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US Consumer Sentiment Rises For First Time in Five Months · Bloomberg Intelligence

0:02
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
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Speaker 3: Let's get more on you Mish my favorite indicator. Joanshu Is,
0:28
Speaker 3: University of Michigan, Surveys of Consumer Director breaking down these
0:32
Speaker 3: numbers for us, Joanne, it feels like it's a non mover. Really,
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Speaker 3: like everything is status quo. Can you walk me through
0:38
Speaker 3: what you see in these numbers? Absolutely so.
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Speaker 4: Overall it is essentially flat from last from last month. However,
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Speaker 4: that does obscure some pretty substantial movements within the population.
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Speaker 3: First of all, you know, election news has.
0:51
Speaker 4: Been really dominating the headlines, and we see that in
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Speaker 4: our data. Sentiment for Democrats improved six percent this month,
0:58
Speaker 4: but this ended up being offset by a five decline
1:01
Speaker 4: for Republicans. And these movements were entirely in expectations, which
1:07
Speaker 4: is sensible given that you know, election developments. Kamala Harris
1:10
Speaker 4: becoming the new nominee for the Democrats is not something
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Speaker 4: that affects current assessments, But is something that affects people's
1:17
Speaker 4: outlook for the future, and.
1:19
Speaker 5: How can we expect that to evolve as we get
1:21
Speaker 5: closer to the election.
1:22
Speaker 6: Since we are still only in mid August.
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Speaker 4: It's going to be volatile, or that's what I would expect.
1:27
Speaker 4: So far, consumers are really folding in who they think
1:31
Speaker 4: is going to win the election. But of course, as
1:33
Speaker 4: the campaign season evolves, people's expectations for the election are
1:37
Speaker 4: going to change, and as such their their future expectations
1:41
Speaker 4: for the macroeconomy will as well.
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Speaker 3: What are some of the other things that you noticed,
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Speaker 3: just in terms of either future expectation or current conditions,
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Speaker 3: I should say which did improve?
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Speaker 4: Yeah, current conditions really didn't move much at all, and
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Speaker 4: if anything, it edged down just a little bit. Consumers
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Speaker 4: continue to be very frustrated by hype prices that continues
2:01
Speaker 4: to be top of mind. At the same time, consumers
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Speaker 4: do expect inflation to continue stabilizing. They've been already. They
2:08
Speaker 4: weren't really reacting to a CPI print or any data
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Speaker 4: that came out this month. They were really already folding
2:14
Speaker 4: in their experiences throughout the month, their own experiences shopping
2:19
Speaker 4: and seeing the prices around them.
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Speaker 5: And just looking at the report, so we see thirty
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Speaker 5: five percent respondents expect unemployment rate to rise in the
2:26
Speaker 5: coming year. Growing number expect interest rates to pull back.
2:30
Speaker 5: How does that kind of impact consumer sentiment and kind
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Speaker 5: of where we could be in the coming months.
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Speaker 4: So consumers aren't really that concerned right now that labor
2:39
Speaker 4: markets may be softening. So the thirty five percent expecting
2:42
Speaker 4: unemployment rates to go up, that's unchanged from last month,
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Speaker 4: So that's pretty stable. Income expectations have edged up, improved
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Speaker 4: just a little bit, or have gone sideways. There's no
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Speaker 4: weakening in consumer views of labor markets in August. That
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Speaker 4: being said, strength and labor markets is precisely It has
3:00
Speaker 4: supported robust consumer spending over the last two years in
3:04
Speaker 4: spite of the fact that consumers don't feel like they're thriving.
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Speaker 4: And so if there is some unraveling in labor markets,
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Speaker 4: some softening in labor markets, I would expect consumers to
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Speaker 4: pull back.
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Speaker 3: All right, Joan, that being yeah, oh no, finish up. Sorry, yeah.
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Speaker 4: And part of the reason why that consumers I think
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Speaker 4: feel some confidence about labor markets is that they do
3:22
Speaker 4: expect interest rates to come down in the year ahead.
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Speaker 3: Which leads us right back to the FED. Hey, Joanne,
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Speaker 3: we do appreciate it, thank you very much. Joining to
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Speaker 3: the University of Michigan Surveys of Consumer Director. Joining us
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Speaker 3: on those numbers, A sentiment came in a touch better,
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Speaker 3: current conditions a touch flower, and expectations a touch higher
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Speaker 3: as well.
3:40
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3:59
Speaker 3: All right, let's get in here now and talk about
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Speaker 3: how you think about these markets after the volatility that
4:04
Speaker 3: we've seen the last couple weeks. But if you went
4:06
Speaker 3: on vacation two weeks ago and came back now, you
4:08
Speaker 3: didn't really miss much at the end of the day,
4:10
Speaker 3: which is also kind of crazy. Shana Sissel joins us.
4:13
Speaker 3: She's president and CEO of Benri owned Capital Management, and
4:17
Speaker 3: she joins us, Now, Shana, isn't that funny two weeks ago.
4:20
Speaker 3: It's like it never happened. I mean, that kind of
4:22
Speaker 3: rebound in the S and P is quite striking. How
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Speaker 3: does that set you up now for the next couple months.
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Speaker 7: I always say the best thing we can do for
4:30
Speaker 7: clients sometimes is maybe take away their password to their
4:33
Speaker 7: brokerage accounts so they're not checking it every day, because
4:36
Speaker 7: if they didn't, they would sleep a lot better at
4:38
Speaker 7: night for that exact reason. The market has short memory
4:43
Speaker 7: these days because we have so much information out there
4:46
Speaker 7: in the twenty four hour news cycle. But I think
4:48
Speaker 7: the volatility, you know, Professor Siegel was on another network
4:53
Speaker 7: earlier this week taking back everything he said when the
4:56
Speaker 7: panic set in, and if the professionals that but you know,
5:01
Speaker 7: investors look to for guidance, are inclined to panic, I
5:07
Speaker 7: think that that says a lot about kind of the
5:09
Speaker 7: overall sentiment and psychology of the market right now. So
5:15
Speaker 7: it doesn't surprise me that, you know, as information became available,
5:18
Speaker 7: people stopped freaking out about the end carry trade. But
5:21
Speaker 7: it doesn't change the fact that we are in a
5:23
Speaker 7: slowing economy. We've had good data, and so I think
5:28
Speaker 7: people feel confident the FED is definitely going to cut
5:30
Speaker 7: twenty five basis points in September, and I think that
5:34
Speaker 7: if you are a long term investor that there's some
5:38
Speaker 7: opportunities when people freak out like that to take advantage of,
5:42
Speaker 7: you know, the psychology of the market and buy things
5:45
Speaker 7: at a discount.
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Speaker 5: Shanna Jackson Hole next week, What are you looking for
5:49
Speaker 5: from j Powell? What can you say that can either
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Speaker 5: reinforce the view that we're going to get a twenty
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Speaker 5: five if not a fifty basis point cut, or could
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Speaker 5: he even kind of throw a wrench into things and
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Speaker 5: maybe push that for they're out again.
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Speaker 7: I can't imagine where he's going to throw a wrench
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Speaker 7: in things. I do think that fifty base points is
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Speaker 7: a stretch. There's not enough data that suggests that we
6:12
Speaker 7: need to do a larger than expected cut, and I
6:16
Speaker 7: think the Fed is cautious to not do something so
6:20
Speaker 7: abrupt and significant that it would upset the overall market sentiments.
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Speaker 7: As I've noted a couple of times, does matter, and
6:31
Speaker 7: I expect that he will continue the same narrative that
6:35
Speaker 7: he's had for quite some time, which is that the
6:38
Speaker 7: economy is stable, it's doing okay. That data shows that
6:44
Speaker 7: it's slowing down and softening, but not of concern, and
6:48
Speaker 7: it supports a twenty five base point cut, and I
6:51
Speaker 7: think that's what he'll continue to say. I've watched him
6:55
Speaker 7: long enough now to know that he's not one to
6:57
Speaker 7: like very quickly change his tone. Last time he was
7:01
Speaker 7: out speaking, he was, you know, not necessarily overly dubvish,
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Speaker 7: and I don't expect him to suddenly become overly duvish.
7:09
Speaker 3: Which to be fair, most other ex FRED presidents aren't either.
7:14
Speaker 3: So there's that as well. So we're kind of like
7:16
Speaker 3: wrapping up the earning season. We got some retail that's
7:18
Speaker 3: trickling out obviously in video is going to be a
7:20
Speaker 3: big event at the end of August. But what stocks
7:23
Speaker 3: do you like after we're kind of past the real
7:25
Speaker 3: hump of earning season headed into an election cycle or
7:28
Speaker 3: policy will be very unclear.
7:31
Speaker 7: Yeah, So I have kind of a wide variety of
7:34
Speaker 7: different types of stocks that I like. You know, I
7:38
Speaker 7: like a name like Atlas Holdings, which is Ensure, a
7:43
Speaker 7: commercial insurance firm, followed it for a while since my
7:48
Speaker 7: days at Ariel, and it's a really interesting company with
7:52
Speaker 7: a really unique niche that is trading at a discount
7:56
Speaker 7: and has some relatively attractive upside. Pretty born, it's in financials.
8:01
Speaker 7: You know, so people it's not sexy like in video
8:05
Speaker 7: or any of the AI plays. V RT is an
8:09
Speaker 7: AI play, but it's a second derivative of traditional AI.
8:14
Speaker 7: It's data center cooling, which is really important because in
8:20
Speaker 7: you know, this growing AI demand and more and more
8:24
Speaker 7: people looking to incorporate it, you need greater computing power,
8:28
Speaker 7: and thus you need a lot stronger or a lot
8:31
Speaker 7: more powerful cooling systems, of which v RT can bring
8:35
Speaker 7: to the table. I also like Novartists, which is a
8:38
Speaker 7: healthcare company. So I'm a little all over the place,
8:41
Speaker 7: happy to go down any one of those roads for you.
8:44
Speaker 7: But yeah, I'm trying. I am trying to find ideas
8:47
Speaker 7: outside of what has been the hot trend because you
8:52
Speaker 7: want to get into other areas when you start to
8:55
Speaker 7: see dispersion of returns, which we have seen a little
8:57
Speaker 7: bit of, and you want to take advantage of opportunities
9:01
Speaker 7: to be a stock picker.
9:03
Speaker 5: So yeah, I guess kind of when you look at
9:05
Speaker 5: how you're playing AI. You mentioned Verdev. I covered them
9:07
Speaker 5: when they went public through a spac so you're looking
9:10
Speaker 5: at kind of these derivative plays when you're thinking about
9:12
Speaker 5: implementation of artificial intelligence and who can be the winners
9:15
Speaker 5: or losers.
9:16
Speaker 7: Yeah, that's exactly what I'm doing. I'm someone who's followed
9:20
Speaker 7: and loved in video and been talking about in VideA
9:23
Speaker 7: now for years, and it has served me well. You know,
9:28
Speaker 7: I've made a lot of money for clients and in
9:31
Speaker 7: that stock, and I'm still very much bullish on the stock.
9:35
Speaker 7: I think the trends are very favorable for the long term,
9:37
Speaker 7: and we're still very early in the AI cycle. That said,
9:42
Speaker 7: I don't think it can maintain the growth rate that
9:44
Speaker 7: it's had going forward.
9:46
Speaker 6: Now.
9:46
Speaker 7: One hundred percent growth is still really impressive, but when
9:50
Speaker 7: you were at three hundred percent growth, it it feels
9:53
Speaker 7: a little disappointing. And and so I'm trying to find
9:56
Speaker 7: other ideas that will benefit from AI. Vertiv is one
10:00
Speaker 7: of them. I've talked a little bit about Cisco in
10:03
Speaker 7: the past, and i know they're all in the news
10:05
Speaker 7: with the announcement of their layoffs, but that's another player
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Speaker 7: that has some second derivative exposure in AI as well,
10:13
Speaker 7: and trading very cheaply and obviously making so interesting, unattractive
10:18
Speaker 7: or unpopular decisions internally, but typically those decisions are made
10:25
Speaker 7: to improve overall financial performance. So that's another name, but
10:30
Speaker 7: it's not on my by list. But it isn't another
10:33
Speaker 7: like second derivative play And that's kind of what you
10:36
Speaker 7: have to look at at this point.
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Speaker 3: Heyhana really appreciate it. That's such a great point about Cisco.
10:40
Speaker 3: Shana Sizzel joining us. She's president CEO of Benrionna Capital
10:45
Speaker 3: Management joining us.
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Speaker 3: I'm Alex Steel alongside Bailly Lipschutz. Paul Sweeney is setting
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Speaker 3: himself at the beach today. This is Bloomberg Intelligence Radio.
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Speaker 3: finance and economics through our lens of our Bloomberg Intelligence analysts.
11:13
Speaker 3: They covered two thousand companies and one hundred and thirty
11:16
Speaker 3: industries all around the world. One topic we wanted to
11:19
Speaker 3: tackle today was empox. So the who declared a fast
11:23
Speaker 3: spreading empox outbreak in Africa a global health emergency as
11:27
Speaker 3: the agency seeks to contain the spread of the potentially
11:29
Speaker 3: deadly virus. WHO Director General sounded that alarm at a
11:34
Speaker 3: press conference on Wednesday.
11:36
Speaker 8: WHR has been working on the mpox outbreak in Africa
11:39
Speaker 8: and raising the alarm that this is something that should
11:42
Speaker 8: concern us all. The Emergency Committee met and advised me
11:47
Speaker 8: that in its view, the situation constitutes a publical emergency
11:52
Speaker 8: of international concern joining us.
11:55
Speaker 4: Now.
11:56
Speaker 3: Sam Fazzelli, Bloomberg Intelligence director of Research for Global Industries
11:59
Speaker 3: and senior Forharmaceuticals analyst, is standing by. I hear you're
12:03
Speaker 3: in Bordeaux. I can only assume there's a lot of
12:06
Speaker 3: work happening there.
12:08
Speaker 9: Oh lots, Alex, lots. I haven't moved from this seat
12:11
Speaker 9: for the past seven hours.
12:12
Speaker 3: I mean, he could be telling the truth. Hey, Sam,
12:15
Speaker 3: when I have you? I assume when I heard the
12:18
Speaker 3: Empire's headline, I was like, I gotta get Sam on,
12:22
Speaker 3: give us the basics, like what is it and how
12:25
Speaker 3: dangerous is it?
12:27
Speaker 5: Yeah?
12:28
Speaker 9: So, Alex, I think when the WHO Director General declares
12:32
Speaker 9: these emergencies, it's that that's already quite a significant and
12:38
Speaker 9: important milestone for a disease. And as you know, it
12:41
Speaker 9: has already there's been some an individual in Sweden apparently
12:45
Speaker 9: there's been diagnosed with it. So and as I said
12:48
Speaker 9: all along, infectious diseases are not about a country, they're
12:50
Speaker 9: not about a continent. They spread. That's the job of
12:54
Speaker 9: an infectious agent. So let's remember that as we talked
12:57
Speaker 9: through the rest of this conversation, and what we got
13:00
Speaker 9: here is not quite a replay of what we had
13:03
Speaker 9: two years ago, which was a slightly different version of
13:06
Speaker 9: this monkey pox virus that this is called empox now.
13:11
Speaker 9: And the virus comes in two flavors, Played one Clay
13:14
Speaker 9: two that kind of looks at it's based on its
13:18
Speaker 9: genomic structure, and this particular one is played one, which
13:21
Speaker 9: is normally less but often found. I hadn't you know.
13:29
Speaker 9: The last one was klay two. And this Klaye one
13:32
Speaker 9: has got a major chunk of its genome that's been
13:34
Speaker 9: taken out, and those who study these things have been
13:36
Speaker 9: writing that it has made it more transmissible through not
13:41
Speaker 9: just contact with us, for example, but also through sexual activity,
13:46
Speaker 9: which is not what klayed one previously had, but also
13:51
Speaker 9: just very close contact. So unlike COVID, if you remember,
13:55
Speaker 9: there were stories with COVID where you go into a
13:57
Speaker 9: restaurant and you sit diagonally across twenty thirty feet away,
14:01
Speaker 9: and you still have a risk of catching it because
14:03
Speaker 9: it gets blown around by the air conditioning. I don't
14:07
Speaker 9: think we're at that level with empocs yet. I don't
14:09
Speaker 9: with this particular clade. Won't be I can't be one
14:11
Speaker 9: hundred percent shore, but I don't think it's like that.
14:14
Speaker 9: You still do need the close contact, and that's where
14:16
Speaker 9: we're That's where my knowledge kind of ends at the minute.
14:19
Speaker 9: These viruses do have a nasty habit of bringing surprises
14:23
Speaker 9: to us.
14:23
Speaker 5: Well, Sam, that's my next question would be how quickly
14:26
Speaker 5: can this evolve in what is kind of that look
14:29
Speaker 5: like in terms of similarities or differences to as you
14:33
Speaker 5: mentioned the twenty twenty two empocs or something that's more
14:37
Speaker 5: kind of well not obviously in COVID.
14:40
Speaker 9: Yeah. Yeah, So twenty twenty two, we still had ninety
14:43
Speaker 9: five thousand people who were infected. It did become a
14:45
Speaker 9: major issue in many countries, so let's not forget that.
14:49
Speaker 9: And so far from the last count I heard about,
14:53
Speaker 9: there's been seventeen and a half thousand infections that have
14:55
Speaker 9: been documented in the regions that have reported it. So
15:01
Speaker 9: how far can this go? It all depends on that
15:03
Speaker 9: mode of transmission. It all depends on Remember the days
15:06
Speaker 9: we went from a standard if you want to call it,
15:09
Speaker 9: that coronavirus SARSCOBE two to the omicron variant, which had
15:15
Speaker 9: so many mutations that made it completely invisible to our
15:18
Speaker 9: immune systems, So everybody got another infection round. I'm pretty
15:21
Speaker 9: sure you do recall that last lockdown.
15:24
Speaker 3: I think it was, Oh, definitely remember all that, zam,
15:26
Speaker 3: don't you worry?
15:27
Speaker 1: Yeah, But I.
15:28
Speaker 9: Mean, it just feels like a really weird period of
15:31
Speaker 9: our lives. And so here we have something that if
15:34
Speaker 9: the rules are that it plays with us still the
15:36
Speaker 9: same as before, it does meet close contact, which means
15:40
Speaker 9: you should be able to avoid an infection if you're
15:44
Speaker 9: careful enough. The other elements, of course, is that we
15:47
Speaker 9: do have vaccines that do work. There is a six
15:51
Speaker 9: to seven hundred million stockpile of small pox vaccines around
15:57
Speaker 9: both the older generation and new generation, and there are
16:01
Speaker 9: two of r n A vaccines in development that could
16:03
Speaker 9: be sped up if needed. So we do know that
16:06
Speaker 9: vaccination helps, but it does have a higher mortality rate
16:11
Speaker 9: standard to even the people who get it that are
16:16
Speaker 9: that's not just like elderly people, which was mostly a
16:18
Speaker 9: COVID issue than COVID did.
16:21
Speaker 3: So it can kill more and it can kill all
16:25
Speaker 3: different ranges, not just say the elderly. But we do
16:27
Speaker 3: have the vaccine. What about a treatment.
16:31
Speaker 9: There was a treatment that actually was being studied by
16:36
Speaker 9: a complet called Siga and that just failed in trials
16:39
Speaker 9: only two days ago, and it was being tested in
16:42
Speaker 9: the Congo and it was being against klayte one. But
16:49
Speaker 9: the good, the silver sider, the silver lining of that
16:52
Speaker 9: report is that the mortality rate that they came out
16:55
Speaker 9: with was lower than what people talk about. People talk
16:57
Speaker 9: about three to six percent, but in that trial, mortality
17:00
Speaker 9: like not small one and a half one point seven
17:03
Speaker 9: percent from what I have read. So that does give
17:08
Speaker 9: you a little flavor as to maybe it's not as bad,
17:11
Speaker 9: but it's obviously one point six one point seven percent
17:13
Speaker 9: is too pretty awful.
17:16
Speaker 5: And Sam, how kind of quickly can some of those
17:19
Speaker 5: vaccinations be deployed? Is that something that's already playing out
17:23
Speaker 5: right now? Is that being centered primarily where the heart
17:26
Speaker 5: of the outbreak is is in Congo.
17:30
Speaker 9: Yeah, it doesn't sound like it from the latest news
17:34
Speaker 9: real force that I've seen that Bloomberg has been doing
17:35
Speaker 9: a great job of talking about that. Apparently there've been
17:39
Speaker 9: discussions because this has been not this is not something
17:42
Speaker 9: that happened overnight. It's been going on at least in
17:44
Speaker 9: the Congo unfortunately for a few months, and that there's
17:47
Speaker 9: been discussions between groups that provide the vaccines and the Congo,
17:53
Speaker 9: and they hadn't got to a the last I read
17:57
Speaker 9: to a to an agreement of getting those vacks nations
18:00
Speaker 9: out and getting it to people. Let's not forget we've
18:03
Speaker 9: learned this. Anywhere you go, having vaccine is not equal
18:07
Speaker 9: to people having it in their arms. The more difficult
18:11
Speaker 9: a country, a region, reaching people in rural areas, et cetera,
18:15
Speaker 9: is cold chain necessities, et cetera. The more difficult that is,
18:19
Speaker 9: the fewer people will actually be vaccinated. So that's two
18:22
Speaker 9: different things here. But I'm confident that we can have
18:25
Speaker 9: enough vaccines to ring fence at least infections and areas
18:28
Speaker 9: and travelers. But in order to go into the hundreds
18:32
Speaker 9: of millions of doses, I think we need the m
18:34
Speaker 9: RNAs to get going.
18:35
Speaker 3: It's such a good point, Sam, that's why you're the best. Hey,
18:37
Speaker 3: Before we let you go. I just want to hit
18:39
Speaker 3: you on this headline here. Pfizer and Beyontech their flu
18:41
Speaker 3: covid vaccine failed.
18:46
Speaker 9: Well, talking about the mRNA here, it's a complicated thing.
18:49
Speaker 9: It was a combination mRNA is against three different types
18:53
Speaker 9: of flu and covid, and it failed against one of
18:58
Speaker 9: the flu variants, which is the or strains, which is
19:01
Speaker 9: the influenza B virus in that setting. So they need
19:06
Speaker 9: to go back to the growing board and see why.
19:09
Speaker 9: That is what is complicated here and we need to
19:12
Speaker 9: understand it better. Is that they had a success in
19:15
Speaker 9: phase two, then they took the same thing into phase
19:18
Speaker 9: three and it failed against the B influenza B. I've
19:22
Speaker 9: been out. I've asked a company whether that's because they
19:25
Speaker 9: think that the strain changed during the trial. It's possible
19:29
Speaker 9: to remember flu is one of those nasty ones that
19:31
Speaker 9: changes all the time, and the change matters a lot more,
19:34
Speaker 9: I would say, than covid does. So that is what
19:39
Speaker 9: that's what happened here, and it does give them a
19:41
Speaker 9: disadvantage versus Moderna which had a successful trial.
19:44
Speaker 3: Such good perspective, Sam, you are totally the best. Sam Fazelli,
19:47
Speaker 3: Boomberg Intelligence, Director of Research, for Global Industries and Senior
19:50
Speaker 3: Pharmaceutical joining us from Bordeaux. I look forward to the picture, Sam,
19:55
Speaker 3: I require some of that just to see because do
19:58
Speaker 3: you make your own wine there? Like do you have
20:00
Speaker 3: Oh he's gone, he already left, already, he's back to
20:03
Speaker 3: the vineyard. Ah. Same, thanks Sam, I really appreciate that one.
20:07
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
20:11
Speaker 2: weekdays at ten am Eastern on applecar Play and Android
20:14
Speaker 2: Auto with the Bloomberg Business app. You can also listen
20:17
Speaker 2: live on Amazon Alexa from our flagship New York station,
20:21
Speaker 2: Just say Alexa play Bloomberg eleven thirty.
20:25
Speaker 3: Bloomberg Intelligence Radio. We are broadcasting to live from Interactive
20:28
Speaker 3: Broker Studio right here in Midtown Manhattan. Also check us
20:31
Speaker 3: out on YouTube. But you know, Bailey doesn't have his
20:34
Speaker 3: bro vesque, so the appeal for that is a little
20:36
Speaker 3: bit less. A Bay Lipshaltz in for Paul Sweeney. So, Bailey,
20:40
Speaker 3: I'm an energy geek nerd. I've been covering energy commodities
20:43
Speaker 3: for like seventeen and a half years, so welcome. So naturally,
20:47
Speaker 3: every once in a while I have an energy guest
20:49
Speaker 3: on and this one's actually quite interesting. So it's a
20:52
Speaker 3: company called Sigma Lithium. It's ticker SGML trades about nine
20:57
Speaker 3: dollars fifty cents a share. It's been a one billion
20:59
Speaker 3: dollar company. It's a Canadian company, but it minds in
21:02
Speaker 3: Brazil lithium obviously, hence the name, and the idea is
21:06
Speaker 3: to basically make green lithium. Can you make it cost
21:10
Speaker 3: competitively and how do you bring your own cost down? Now,
21:13
Speaker 3: lithium is used in pretty much everything, but in particular
21:16
Speaker 3: the batteries for electric vehicles, So if we want to
21:18
Speaker 3: make the transition to green, lithium is something that we're
21:21
Speaker 3: going to need. But how you green that is definitely
21:24
Speaker 3: the question. So joining us now is Anna Cabral. She's
21:27
Speaker 3: Signal Lithium co chair and CEO. The company just reported
21:30
Speaker 3: earnings yesterday. What stood out to me really was reduced
21:34
Speaker 3: cash costs by twenty two percent an increase in margins there.
21:40
Speaker 3: So we wanted to get some more insight into how
21:42
Speaker 3: all this works, how it is to go green and
21:45
Speaker 3: be sustainable mining lithium, and can you sell it for
21:48
Speaker 3: what kind of profit? Anna joins us now, Anna, thank
21:50
Speaker 3: you so much for joining us. Can you just talk
21:53
Speaker 3: us through for those of you who are on energy geeks,
21:56
Speaker 3: what the company does and what it's hoping.
21:58
Speaker 2: To do.
22:00
Speaker 9: Absolutely well.
22:01
Speaker 10: Sigma has been is a twelve year old company. We've
22:04
Speaker 10: been operating for over a year now. We're celebrating a
22:08
Speaker 10: year of shipments, consistent monthly shipments and we ship an
22:12
Speaker 10: equivalent amount. We ship approximately two hundred and fifty thousand
22:18
Speaker 10: tons to two hundred and seven thousand tons annually, twenty
22:21
Speaker 10: two thousand tons monthly, which translated into a chemical measure,
22:25
Speaker 10: is the equivalent of approximately thirty eight thousand tons of
22:29
Speaker 10: letum carbonate equivalent. So that's what we do. This is
22:32
Speaker 10: who we are. We have shoe operations. They're very distinctive,
22:36
Speaker 10: but they're vertically integrated. We have a mine the mines
22:42
Speaker 10: letium rock, and then that rock gets fed into an
22:46
Speaker 10: industrial pre chemical plant where we process that rock into
22:50
Speaker 10: letium materials and at that we are producing zero carbon lithium.
22:55
Speaker 10: And so we're the only company in the world that
22:57
Speaker 10: produces zero carbon litium in scale.
23:02
Speaker 5: And how as Alex pointed out, margins look great at
23:05
Speaker 5: least according to the results, and cash costs down twenty
23:09
Speaker 5: two percent.
23:10
Speaker 10: How does that.
23:10
Speaker 5: Play out I'm just thinking, if I'm a car manufacturer,
23:13
Speaker 5: I probably want the cheapest lithium I can get my
23:15
Speaker 5: hands on because I also want to make money.
23:19
Speaker 9: That's the whole point.
23:20
Speaker 10: There isn't a green premium. We have been able to
23:23
Speaker 10: premiumize our product based on different attributes. The product has
23:27
Speaker 10: a chemical and a physical characteristic which brings actual measurable
23:32
Speaker 10: cost savings of twenty to thirty percent to the supply chain.
23:38
Speaker 10: Either the car maker or the battery maker, whomever owns
23:40
Speaker 10: the product within the supply chain will benefit from those
23:44
Speaker 10: cost savings. That's the basis for premiumization, and we're very
23:50
Speaker 10: let's say reasonable about it. We have a commercially win
23:54
Speaker 10: commercial win win approach where we take about ten percent
23:57
Speaker 10: of that and then the client takes about twenty to
23:59
Speaker 10: twenty center of that. So is a win win situation.
24:02
Speaker 10: But there's no green premium. Everybody wants it, nobody wants
24:05
Speaker 10: to pay.
24:06
Speaker 3: For it exactly. That's one hundred percent what I keep
24:09
Speaker 3: hearing about as well. So what enabled you to do
24:13
Speaker 3: this sustainably in this area? Like is it? Can you
24:17
Speaker 3: replicate this anywhere in any mind? And then uh, and
24:20
Speaker 3: then concentration facility or was there something specific to this?
24:25
Speaker 10: There are number of factors. The first factor, let's talk
24:27
Speaker 10: about scope one. When you when you think about the
24:30
Speaker 10: common load of a product, can you need to think
24:32
Speaker 10: about what goes inside your operations, which is scope one.
24:36
Speaker 10: And then the kind of power energy used to to
24:40
Speaker 10: run these operations, which is what we call scope two.
24:43
Speaker 10: And then the effect that your product is going to
24:45
Speaker 10: have in a supply chain, which is scope three. Right,
24:48
Speaker 10: which is we're all in guess for example, has a problem.
24:51
Speaker 10: So when we when we made this investment here uh
24:56
Speaker 10: which which which was now twelve years ago, the objective
25:00
Speaker 10: was to reach eventually a point where we will deliver
25:04
Speaker 10: the most sustainable litum in the world. We ended up
25:06
Speaker 10: going zero CAB, but we started with scope one, meaning
25:09
Speaker 10: we designed when we chose technologies and a processing method
25:14
Speaker 10: that were not aggressive to the environment, that we're not
25:17
Speaker 10: going to leave a serious, unabatable carbon footprints such as
25:23
Speaker 10: tailing dams. We have zero tailing dams because we developed
25:27
Speaker 10: a dry stacking module. Water. The use of water in
25:31
Speaker 10: our industry is highly problematic. We use sewage water and
25:36
Speaker 10: we recite, we recycle that water. So we have what
25:40
Speaker 10: we call recirculation, reuse of sewage water, so we don't
25:45
Speaker 10: use fresh water, so it's zero fresh water, right, So
25:48
Speaker 10: these were elements, and then we chose separation methods that
25:52
Speaker 10: do not use toxic chemicals, so we have another zero,
25:56
Speaker 10: which is zero toxic chemicals. So this all happens in
25:59
Speaker 10: that in the stroke QUOD. So then you moved to
26:02
Speaker 10: the mind, what is the responsible of carbon footprint inside
26:06
Speaker 10: the gate scope? One on the mind is mainly diesel
26:09
Speaker 10: and nitrates in explosives a NFO. So we went out
26:13
Speaker 10: to minimize that trying to add bland biodiesel, biofuels, biodiesel
26:20
Speaker 10: with diesel, and then using electronic triggers electronic explosives to
26:26
Speaker 10: minimize the user nitrate, so we obtained a pretty sizable reduction.
26:30
Speaker 10: The result of it, right unabated, like the result of
26:34
Speaker 10: all of that, after going through the hard to obey
26:37
Speaker 10: after all of it, is that we ended up with
26:39
Speaker 10: inside one, meaning point twenty six tons of carbon per
26:43
Speaker 10: tonnel material. So we did all that work and we
26:47
Speaker 10: got to that low level, which meant that then we
26:50
Speaker 10: could go out and offset the rest with credits because
26:53
Speaker 10: we are inside one, which meant we had to do
26:55
Speaker 10: a huge effort to be inside one. Comparing to our
27:00
Speaker 10: piers in these salars in South America is typically five
27:04
Speaker 10: tons of carbon per ton, and we were a point
27:08
Speaker 10: two six and other minds in other parts of the
27:11
Speaker 10: world is fifteen tons of carbon in certain high cost
27:16
Speaker 10: minds in Asia it's fourty five tons. So uh, it
27:20
Speaker 10: wasn't enormous amount of work on Scope one, so scope
27:23
Speaker 10: too though, Yeah, no.
27:25
Speaker 3: Go ahead, We only have about the thirty forty seconds left.
27:28
Speaker 3: But I do want to know if you can replicate
27:29
Speaker 3: this elsewhere.
27:31
Speaker 10: Well, that's the point. I mean Scope two. We were
27:34
Speaker 10: blessed with the grid in Brazil, which meant that, you know,
27:37
Speaker 10: we have access to abundant available renewable energy, so that
27:43
Speaker 10: also contributes a lot. Because our Scope two is green,
27:47
Speaker 10: it's one hundred percent renewable. So we ended up with
27:50
Speaker 10: a situation that's hybrid. Could we replicate Yes, we can
27:53
Speaker 10: replicate Scope one, but then we will need to plug
27:56
Speaker 10: it into a renewable source. So that's kind of the
27:59
Speaker 10: uniqueness of what we do. He is a combination of technology.
28:02
Speaker 10: We have a highly benign a grid.
28:05
Speaker 3: Well, Ana, we really appreciate it. It's a really interesting
28:07
Speaker 3: story because so often we hear about how this just
28:10
Speaker 3: isn't possible, and it's nice to get that success story
28:12
Speaker 3: as well. Look forward to seeing your growth as well.
28:15
Speaker 3: On a cabral Sigma Lithium co chair and CEO of
28:19
Speaker 3: joining us on Sustainable Lithium. You good, none, Bailly, you
28:22
Speaker 3: got it like you to feel.
28:23
Speaker 5: I learned a lot, I will say, though I'm a
28:26
Speaker 5: big markets watcher as you know. Uh, Sigma lithium about
28:30
Speaker 5: a year ago north of thirty bucks right now trade
28:32
Speaker 5: and round nine.
28:33
Speaker 3: I mean it's lithium prices they've just been I mean
28:35
Speaker 3: that's the thing. It's super cyclical. And look at what's
28:37
Speaker 3: happening with the auto demand. At the end of the day.
28:41
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
28:45
Speaker 2: weekdays at ten am Eastern on applecar Play and Android
28:48
Speaker 2: Auto with the Bloomberg Business Act. You can also listen
28:51
Speaker 2: live on Amazon Alexa from our flagship New York station
28:55
Speaker 2: Just say Alexa play Bloomberg eleven thirty.
28:59
Speaker 3: We have a really interesting guest coming up now. So
29:01
Speaker 3: Appian is an American cloud computing and enterprise software company.
29:06
Speaker 3: It's headquartered in McLean, Virginia. It's been around for quite
29:09
Speaker 3: a long time, and the CEO and founder, Matt Calkins
29:12
Speaker 3: of Appian joins us. Now, hey, Matt, just dumb question.
29:16
Speaker 3: What does your company do.
29:18
Speaker 1: Hey, Alex, We do processes. You know, processes make the
29:21
Speaker 1: world go around. Every organization is composed of its unique processes,
29:25
Speaker 1: and we automate those processes, We orchestrate them, and we
29:28
Speaker 1: make them better over time using our expertise in most
29:30
Speaker 1: of all our software.
29:32
Speaker 5: And how do you guys fit into kind of this
29:35
Speaker 5: AI wave? When I look at you know a number
29:37
Speaker 5: of stocks that have continued to rip and move higher,
29:40
Speaker 5: It doesn't seem like Appian has been caught up in
29:42
Speaker 5: that shift.
29:44
Speaker 1: Well, we're not the highest profile member of the AI wave,
29:47
Speaker 1: but we're really pertinent to it. You see, every process
29:49
Speaker 1: is made up of work getting done, and some of
29:51
Speaker 1: that work is done by AI. So we've been selling
29:53
Speaker 1: AI for nearly a decade and we have a unique
29:56
Speaker 1: angle on it. Our angle is that AI should work
29:59
Speaker 1: with private data.
30:01
Speaker 3: Right.
30:01
Speaker 1: You shouldn't as a user, You should not have to
30:03
Speaker 1: divulge your data at all to an AI algorithm that
30:06
Speaker 1: you don't own. You should preserve the sanctity of your
30:09
Speaker 1: information and still be able to get great AI results.
30:12
Speaker 1: So we work with kind of a virtual database to
30:15
Speaker 1: allow that instead of asking that our customers give us
30:17
Speaker 1: their data.
30:18
Speaker 3: So that would totally fly in like the large language
30:22
Speaker 3: models that we're dealing with now, or they sort of
30:24
Speaker 3: sour uce all this public data or so pay Reddit
30:26
Speaker 3: to get their data. That's not that would be very different.
30:30
Speaker 1: Well it's okay, yeah, I'm not talking about how you
30:33
Speaker 1: build the generic AI model. That's what you're talking about.
30:37
Speaker 1: You first training a generic model. I'm talking about how
30:41
Speaker 1: organizations like corporations are frequently asked to train an AI
30:46
Speaker 1: model after it's already incorporated all that public data. But
30:49
Speaker 1: train an AI model, which has certain downsides. It means
30:53
Speaker 1: that you've made an investment in a model you don't own.
30:55
Speaker 1: It means you've divulged your data and that that could
30:57
Speaker 1: be risky. It means you can only get one form
31:00
Speaker 1: of answer back from that algorithm, because no matter what
31:03
Speaker 1: security clearance the question has, you've all got the same
31:05
Speaker 1: base of data to ask against. It means it's hard
31:08
Speaker 1: to retrain that model. There's a lot of disadvantages to
31:11
Speaker 1: training an AI model, and we would like to find
31:15
Speaker 1: we do find a way to get great GENAI results
31:18
Speaker 1: without that training step.
31:20
Speaker 3: Interesting.
31:21
Speaker 6: Do you guys have any marquee partnerships?
31:23
Speaker 5: It just feels like in terms of kind of this
31:25
Speaker 5: AI boom you mentioned that you guys have been operating
31:27
Speaker 5: in the space for quite some time has drawn a
31:30
Speaker 5: lot of money from Microsoft, Google, you name it.
31:33
Speaker 1: For sure. We work with all of them, but we're
31:35
Speaker 1: AWS centric, so that's our primary partnership and it has
31:39
Speaker 1: been for a couple of decades now. We're also one
31:42
Speaker 1: of their early pioneers with the clip.
31:44
Speaker 3: What do you think AI regulation should be and where
31:49
Speaker 3: is it now?
31:51
Speaker 1: It's nowhere near where it should be, that's the answer.
31:54
Speaker 3: We have a regulation at all?
31:56
Speaker 1: Yeah, we should have some. We should have some to
31:59
Speaker 1: establish a a fair and well understood set of ground
32:03
Speaker 1: rules so that we can all compete without uncertainty. That
32:06
Speaker 1: would be ideal. But today AI regulation is mostly about fear.
32:09
Speaker 1: It's mostly about stopping AI from doing something catastrophic, to
32:13
Speaker 1: quote the recent California proposal catastrophic instead of worrying about
32:20
Speaker 1: bread and butter concerns. Is AI infringing on people's intellectual property?
32:24
Speaker 1: As you make the next model? I think we're much
32:27
Speaker 1: too driven by fear and too little driven by just
32:30
Speaker 1: creating a fair playing field for all participants in this
32:34
Speaker 1: emerging industry, which really what we need, less uncertainty, less
32:38
Speaker 1: divergent regulation. Depending on where you're doing business, it's this
32:41
Speaker 1: in Colorado, it's that in Europe, etc. It would be
32:43
Speaker 1: better to just come up with a standard, and that
32:45
Speaker 1: standard should address the first harms that AI is committing,
32:50
Speaker 1: which are harms of a breach of intellectual property, rather
32:54
Speaker 1: than the eventual hypothetical harms that most legislation seems targeted
32:58
Speaker 1: to address.
32:59
Speaker 6: And how would that actually, in your view, come to fruition.
33:02
Speaker 5: It just feels like the kind of climate and DC
33:06
Speaker 5: maybe wouldn't be as conducive to actually implementing some of
33:10
Speaker 5: these practices at this point in time.
33:12
Speaker 1: Look, I live near DC and it's paralyzed right now.
33:15
Speaker 1: We're all thinking about the election. But I do have
33:17
Speaker 1: a proposal. I think that we should begin with a
33:20
Speaker 1: few broad statements like a bill Wright's almost around AI.
33:24
Speaker 1: I think AI should disclose its data sources. That would
33:28
Speaker 1: raise everybody's visibility into what's going on in AI and
33:31
Speaker 1: allow us to better figure out where the value is
33:33
Speaker 1: truly coming from. It's coming from the data more than
33:36
Speaker 1: we realize. And then for private data, privately identifiable information,
33:41
Speaker 1: and copyright information, all of that should be used with
33:43
Speaker 1: permission and compensation. So if we started with just that
33:47
Speaker 1: full disclosure and permission and compensation for all private information,
33:51
Speaker 1: I think we would have a fair baseline for how
33:54
Speaker 1: you're allowed to build an AI algorithm. You'd have good transparency,
33:59
Speaker 1: we'd be better understand what this technology really means. And
34:01
Speaker 1: then also it we'd actually be helping the industry become
34:05
Speaker 1: more valuable because we'd shift it out of the current
34:08
Speaker 1: race for information into something far more important, the race
34:11
Speaker 1: for trust.
34:13
Speaker 3: Matt, that is your day job. That is the job
34:15
Speaker 3: that you've had for a long time. But you also
34:17
Speaker 3: have a side gig, and apparently you're super big into
34:21
Speaker 3: board gaming as am I I feel you on that.
34:23
Speaker 3: But you also make up your own board games. Is
34:26
Speaker 3: this true? Because I am so jealous?
34:28
Speaker 4: I do.
34:29
Speaker 1: I love it, and I've been designing board games for
34:31
Speaker 1: a couple of decades now, and I've got several in print,
34:35
Speaker 1: and it's a great pleasure to see other people playing them.
34:37
Speaker 1: It's one of my favorite things.
34:39
Speaker 3: Do you have like a favorite like? Is there one
34:41
Speaker 3: game either that you play that's not yours, and then
34:44
Speaker 3: the game that you created.
34:46
Speaker 1: Okay, it's hard for me to pick favorites amongst my own,
34:50
Speaker 1: but I guess I'd have to point to Sekigahara, which
34:52
Speaker 1: is still rated one of the top war games ever written,
34:54
Speaker 1: even though it was written more than a decade ago.
34:57
Speaker 1: That was a real pleasure to write. And my latest
35:00
Speaker 1: is called Chariots here about racing chariots by making simple
35:04
Speaker 1: card combinations. My favorites to play that I did not
35:07
Speaker 1: write would have to include power Grid, Acquire and Automobile.
35:12
Speaker 3: Oh, I don't know, power Grid.
35:14
Speaker 6: I need to get that.
35:15
Speaker 2: I just put on.
35:16
Speaker 6: I'll be the dumbest person in this conversation. Are these
35:20
Speaker 6: thinking games? Do I have to be like ready to
35:22
Speaker 6: have to think?
35:25
Speaker 1: Yeah, you'll do better if you think for sure. In fact,
35:27
Speaker 1: that's the fun of it. It gives me something to
35:29
Speaker 1: think about, a competition to engage your mind.
35:32
Speaker 3: Okay, that's a barely answer that question.
35:34
Speaker 5: Every day when we answer the anchor, do I have
35:37
Speaker 5: to think?
35:37
Speaker 3: Well, normally, I mean that's a TVD.
35:39
Speaker 6: To be honest, I'm a Yazi fan. I like to
35:40
Speaker 6: you know, you roll the die, you pick out the die.
35:42
Speaker 6: It's pretty straightforward strategy.
35:45
Speaker 1: There's some decisions, and if there weren't, it wouldn't be fun.
35:48
Speaker 3: I mean, I'm totally I'm totally okay, I'm gonna check
35:53
Speaker 3: those out. That was really great. We really appreciate it.
35:55
Speaker 3: Matt Calkins, thank you so much. A founder and CEO
35:58
Speaker 3: of Appy and joining us Nasdaq ticker is a p P.
36:02
Speaker 3: And wait, so you guys don't like have parties in
36:05
Speaker 3: Jersey with board games?
36:06
Speaker 6: Okay? So I love board games, so I didn't. I
36:09
Speaker 6: didn't want to downplay it. Okay, but I like Yati
36:12
Speaker 6: you play? Were you part of that code games? I
36:14
Speaker 6: guess yeah, maybe not. Board games is code names. It's
36:17
Speaker 6: a card game.
36:18
Speaker 3: It's it's a card Yeah, I don't know. It's a
36:19
Speaker 3: good question. Okay, code name.
36:20
Speaker 6: So you like the code name names, Yazi, Yati? Have
36:22
Speaker 6: you played Chameleon?
36:23
Speaker 4: No?
36:24
Speaker 6: Chameleons a lot of fun? Okay, it's good. I know
36:26
Speaker 6: you're not like, I don't know. If you go to breweries,
36:29
Speaker 6: it's good brewery game.
36:30
Speaker 3: It's a good brewery game. Okay. I mean, my daughter's
36:32
Speaker 3: not quite old enough for that, but it's a fair point.
36:34
Speaker 3: I'm a Katon person, so that's see.
36:36
Speaker 6: I haven't put in the effort to learn how to
36:39
Speaker 6: play it.
36:39
Speaker 3: Every once you do play oh man, Yeah, okay, the
36:41
Speaker 3: first time is a slog and it's confusing and then
36:44
Speaker 3: it might break up your marriage. But once I get
36:46
Speaker 3: past that point, it's so good. We're also playing Pandemic Legacy.
36:50
Speaker 3: That's interesting. Anyway, we digress. Bailey's looking at me like.
36:54
Speaker 5: I don't know what you're talking about. But JT's gonna
36:56
Speaker 5: come over. We'll play some Gaitan and build some roos.
36:57
Speaker 4: Oh.
36:58
Speaker 3: I see what he's doing, and he's like, come over
36:59
Speaker 3: and then fix my leak or whatever.
37:02
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