: a Duke Blue devil. So that's why we like talking
• 14:51
  Speaker 1: to him. So, Omar, you've got a gajillion and one
• 14:54
  Speaker 1: Schwab clients out there. What's kind of the question you're
• 14:58
  Speaker 1: getting most often from them these days?
• 15:02
  Speaker 7: Well, the bigger question is similar to when you said,
• 15:05
  Speaker 7: is that are we going to see a big recession?
• 15:07
  Speaker 7: And is this going to happen tomorrow? And what we
• 15:09
  Speaker 7: have described to folks is that recessions don't necessarily a
• 15:12
  Speaker 7: peer one morning and then that's appear the next week.
• 15:16
  Speaker 7: We tend to see these cycles play out. I think
• 15:18
  Speaker 7: what has the bigger question that we get as well,
• 15:22
  Speaker 7: is the recession something that we're going to see it
• 15:25
  Speaker 7: will be sustained. And then second question that comes right
• 15:28
  Speaker 7: is how about inflation? And now our answers, you know,
• 15:31
  Speaker 7: to those questions tend to be twofold. One is, you know,
• 15:34
  Speaker 7: normally every cycle, you know has a different you know pass,
• 15:38
  Speaker 7: and what we're seeing here is a very unique cycle
• 15:40
  Speaker 7: because of the tithing, of the speed of the tithing,
• 15:43
  Speaker 7: of central banks racing raids. So therefore we're not seeing
• 15:48
  Speaker 7: this similar type of cycles for that recession to just
• 15:51
  Speaker 7: be you know, claim as the way it was. But
• 15:53
  Speaker 7: what we saw, as I said earlier, is these rolling
• 15:56
  Speaker 7: recessions of different parts of the economy. But the good
• 15:59
  Speaker 7: news though is that the economy is still holding up
• 16:02
  Speaker 7: well and even though we're going to see some softness
• 16:04
  Speaker 7: on the labor report on Friday, you know, I think,
• 16:07
  Speaker 7: you know, that is a healthy path for getting a
• 16:10
  Speaker 7: full recovery.
• 16:11
  Speaker 1: All right, Omar, thank you so much for joining us.
• 16:12
  Speaker 1: Really appreciate it. Omar Aguilar, he's the CEO and CIO
• 16:16
  Speaker 1: of schwab Asset Management.
• 16:18
  Speaker 5: You're listening to the tape. Cat's are live program Bloomberg
• 16:21
  Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the
• 16:25
  Speaker 5: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
• 16:28
  Speaker 5: You can also listen live on Amazon Alexa from our
• 16:31
  Speaker 5: flagship New York station, Just say Alexa play Bloomberg eleven thirty.
• 16:38
  Speaker 1: Let's talk a little fixed income. And when we talk
• 16:40
  Speaker 1: fixed income, let's talk to somebody who kind of just
• 16:43
  Speaker 1: does nothing but fixed income. And our next guest certainly
• 16:46
  Speaker 1: fills up Bill Joanna Go Diego's co founder of bond Blocks,
• 16:50
  Speaker 1: and that is an ETF focusing exclusively or family of
• 16:55
  Speaker 1: ETFs at focus exclusively on fixed income. And when we
• 16:58
  Speaker 1: talk ETFs, we need Katie Greifel. Yeah, she's like an
• 17:02
  Speaker 1: expert here. She does an NEEDTF show with you. That's true, right,
• 17:05
  Speaker 1: Mondays or something.
• 17:06
  Speaker 2: It's usually on Mondays.
• 17:08
  Speaker 1: It's actually tomorrow's Okay, go figure out Thursday. That works
• 17:11
  Speaker 1: fine as well. Joanna, thanks so much for joining us
• 17:14
  Speaker 1: here at our Bloomberg Interactive Broker Studio. We appreciate you
• 17:16
  Speaker 1: coming into the studio. Man. There's a lot going on
• 17:19
  Speaker 1: out there in the fixed income space. After a disastrous
• 17:23
  Speaker 1: twenty two guys found your footing here in twenty twenty three,
• 17:27
  Speaker 1: you guys being the fixed income space.
• 17:28
  Speaker 8: That's right, the income is back in fixed income and
• 17:32
  Speaker 8: we're potentially today ending the hiking cycle. We're at the
• 17:36
  Speaker 8: end of a cycle and it's now time, we believe,
• 17:39
  Speaker 8: for investors to get right back into portfolio, reposition their
• 17:42
  Speaker 8: portfolios in a fixed income and take advantage of the
• 17:45
  Speaker 8: opportunity ahead.
• 17:46
  Speaker 1: We do see.
• 17:49
  Speaker 2: We do see pricing indicating that today's the last hike.
• 17:52
  Speaker 2: So you don't think there's gonna be another hike in June.
• 17:54
  Speaker 8: So whether there's another hike or not, we probably we
• 17:57
  Speaker 8: need to be thinking about these yields that are going
• 17:59
  Speaker 8: to be really powerful in your portfolio. They're at historic levels,
• 18:04
  Speaker 8: and we think investors should be, you know, getting their
• 18:08
  Speaker 8: allocations back into fixed income.
• 18:11
  Speaker 2: I wonder, I mean, we do see the two year
• 18:15
  Speaker 2: yielding almost four percent right coming down a little bit.
• 18:18
  Speaker 2: But we've spoken to you in the past. I don't
• 18:20
  Speaker 2: know if Katie wants to jump in here. We've also
• 18:22
  Speaker 2: spoken to investors who buy your products quite often in fact,
• 18:25
  Speaker 2: and it doesn't seem like it's the yield level that
• 18:29
  Speaker 2: drives that they sometimes need some of your ETFs for
• 18:33
  Speaker 2: certain strategies that they're trying to execute on.
• 18:35
  Speaker 8: Yeah, exactly. I mean you can take this simple X
• 18:38
  Speaker 8: half an X one they are that's the sixth month
• 18:41
  Speaker 8: and the one year treasury products we have. I mean,
• 18:43
  Speaker 8: they're really excellent, excellent places to sort of you know,
• 18:47
  Speaker 8: stay in there for safety, low volatility, also tax exempt
• 18:52
  Speaker 8: from state taxes because it's a treasury portfolio. I think
• 18:55
  Speaker 8: there's been really with these yields in that feature. Like,
• 18:58
  Speaker 8: I think it's a really great place for investors to
• 19:00
  Speaker 8: use for cash management. So those that's a fairly simple
• 19:03
  Speaker 8: trade all of our clients have been making this year.
• 19:05
  Speaker 8: But we also think that investors should be looking opportunistically
• 19:10
  Speaker 8: at credit because you know, as we enter the next
• 19:13
  Speaker 8: phase of this cycle, and whether or not you believe
• 19:15
  Speaker 8: there's an economic slowdown coming, you know, there are opportunities
• 19:18
  Speaker 8: here across different credit ratings and credit that are really
• 19:22
  Speaker 8: compelling because the yields are giving you a huge head
• 19:25
  Speaker 8: start in returns. This year, well, it's.
• 19:26
  Speaker 9: Really interesting if you look at the flow show across
• 19:29
  Speaker 9: the whole industry, fixed income ETFs have taken in something
• 19:33
  Speaker 9: to the tune of sixty five billion dollars this year
• 19:36
  Speaker 9: equity ETFs, and there's a ton more of them. They've
• 19:39
  Speaker 9: only taken in somewhere in the neighborhood of forty billions.
• 19:42
  Speaker 2: So in fact, when you type in ETF go, the
• 19:45
  Speaker 2: launch screen default to equities.
• 19:47
  Speaker 9: Because I mean they make up the bulk of assets still.
• 19:50
  Speaker 9: But obviously fixed income ETFs have taken in the bulk
• 19:53
  Speaker 9: of flows at least when it comes to twenty twenty three.
• 19:55
  Speaker 9: You and I were talking a little bit earlier this
• 19:57
  Speaker 9: morning about how if you look at the common position
• 20:00
  Speaker 9: of those fixed income flows, you are seeing a little
• 20:03
  Speaker 9: bit of a dynamic shift.
• 20:05
  Speaker 8: Yeah, so there's two things we're observing right now. Is
• 20:07
  Speaker 8: in treasuries, you're seeing obviously there's kind of equal flows
• 20:11
  Speaker 8: this year to date in both the short end of
• 20:13
  Speaker 8: treasuries and also now year to date in the long end.
• 20:17
  Speaker 8: So you're seeing investors take a little bit of risk
• 20:20
  Speaker 8: on in their portfolio, is at least in the treasury space.
• 20:23
  Speaker 8: And that's someone that's taken on risk understanding that maybe
• 20:26
  Speaker 8: there is going to be an economic slowdown and bond
• 20:28
  Speaker 8: prices may rise towards the end of the year. And
• 20:31
  Speaker 8: then what we just tapped into which I think is
• 20:33
  Speaker 8: really interesting is just in April, you're seeing people shift
• 20:38
  Speaker 8: back into corporate debt and also high yield, and that's
• 20:42
  Speaker 8: a space that we've been we've launched into, you know,
• 20:45
  Speaker 8: significantly across credit ratings and across sectors, and we really believe,
• 20:50
  Speaker 8: as I mentioned before, there's a lot of relative opportunity
• 20:52
  Speaker 8: within high yield versus just looking at it so broadly.
• 20:55
  Speaker 9: So you mentioned that people when it comes to the
• 20:57
  Speaker 9: treasury market specifically, people taking a little bit more risk
• 21:01
  Speaker 9: going out the curve duration risk, But at the same time,
• 21:04
  Speaker 9: it feels like investors are also taking on more credit risk.
• 21:07
  Speaker 9: Also to your point, high yield ETFs coming back into
• 21:10
  Speaker 9: vogue a little bit here. How do you marry those
• 21:13
  Speaker 9: two things? Because when I think long duration treasuries, I think,
• 21:17
  Speaker 9: oh my goodness, this economy is going to slow down.
• 21:21
  Speaker 9: Why might high yield also be seeing love in this environment?
• 21:25
  Speaker 8: Well, I think that what people don't haven't been able
• 21:27
  Speaker 8: to see more as clearly as they should and Hyael
• 21:30
  Speaker 8: is that the categories are very different. And so for
• 21:32
  Speaker 8: something like if you just look at the very first
• 21:34
  Speaker 8: high yield category of XPB, it actually has the lowest
• 21:38
  Speaker 8: default rate amongst the high yield category.
• 21:41
  Speaker 2: If there's high yield, and there's high there.
• 21:42
  Speaker 8: High it's only one percent in XPB in our product XBB,
• 21:46
  Speaker 8: And it's if you can get access to a big
• 21:48
  Speaker 8: diversified portfolio in that credit writing space, you know, you're
• 21:52
  Speaker 8: looking at yields that are you know, close to seven percent,
• 21:55
  Speaker 8: and that's it. That's a really interesting thing. So if
• 21:58
  Speaker 8: you're worried about a weakening I cannot conditions, you should
• 22:01
  Speaker 8: consider adding some XBB to your portfolio because it's the
• 22:04
  Speaker 8: least exposed to this risk over time, and so you
• 22:08
  Speaker 8: now have an opportunity to be more precise, more timely
• 22:12
  Speaker 8: tools to really take advantage of what's coming.
• 22:15
  Speaker 4: Well.
• 22:15
  Speaker 2: So it's I mean, we're all worried about weakening economic conditions,
• 22:19
  Speaker 2: but if you think that they're not going to get
• 22:21
  Speaker 2: so weak that everybody defaults, this is what you buy, right.
• 22:23
  Speaker 8: Yeah, exactly. And then even if you go, you know,
• 22:26
  Speaker 8: a little further down the credit rating scale, some people
• 22:29
  Speaker 8: take a view and this is why we created so
• 22:32
  Speaker 8: many products. In a granular way. Some people could give you,
• 22:34
  Speaker 8: I mean, this is your favorite, the triple C product. Okay,
• 22:38
  Speaker 8: so it has a yield that's almost fourteen percent, So
• 22:43
  Speaker 8: it has a yield that's almost fourteen percent. So there
• 22:46
  Speaker 8: are investors out there. Like you said, even just taking
• 22:49
  Speaker 8: that really long treasure review sounds really you know, compelling
• 22:53
  Speaker 8: to you. But the truth is, like, if you believe
• 22:57
  Speaker 8: the risk of recession in the second half of twenty
• 22:59
  Speaker 8: twenty three is over, you could consider some X triple C.
• 23:03
  Speaker 8: It offers a higher yield, and it's just it's something
• 23:08
  Speaker 8: that like it. So I went back into high yield.
• 23:11
  Speaker 8: You may, you know, take a small portion of your
• 23:13
  Speaker 8: high old exposure and tilt a little bit with these products.
• 23:17
  Speaker 9: Really quickly, we have a question from a listener writing in,
• 23:20
  Speaker 9: when are you going to bring an investment grade sector
• 23:23
  Speaker 9: suite of products into the market. We only have about
• 23:25
  Speaker 9: thirty seconds left.
• 23:26
  Speaker 8: We just filed for three triple B products two weeks ago,
• 23:32
  Speaker 8: and what we've done is we've carved them up into
• 23:34
  Speaker 8: maturity buckets, not sectors yet, but we always will take
• 23:37
  Speaker 8: suggestions and we have looked at sectors and I think
• 23:40
  Speaker 8: it's an interesting thing that you know, fixed incomes should
• 23:42
  Speaker 8: be more ganular.
• 23:43
  Speaker 1: Right watch the space, Watch the space, and you guys
• 23:45
  Speaker 1: have it completely covered on the ETF front, joined Diego's
• 23:48
  Speaker 1: co founder of bond Blocks, joining us live here in
• 23:51
  Speaker 1: our Bloomberg Interactive Broker Studio as it does Katie Greifel.
• 23:55
  Speaker 1: She covers all things on the ETF front. You guys
• 23:57
  Speaker 1: got your show on tomorrow.
• 23:58
  Speaker 2: Tomorrow Tomorrow, souly. Our show is Monday, is at one pm.
• 24:02
  Speaker 2: It's called ETFIQ.
• 24:06
  Speaker 5: You're listening to the team Ken's are live program Bloomberg
• 24:09
  Speaker 5: Markets weekdays at ten am Eastern on Bloomberg dot com,
• 24:13
  Speaker 5: the iHeartRadio app and the Bloomberg Business App, or listen
• 24:16
  Speaker 5: on demand wherever you get your podcasts.
• 24:20
  Speaker 1: Looking forward to this next discussion. It's about logistics moving
• 24:23
  Speaker 1: stuff around. You know, all the boxes on railroads and
• 24:27
  Speaker 1: trucks and who knows what else. Drew Wiklson he does
• 24:30
  Speaker 1: this stuff. He's the CEO of RXO, which is a
• 24:33
  Speaker 1: tech enabled broker services platform that will spun out of
• 24:37
  Speaker 1: its parent XPO. I guess recently, I'm looking at the
• 24:41
  Speaker 1: RXO stock and it's got a market cap at two
• 24:43
  Speaker 1: point three billion, it's up fifteen and a half percent
• 24:46
  Speaker 1: this year, up seven and three quarters percent today, and
• 24:49
  Speaker 1: the parent company stock XPOS up thirty five percent. So
• 24:52
  Speaker 1: it looks like shareholders are winning all over the place
• 24:54
  Speaker 1: with this spin out story.
• 24:55
  Speaker 4: Here.
• 24:56
  Speaker 1: RXO reported numbers last night, so we appreciate getting a
• 24:58
  Speaker 1: few minutes of Drew's time. So, Drew, you guys reported
• 25:01
  Speaker 1: your earnings last night. What are the highlights from ROXO
• 25:04
  Speaker 1: and the logistics business?
• 25:06
  Speaker 10: Thanks for having me, Paul and Matt. When you look
• 25:09
  Speaker 10: at what the highlights were, the first is that while
• 25:12
  Speaker 10: the macro economy is tough right now, we took market
• 25:15
  Speaker 10: share and we grew volume by six percent on a
• 25:18
  Speaker 10: year every year basis. So while there's less volume out
• 25:20
  Speaker 10: there in the freight world, we're able to grow and
• 25:23
  Speaker 10: grow profitably. We have best in class margins where our
• 25:27
  Speaker 10: brokerage gross profit percentage came in at sixteen point three percent.
• 25:33
  Speaker 10: That's well ahead of where the industry came in. And
• 25:37
  Speaker 10: the last point that I'll make is our technology continues
• 25:40
  Speaker 10: to work. We've invested in technology from day one, and
• 25:43
  Speaker 10: our technology is allowing us to operate at best in
• 25:47
  Speaker 10: class gross profit percentage. It's helping us grow volume, and
• 25:51
  Speaker 10: it's helping us continue to increase our employee productivity. So
• 25:54
  Speaker 10: we're very pleased with the results for the quarter and
• 25:57
  Speaker 10: fill our best days are ahead of us.
• 26:00
  Speaker 2: Are you not worried about a slow down in overall volume?
• 26:03
  Speaker 2: We were hearing from some shippers. Ups is one for sure,
• 26:10
  Speaker 2: but there are a couple others Fernando Valley was talking
• 26:12
  Speaker 2: about who have said we're in a freight recession already.
• 26:17
  Speaker 10: We absolutely are seeing a slowdown in the overall macro economy,
• 26:21
  Speaker 10: and as I said, there's less volume out there. But
• 26:24
  Speaker 10: we've done things that are idiosyncratic to our business that
• 26:27
  Speaker 10: are allowing us to grow volume on a year of
• 26:30
  Speaker 10: a year basis despite the tough macro. Again, our technology
• 26:34
  Speaker 10: is best in class. It does things like help customers
• 26:36
  Speaker 10: decide what day of the week they should ship something,
• 26:39
  Speaker 10: what mode of transportation they should use. So when they
• 26:42
  Speaker 10: look at this as a tool and they are consolidating
• 26:44
  Speaker 10: the number of carriers that they're working with, even though
• 26:47
  Speaker 10: the pie for them may get smaller, our piece of
• 26:50
  Speaker 10: the pie is getting larger, and it positions us very
• 26:53
  Speaker 10: well for when the market and flex.
• 26:55
  Speaker 1: So Drew explain to us kind of your business, because
• 26:58
  Speaker 1: you're not really like owning rare roads and trucks and
• 27:00
  Speaker 1: things like that. You're more kind of logistics and software
• 27:03
  Speaker 1: and a brokerage business. Can you explain kind of what
• 27:06
  Speaker 1: you guys do day to day, who your customers are.
• 27:10
  Speaker 10: Yeah, we work with a lot of the Fortune one
• 27:12
  Speaker 10: hundred and five hundred companies and we're a best in
• 27:15
  Speaker 10: class tech enabled truck brokers. So what we do is
• 27:18
  Speaker 10: help the largest shippers in the world connect with massive
• 27:22
  Speaker 10: amounts of capacity. We do business with fifty eight of
• 27:25
  Speaker 10: the Fortune one hundred and over two hundred of the
• 27:28
  Speaker 10: Fortune five hundred, and we give them access to about
• 27:31
  Speaker 10: a million and a half trucks and these are mostly
• 27:35
  Speaker 10: small to mid sized cares, typical sized cares. As a
• 27:38
  Speaker 10: large shipper, you wouldn't sign up, but as we're able
• 27:41
  Speaker 10: to aggregate capacity for our customers, it's a huge benefit
• 27:44
  Speaker 10: to them.
• 27:45
  Speaker 2: Do we see smooth logistics in terms of the US
• 27:51
  Speaker 2: or North American supply chain now? I mean, has everything
• 27:54
  Speaker 2: been figured out that was all stopped up over the
• 27:57
  Speaker 2: last couple of years of the pandemic.
• 28:00
  Speaker 10: I don't think there's anything that's been smooth about the
• 28:03
  Speaker 10: last few years.
• 28:04
  Speaker 2: If you go from but we are we back to
• 28:07
  Speaker 2: normal now, is what I'm wondering.
• 28:10
  Speaker 10: You're seeing inventory levels at much stronger levels than what
• 28:14
  Speaker 10: they were last year. So if you go to last
• 28:16
  Speaker 10: year and retailing e commerce specifically, customers were talking to
• 28:20
  Speaker 10: us about destocking their inventory, and we're having conversations now
• 28:24
  Speaker 10: of how they are restocking their inventory and continuing to
• 28:28
  Speaker 10: get it out to the end consumer, and we're a
• 28:30
  Speaker 10: great choice for them to be able to use for that.
• 28:32
  Speaker 1: Who do you compete against, Drew, Who's share are you
• 28:35
  Speaker 1: taking based upon the results you've reported last night? Are
• 28:38
  Speaker 1: you this morning?
• 28:39
  Speaker 10: Yeah, So we take share from everybody. We're not picky
• 28:42
  Speaker 10: on where the share comes from. What we do is
• 28:44
  Speaker 10: we look at the customer as a whole and see
• 28:46
  Speaker 10: where we can provide value and where our service is
• 28:49
  Speaker 10: best fit. And if you think about our top twenty customers,
• 28:52
  Speaker 10: we grew volume with our top twenty customers, which again
• 28:55
  Speaker 10: is some of the biggest brands in the country. We
• 28:57
  Speaker 10: grew volume with them by thirteen per sent on a
• 29:00
  Speaker 10: year of a year basis. So our largest customers come
• 29:03
  Speaker 10: back to us year after year, and they don't just
• 29:05
  Speaker 10: come back to us and award us with what we
• 29:07
  Speaker 10: did the previous year, because we've got great service, because
• 29:10
  Speaker 10: we've got the best technology in the industry, and we've
• 29:13
  Speaker 10: got great operators who know and understand the market, they're
• 29:17
  Speaker 10: rewarding us with more freight.
• 29:19
  Speaker 2: When you look at the future, Drew and you have
• 29:23
  Speaker 2: so much experience with XPO before becoming CEO of RXO,
• 29:28
  Speaker 2: do you see you know, EV trucks, Do you see
• 29:32
  Speaker 2: an automated fleet or how far off is that?
• 29:36
  Speaker 10: It's something where we're talking to EV manufacturers on an
• 29:40
  Speaker 10: ongoing basis right now. I think the one thing that
• 29:43
  Speaker 10: you have to watch is while I do think that
• 29:45
  Speaker 10: you will see EV pick up as a trend, you
• 29:48
  Speaker 10: have to watch to see how long the truck will
• 29:50
  Speaker 10: be able to drive before it has to be charged again.
• 29:53
  Speaker 10: So if you think of average length of haull across
• 29:56
  Speaker 10: across the industry, is you know, plus six hundred mile,
• 30:00
  Speaker 10: you know right now today you would have to stop
• 30:03
  Speaker 10: and recharge before reaching your destination. And so I think
• 30:06
  Speaker 10: the end state whenever you're able to have a truck
• 30:10
  Speaker 10: drive further operating hours and be able to go from
• 30:14
  Speaker 10: shipper to constantee and deliver that that's the end state
• 30:17
  Speaker 10: of where we're going. But on short hauls, I think
• 30:19
  Speaker 10: that it's something that you're going to see in the
• 30:21
  Speaker 10: near term.
• 30:22
  Speaker 1: It's true give us the latest on kind of the
• 30:24
  Speaker 1: labor piction picture within the logistics pipeline in the United States.
• 30:28
  Speaker 1: You know, whether it's the truckers or or some of
• 30:31
  Speaker 1: the other pieces of the puzzle, because a lot of
• 30:33
  Speaker 1: the trucks are saying, boy, it's always hard to maintain
• 30:35
  Speaker 1: and keep our drivers, but it's been even harder over
• 30:38
  Speaker 1: the last several years.
• 30:39
  Speaker 4: Help.
• 30:39
  Speaker 1: Is that still a big, big issue for you and
• 30:41
  Speaker 1: your customers.
• 30:43
  Speaker 10: Yeah, all of last year we saw capacity coming into
• 30:46
  Speaker 10: the market, and so the first quarter was really the
• 30:48
  Speaker 10: first time that we saw capacity exit the market. And
• 30:53
  Speaker 10: for our business, that's actually a good thing because anytime
• 30:55
  Speaker 10: there are shifts in the market, customers are going to
• 30:58
  Speaker 10: lean on carriers who they trust the most and that's
• 31:01
  Speaker 10: been us. So as you start to see the load
• 31:03
  Speaker 10: to truck ratio increase over time, what you'll see is
• 31:07
  Speaker 10: you'll see tender rejection start to pick up from asset
• 31:11
  Speaker 10: based carriers. And that's where a company like RXO can
• 31:14
  Speaker 10: come in and be a big winner.
• 31:16
  Speaker 1: So when you talk to your customers, when you talk
• 31:19
  Speaker 1: to your transportation partners, what's their view of the economy
• 31:22
  Speaker 1: over the next twelve to eighteen months.
• 31:24
  Speaker 10: I think there's still a lot of uncertainty on the
• 31:27
  Speaker 10: macro economy as a whole, and so as you start
• 31:30
  Speaker 10: to look into the back half of the year, there
• 31:33
  Speaker 10: are some encouraging signs for US. I talked earlier about
• 31:36
  Speaker 10: retail and e commerce inventory levels picking up. We've seen
• 31:39
  Speaker 10: pickups in healthcare and technology and home furnishing as verticals.
• 31:44
  Speaker 10: So there are some encouraging signs. And I just talked
• 31:46
  Speaker 10: about capacity exiting the market. That's again that's actually a
• 31:51
  Speaker 10: good thing for our business at this point in the cycle.
• 31:54
  Speaker 10: So there are some encouraging signs, but I don't think
• 31:56
  Speaker 10: that anybody's got the crystal ball to when they can
• 31:59
  Speaker 10: point to when this market and inflection will be, whether
• 32:01
  Speaker 10: it's Q three, Q four, Q one.
• 32:03
  Speaker 1: All right, Really appreciate getting some of your time. Drew
• 32:05
  Speaker 1: Wilkelson Wilkerson, he's the CEO of RXO. The ticker is
• 32:09
  Speaker 1: our XO. Pop that in your terminal and you can
• 32:11
  Speaker 1: see the stocks up eight point three percent today. They
• 32:14
  Speaker 1: reported some better than expected results this morning in the
• 32:17
  Speaker 1: market reacting favorably to that. So love talking to the
• 32:20
  Speaker 1: folks into the logistics business in the supply chain issue
• 32:24
  Speaker 1: that was such a big issue starting with the pandemic
• 32:26
  Speaker 1: and maybe getting a little bit more back to normal.
• 32:29
  Speaker 5: You're listening to the tape Can's our live program Bloomberg
• 32:32
  Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the
• 32:36
  Speaker 5: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
• 32:39
  Speaker 5: You can also listen live on Amazon Alexa from our
• 32:42
  Speaker 5: flagship New York station, Just say Alexa play Bloomberg eleven thirty.
• 32:48
  Speaker 1: Let's get a sense of what to do with these
• 32:50
  Speaker 1: markets here. We're going to get a lot of cross
• 32:52
  Speaker 1: currents out there with Divot, with earnings coming out, with
• 32:55
  Speaker 1: the FED decision today, with some bank uncertainty. Let's get
• 32:59
  Speaker 1: a couple of pros in here. Daviddet's senior investment strategist
• 33:01
  Speaker 1: at Pepack Private Wealth Management, and Tim Courtney, cee IO
• 33:05
  Speaker 1: at Eccential Wealth Advisors join us here. Let's talk. Let's
• 33:09
  Speaker 1: start with you, Tim, what are you telling your clients
• 33:12
  Speaker 1: here in a very uncertain time after coming out of
• 33:15
  Speaker 1: a brutal twenty twenty two in terms of equities and debt?
• 33:18
  Speaker 1: What are you telling your clients these days?
• 33:21
  Speaker 11: Yeah, you know, what we've been saying is just kind
• 33:24
  Speaker 11: of the simple message of continue to diversify, and you know,
• 33:29
  Speaker 11: we are still working through so many distortions of historic proportions.
• 33:35
  Speaker 11: In twenty twenty and twenty twenty one, coming off of
• 33:37
  Speaker 11: those zero rates, you had capital labor flowing into areas.
• 33:42
  Speaker 11: You've got capital moving back out of those and labor
• 33:44
  Speaker 11: moving back out of those areas. So many distortions, it's
• 33:48
  Speaker 11: hard to just be able to make sense of how
• 33:53
  Speaker 11: the market is readjusting to to more normal times with
• 33:57
  Speaker 11: normal rates. And so we're saying, look, there's lots of
• 34:01
  Speaker 11: discounts out there. The market appears to be pricing in
• 34:05
  Speaker 11: some troubles for small caps international value stocks. That's typically
• 34:10
  Speaker 11: what you would see going into some slowdowns or potentially recession.
• 34:14
  Speaker 11: The market has already discounted those. In some cases, small
• 34:18
  Speaker 11: caps are trading about thirty percent lower than their twenty
• 34:21
  Speaker 11: year average, and so it's okay to go get some
• 34:24
  Speaker 11: exposure there. Own some small caps, own some international stocks
• 34:28
  Speaker 11: as well as some of the larger growth stocks, which
• 34:31
  Speaker 11: should see their way through a recession, you know, in
• 34:34
  Speaker 11: a better way.
• 34:35
  Speaker 2: Are you not terribly concerned about a recession? A lot
• 34:38
  Speaker 2: of people coming on this program say they expect a
• 34:41
  Speaker 2: recession to be short and shallow. Nonetheless, you know that,
• 34:44
  Speaker 2: you know, it could be worse, especially if we continue
• 34:46
  Speaker 2: to get bank runs.
• 34:49
  Speaker 11: Yeah, you know, the story on the recession has gone
• 34:52
  Speaker 11: back and forth. At the beginning of the year, it
• 34:54
  Speaker 11: was we're definitely going into recession, and then we had
• 34:57
  Speaker 11: strong numbers in February and it was, well, we can
• 35:00
  Speaker 11: avoid it, and then we had the bank failures, and
• 35:02
  Speaker 11: now we're back into Okay, we're definitely going into recession.
• 35:05
  Speaker 11: You know, I'm not so sure this recession, if it
• 35:10
  Speaker 11: comes this year. I do also think it's likely to
• 35:14
  Speaker 11: be shorter and probably lighter, just because there is so
• 35:19
  Speaker 11: much capital out there still. Even with the housing gains,
• 35:22
  Speaker 11: the stock gains, even though we pulled back in twenty two,
• 35:25
  Speaker 11: stocks are still hugely higher from where they were just
• 35:28
  Speaker 11: a few years ago. So there's a lot of wealth,
• 35:31
  Speaker 11: a lot of dollars out there, and just anecdotally, there's
• 35:35
  Speaker 11: still a lot of spending and we're seeing that in
• 35:37
  Speaker 11: earnings come through. Earnings are coming through, Okay, So I
• 35:41
  Speaker 11: think that it likely will be a little bit lighter
• 35:45
  Speaker 11: than a deep recession, and it's priced in in a
• 35:47
  Speaker 11: lot of areas.
• 35:48
  Speaker 1: Hey, David You've been at this game a long time. Here,
• 35:52
  Speaker 1: how do you put all this together? We've got a
• 35:53
  Speaker 1: FED decision today, We've got some turmoil slash crisis in
• 35:57
  Speaker 1: the bank space, and you know, right in the midst
• 35:59
  Speaker 1: of earnings, what are you telling your clients here?
• 36:02
  Speaker 12: Well, you know, it all comes down to the time horizon.
• 36:06
  Speaker 12: I mean, if you've got a time horizon that goes
• 36:09
  Speaker 12: past the end of this week, I think there's a
• 36:11
  Speaker 12: lot of great places to put your money to work.
• 36:14
  Speaker 12: I mean, let's look at some of the big advantages.
• 36:17
  Speaker 12: One is, you've got a market that's eighteen percent off
• 36:20
  Speaker 12: of it's all time high. You know, we've always come
• 36:23
  Speaker 12: back to that. You know, is that going to be
• 36:25
  Speaker 12: this year? Probably not. If that's in three years, that
• 36:28
  Speaker 12: looks pretty good relative to stuff and your money under
• 36:30
  Speaker 12: the mattress. We know the FED is probably going to
• 36:33
  Speaker 12: raise today. What's it going to do going forward? We
• 36:36
  Speaker 12: do know it's close to finishing its work. We do
• 36:38
  Speaker 12: know that inflation has come down dramatically since last summer,
• 36:42
  Speaker 12: and that's been one of the big problems that the
• 36:44
  Speaker 12: FED is reacting to. The economy is staying reasonable. We've
• 36:47
  Speaker 12: just got a nice report coming out of ADP with
• 36:50
  Speaker 12: far more jobs created in the private sector than we expected.
• 36:53
  Speaker 12: We still have positive job gration, So I think buying
• 36:56
  Speaker 12: stocks for the long term still makes sense here, but
• 36:59
  Speaker 12: we would avoid some of the megacap tech stocks, which
• 37:03
  Speaker 12: have accounted for close to eighty percent of the games
• 37:05
  Speaker 12: this year, and anything that's touting AI be very cautious.
• 37:08
  Speaker 2: Wait, I thought, first of all, that's that's well said. Yeah,
• 37:12
  Speaker 2: that's something that we're going to clip and probably use
• 37:15
  Speaker 2: in commercials from now on. With the what about Amazon?
• 37:17
  Speaker 2: I thought you liked Amazon and they're a megacap tech stock.
• 37:21
  Speaker 12: And I love the fact that it fell after a
• 37:23
  Speaker 12: better than expected earnings report because they said it didn't
• 37:27
  Speaker 12: make a convincing AI case. I think they're just being honest.
• 37:31
  Speaker 12: But you know, here's the thing. You've got the two
• 37:35
  Speaker 12: best businesses on the planet. One is cloud, the other
• 37:39
  Speaker 12: is e commerce. We know that those businesses are going
• 37:42
  Speaker 12: to be growing double digit rates for as far as
• 37:44
  Speaker 12: you can look out into the future. We know they're
• 37:47
  Speaker 12: number one in both by the cloud, they're double the
• 37:49
  Speaker 12: size of Microsoft. We also know that Amazon is down
• 37:54
  Speaker 12: forty five percent frons high, So you're not buying it
• 37:57
  Speaker 12: at a peak. You know what I love here is
• 37:59
  Speaker 12: Amazon's trade about two times sales, or you can buy
• 38:02
  Speaker 12: Microsoft eleven time sales. Amazon's got the better cloud business,
• 38:07
  Speaker 12: and you're paying about one fifth as much. Amazon's even
• 38:10
  Speaker 12: trained less for eBay, who has the better e commerce site.
• 38:14
  Speaker 2: Compelling valuation there for a lot of folks, that's for sure.
• 38:17
  Speaker 2: Amazon's the answer to David's question.
• 38:18
  Speaker 1: I think that is, Hey, hey, Tim, are there sectors?
• 38:21
  Speaker 1: Are there areas where you're saying to your clients, let's
• 38:24
  Speaker 1: put a little put some chips on the table here,
• 38:27
  Speaker 1: you know, whether it's an equity so or fixed income?
• 38:31
  Speaker 11: Yeah, yeah, well, you know, I I don't know that
• 38:35
  Speaker 11: there's any any specific areas. There are some areas that
• 38:39
  Speaker 11: we probably would avoid, you know, when you're looking on
• 38:43
  Speaker 11: the fixed income side, you know, with spreads being still
• 38:47
  Speaker 11: really narrow, really compressed, there are some areas that just
• 38:52
  Speaker 11: don't the risk reward doesn't look like they make sense,
• 38:55
  Speaker 11: you know, owning some higher yield bonds, some riskier bonds,
• 38:59
  Speaker 11: you know, going into a recession or a potential recession,
• 39:03
  Speaker 11: even if it's light you it probably doesn't make sense
• 39:06
  Speaker 11: to get you know, slightly higher yields from there, if
• 39:08
  Speaker 11: you're going to take on that risk, you know, you
• 39:11
  Speaker 11: might just consider going into equities instead with with higher upsides.
• 39:15
  Speaker 11: So we're we're we're looking to avoid some of the areas.
• 39:18
  Speaker 11: I would agree with, you know, the comment that some
• 39:22
  Speaker 11: of the megacaps look a little expensive. You know, you
• 39:25
  Speaker 11: may not want to overweight there. The market is certainly
• 39:27
  Speaker 11: overweighted in the megacap the space, and so you know,
• 39:32
  Speaker 11: maybe you didn't want to take a full weight there,
• 39:34
  Speaker 11: but otherwise, you know, I think, just broadly, now that
• 39:38
  Speaker 11: that rates are higher and things have more normalized, you know,
• 39:42
  Speaker 11: outside of those few areas maybe where the risk returned
• 39:45
  Speaker 11: doesn't line up, I think getting exposure in most broad
• 39:47
  Speaker 11: asset classes, including you know, including real assets like commodities
• 39:52
  Speaker 11: in real estate. Real estate had a really poor year
• 39:54
  Speaker 11: last year. It's still risky, but there's with with rates higher,
• 39:59
  Speaker 11: you could look to put some money into real estate
• 40:02
  Speaker 11: in those areas as well.
• 40:03
  Speaker 2: David, you like Alexandria real Estate Equities. What is that company?
• 40:09
  Speaker 2: AARI is the ticker.
• 40:11
  Speaker 12: Absolutely so it's the only pure play in office space
• 40:15
  Speaker 12: for the biotech industry, and I think that makes more
• 40:19
  Speaker 12: sense than conventional office space for less of lawyers and
• 40:22
  Speaker 12: accounts because you know you're just not going to work
• 40:25
  Speaker 12: from home for your lab work. The companies that have
• 40:30
  Speaker 12: about forty percent from the start of the year four
• 40:32
  Speaker 12: percent dividend yield, it's a unique property that I think
• 40:35
  Speaker 12: can rebound here.
• 40:35
  Speaker 1: Okay, David Deets, we appreciate it. Tim Courtney appreciate as well.
• 40:38
  Speaker 1: Getting the latest on these markets.
• 40:40
  Speaker 5: You're listening to the tape cats our live program Bloomberg
• 40:44
  Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the
• 40:47
  Speaker 5: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
• 40:51
  Speaker 5: You can also listen live on Amazon Alexa from our
• 40:53
  Speaker 5: flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
• 41:01
  Speaker 1: Some news out in the pharma space today Lily drug
• 41:05
  Speaker 1: slows Alzheimer's disease and final stage study UH shares of
• 41:10
  Speaker 1: Eli Lellyer up six point five percent today. In part
• 41:13
  Speaker 1: on that news, we want to get the latest on
• 41:14
  Speaker 1: what that means for Lily, what it means for the
• 41:16
  Speaker 1: space and all things pharmas we do that with Sam Fizzelli.
• 41:20
  Speaker 1: He is the head of European Research and he is
• 41:22
  Speaker 1: a pharmaceutical analyst at Bloomberg Intelligence based in London. God
• 41:26
  Speaker 1: knows where he is in any given day, but he
• 41:28
  Speaker 1: is based in London. So Sam, talk to us about
• 41:30
  Speaker 1: this fit this farmer news from Eli Lilly. What's it
• 41:33
  Speaker 1: mean for Lily and for this disease?
• 41:37
  Speaker 6: Hey, Paul, I'm actually sitting in the studio in lod Yes,
• 41:40
  Speaker 6: there we go, so so based on in the in
• 41:42
  Speaker 6: the in the mothership. So look, any positive news for
• 41:48
  Speaker 6: this devastating disease has to be taken positive. You know,
• 41:53
  Speaker 6: it is no question that we need drugs for treating
• 41:56
  Speaker 6: this curse that's going to be at some point, hopefully
• 42:00
  Speaker 6: not affecting you and I, but somebody close to us potentially.
• 42:04
  Speaker 6: So the question, however, is well, how good is this
• 42:08
  Speaker 6: data and how does it set up Lily compared to
• 42:10
  Speaker 6: the competition. Well, it certainly gives Lily an opportunity to
• 42:14
  Speaker 6: play in the in the to be a contributor in
• 42:17
  Speaker 6: this business, and that that that is going to be
• 42:20
  Speaker 6: a positive, There's no question about that. But how much
• 42:23
  Speaker 6: you know, you look at the efficacy that they reported,
• 42:26
  Speaker 6: it's not that different to another drug that we talked
• 42:28
  Speaker 6: about just about a year ago as the data was
• 42:30
  Speaker 6: rolling out, and that was biogens the Camby now that's
• 42:34
  Speaker 6: on the market. So twenty nine percent reduction in the
• 42:39
  Speaker 6: speed of decline versus twenty seven percent for the Camby
• 42:43
  Speaker 6: different trials. But that's what we're seeing. The issue we
• 42:46
  Speaker 6: have and the worry I have, is that the Lily
• 42:49
  Speaker 6: drug has higher side effects. There's a particular side effect
• 42:53
  Speaker 6: that they look at in for Azhonma's patients and it
• 42:56
  Speaker 6: seems to have not exactly not quite double, but it
• 42:59
  Speaker 6: seems to have quite a higher rate of that particular
• 43:02
  Speaker 6: side effect, and that's something that worries me about its commercial.
• 43:04
  Speaker 2: Wait, what's the side effect?
• 43:07
  Speaker 6: So what you get with these drugs, with all of
• 43:09
  Speaker 6: them is something called amyloid related imaging abnormality ARIA. Yeah,
• 43:16
  Speaker 6: and a lot of them are exactly just that you
• 43:18
  Speaker 6: scan the brain and you find these weird dots around it,
• 43:22
  Speaker 6: and that's being called ARIA. Some of them cause inflammation,
• 43:26
  Speaker 6: real inflammation, and unfortunately there is a version of it
• 43:28
  Speaker 6: where there's little hemorrhages. Now that doesn't sound good, right, So,
• 43:33
  Speaker 6: and that's what you want to try and avoid. Now,
• 43:35
  Speaker 6: the Kenby has a much lower percentage of patients who
• 43:39
  Speaker 6: suffer the hemorrhage type aria h than the data that
• 43:43
  Speaker 6: we've seen from dunanamap from Lily. So that's the question
• 43:47
  Speaker 6: that I think a lot of physicians are going to
• 43:49
  Speaker 6: be asking, how good is the efficacy? And am I
• 43:52
  Speaker 6: going to be wanting to put my patients through this
• 43:54
  Speaker 6: given that they're going to you know, these are elderly
• 43:57
  Speaker 6: patients already, if they get these side effects of what
• 43:59
  Speaker 6: we have going to manage.
• 44:00
  Speaker 1: It, Sam, What are the folks in the medical community,
• 44:03
  Speaker 1: the scientific community, what do they believe is the realistic
• 44:07
  Speaker 1: I guess ultimate treatment of Alzheimer's.
• 44:11
  Speaker 6: You know, Paul, it's just pretty much like cancer. I
• 44:13
  Speaker 6: think if you think about it, the biology is multifaceted.
• 44:18
  Speaker 6: There are many things that are going wrong in the brain.
• 44:21
  Speaker 6: And remember, by the time you get to the deficits
• 44:24
  Speaker 6: in memory and cognition, you've had this disease developing for
• 44:28
  Speaker 6: ten years, fifteen years. So what everybody's trying to do
• 44:31
  Speaker 6: is to go as early as possible, identify markers, and
• 44:35
  Speaker 6: find treatments that have side effects that you can manage
• 44:38
  Speaker 6: for somebody who's going to get treated for ten years,
• 44:41
  Speaker 6: but also gives really seriously slows down the risk of
• 44:44
  Speaker 6: you developing that later Alzheimer's. That's the holy grail. So
• 44:49
  Speaker 6: you know this is in patients that have got some
• 44:52
  Speaker 6: signs of cognitive decline already. We need to get earlier
• 44:55
  Speaker 6: and there are definitely going to be more than one
• 44:58
  Speaker 6: way of doing it and possibly come nations.
• 45:01
  Speaker 2: Why are Lily's drug is called done nanomab and Biogen's
• 45:09
  Speaker 2: drug is add you canomab.
• 45:12
  Speaker 6: And that was the old one it canomap.
• 45:16
  Speaker 2: Or well, the same question, then what's the mab?
• 45:18
  Speaker 1: What are these things?
• 45:19
  Speaker 6: The maps? The maps are antibodies, so basically they are
• 45:22
  Speaker 6: biological biologicals I either manufactured, you have them in your blood.
• 45:28
  Speaker 6: You know when you got your vaccine for COVID. A
• 45:30
  Speaker 6: lot of the action against the virus initially when the
• 45:33
  Speaker 6: virus enters your body is done by antibodies. They are
• 45:36
  Speaker 6: highly specific. They're buying to one particular tiny little area
• 45:39
  Speaker 6: on a cell or a protein or whatever it is
• 45:43
  Speaker 6: and deactivate it. And that's what their job is, I mean,
• 45:46
  Speaker 6: really really making it a lot simpler than biology.
• 45:49
  Speaker 2: Does we need you to do that?
• 45:52
  Speaker 6: So that's what this is. You injected and of course
• 45:54
  Speaker 6: what you're doing here is injecting it into the blood
• 45:56
  Speaker 6: stream and then hoping that a bunch of it gets
• 45:58
  Speaker 6: into the brain. Of course, the brain is very privileged.
• 46:01
  Speaker 6: It's protected from your bloodstream because we put a lot
• 46:03
  Speaker 6: of stuff in our blood stream.
• 46:05
  Speaker 2: Unfortunately, but so certainly ideal goodness. This is this still
• 46:10
  Speaker 2: an attack on the plaque. This is a simple idea
• 46:13
  Speaker 2: that I have found easy to understand that there's some
• 46:16
  Speaker 2: kind of plaque that forms around our synapses or something
• 46:19
  Speaker 2: like that, and that that's the Alzheimer's problem, and we
• 46:23
  Speaker 2: need to get that plaque away, just like we do
• 46:24
  Speaker 2: when we're kind of brushing our teeth.
• 46:26
  Speaker 6: Right, I thought you said your knowledge was elementary.
• 46:28
  Speaker 1: That was pretty they impressed me.
• 46:29
  Speaker 6: There, Yeah, I'm well done. Absolutely right, These things begin
• 46:33
  Speaker 6: to form in brains. Not everybody who dies and has
• 46:37
  Speaker 6: a brain looked at and has got plaques actually got Alzheimer's.
• 46:41
  Speaker 6: That's one of the problems. Only some people do so
• 46:44
  Speaker 6: at least what we know here now, two trials, two
• 46:47
  Speaker 6: drugs that lower plaques have been able to produce some efficacy.
• 46:52
  Speaker 6: We need to push that boundary that bar higher and
• 46:54
  Speaker 6: higher and higher.
• 46:55
  Speaker 1: And Sam, is this something in the next few years
• 46:58
  Speaker 1: or is this kind of like cancer or there really
• 47:00
  Speaker 1: isn't any kind of light at the end of the tunnel.
• 47:03
  Speaker 6: Maybe Yeah, I mean, I think with Alzheimer's we're going
• 47:06
  Speaker 6: to end up having the same sort of situation where
• 47:09
  Speaker 6: you're getting a thirty percent reduction in the decline. Remember,
• 47:12
  Speaker 6: this is not as stopping, although in some people it
• 47:15
  Speaker 6: probably will so if you're one of those lucky people,
• 47:18
  Speaker 6: But this is reducing the rate to decline. And what
• 47:21
  Speaker 6: you want to do is take that from twenty nine
• 47:23
  Speaker 6: percent to forty percent to fifty percent to sixty percent
• 47:26
  Speaker 6: and if you're lucky tow one hundred percent. So that
• 47:28
  Speaker 6: and without side effects. Of course, as I said that,
• 47:30
  Speaker 6: that's rarely going to be the outcome, but that's what
• 47:33
  Speaker 6: people are working on different mechanisms.
• 47:35
  Speaker 11: Here.
• 47:35
  Speaker 6: We are attacking plaque. Should we attack another molecule in
• 47:39
  Speaker 6: the brain called TAW. People are trying that. Should we
• 47:42
  Speaker 6: go after the inflammation that these things cause? People are
• 47:45
  Speaker 6: trying that. It would be a long long way, But
• 47:48
  Speaker 6: I'm optimistic that with these little wins we're going to
• 47:51
  Speaker 6: be able to see a better upsidey.
• 47:54
  Speaker 1: So investing in farmers stocks, Sam, I'm just looking at
• 47:57
  Speaker 1: kind of the trailing twelve month performance of some these
• 48:01
  Speaker 1: on in. You know, I got Lily up fifty percent.
• 48:03
  Speaker 1: That's great, it's fifty two week high. But nobody else
• 48:05
  Speaker 1: is really doing I guess Murkers up forty percent. But
• 48:08
  Speaker 1: is it You can't just say I'm going long Farmer,
• 48:10
  Speaker 1: can It's really company by company, drug by drug.
• 48:14
  Speaker 6: Well, Macro has has done that. I mean, you know,
• 48:17
  Speaker 6: as we had recession coming and worries about interest rate
• 48:21
  Speaker 6: rises and worries, and you know, the defensive the defensive
• 48:24
  Speaker 6: play is farma. So one of the defensive plays is farmer.
• 48:28
  Speaker 6: So so you can you can pile into some etf
• 48:31
  Speaker 6: or some form of a basket. But as you rightly say,
• 48:36
  Speaker 6: there are some who've done phenomenally well and over in
• 48:38
  Speaker 6: Europe you'll see that nova notice kids. But Lily has
• 48:40
  Speaker 6: been one of the best performer. They had many things
• 48:44
  Speaker 6: going right for them, and it's been a fantastically well
• 48:47
  Speaker 6: managed story in the past three or four or five years.
• 48:50
  Speaker 6: As their pipeline has evolved, their margins got better, and
• 48:53
  Speaker 6: of course these drugs hit. You just keep adding to
• 48:56
  Speaker 6: that baseline of of your salesforce and you keep pushing
• 49:00
  Speaker 6: that revenue up and hopefully your margin up. So and
• 49:03
  Speaker 6: in the meantime, you treat people, I mean, how can
• 49:07
  Speaker 6: you be in a better business.
• 49:08
  Speaker 2: And well, people who pay a heck of a lot
• 49:11
  Speaker 2: for your drugs here and far less everywhere else. Is
• 49:15
  Speaker 2: that the case? Do we Americans subsidize the rest of
• 49:17
  Speaker 2: the world in terms of drug prices?
• 49:19
  Speaker 6: Yeah? But then you do you do? And the problem
• 49:23
  Speaker 6: the difference therefore, is that US has usually got access
• 49:27
  Speaker 6: to first to drugs first year, two years, three years,
• 49:31
  Speaker 6: four years ahead of other countries. So the patients are
• 49:35
  Speaker 6: reaping the benefit, and a lot of the industry, and
• 49:38
  Speaker 6: the biotech industry is based out of there. That's jobs.
• 49:42
  Speaker 6: So look, I'm not defending prices. This is not our
• 49:44
  Speaker 6: what I'm doing here. There are probably some prices that
• 49:47
  Speaker 6: should be lower, absolutely, but the system has so many
• 49:51
  Speaker 6: middle men in it that need to be sorted out.
• 49:52
  Speaker 6: And you know that some of the of the politicians
• 49:55
  Speaker 6: are going after the PBMs, so many this is the
• 49:58
  Speaker 6: pharmacy benefit maledges. So many middlemen that that just death
• 50:02
  Speaker 6: needs to be cleaned out and sort it out. But
• 50:04
  Speaker 6: let's just remember, I think Lily's talked about this. The
• 50:07
  Speaker 6: cost of obesity, for example, to the US is a
• 50:09
  Speaker 6: trillion dollars a year. Their estimate. How much would you
• 50:12
  Speaker 6: spend on an obesity reducing drug if you could cut
• 50:15
  Speaker 6: that by half?
• 50:16
  Speaker 2: Oh yeah, I'm all in because as soon as I
• 50:19
  Speaker 2: get that obesie reduction drug, I'm gonna go get a
• 50:22
  Speaker 2: root beer float.
• 50:23
  Speaker 1: You know, we can eat.
• 50:24
  Speaker 2: Anything we want, never exercise, and still say skinny.
• 50:28
  Speaker 5: Yeah.
• 50:28
  Speaker 2: Well no, thank you so much pharmacy industry.
• 50:32
  Speaker 1: Sam's gonna push back on that, all right, Sam, thanks
• 50:34
  Speaker 1: so much for joining us. Always appreciate checking in with you.
• 50:36
  Speaker 1: Sam Fazzelli, Folks, he runs the research business for Bloomberg
• 50:40
  Speaker 1: Intelligence over in Europe. He's got like, I know, one
• 50:42
  Speaker 1: hundred people reporting to him, and he's also the top
• 50:44
  Speaker 1: pharmaceutical analyst in the city of London, so we appreciate
• 50:48
  Speaker 1: getting some of his time. So he's there doing all
• 50:50
  Speaker 1: that for Bloomberg Intelligence. He's based out of London, but
• 50:52
  Speaker 1: we never really know where he is. He's always traveling
• 50:54
  Speaker 1: all over the place.
• 50:56
  Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
• 50:59
  Speaker 2: subscribe and listen to interviews on Apple Podcasts or whatever
• 51:03
  Speaker 2: podcast platform you prefer.
• 51:04
  Speaker 1: I'm Matt Miller.
• 51:06
  Speaker 2: I'm on Twitter at Matt Miller nineteen seventy three, and
• 51:09
  Speaker 2: I'm Faull Sweeney. I'm on Twitter at pt Sweeney Before
• 51:12
  Speaker 2: the podcast. You can always catch us worldwide at Bloomberg
• 51:15
  Speaker 2: Radio