Latest / Bloomberg Intelligence / US Tech Earnings, Commercial MBS Bonds Go Bust

Transcript

US Tech Earnings, Commercial MBS Bonds Go Bust · Bloomberg Intelligence

• 0:02
  Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul Sweeney.
• 0:06
  Speaker 2: The real air performance has been the US corporate high yield.
• 0:09
  Speaker 3: Are the companies lean enough? Have they trimmed all the fats?
• 0:11
  Speaker 2: The semiconductor business is a really cyclical business.
• 0:15
  Speaker 1: Breaking market headlines and corporate news from across the globe.
• 0:18
  Speaker 4: Do investors like the M and A that we've seen?
• 0:21
  Speaker 2: These are two big time blue chip companies.
• 0:24
  Speaker 3: The window between the peak and cut changing super fast.
• 0:28
  Speaker 1: Bloomberg Intelligence with Alex Steel and Paul Sweeney on Bloomberg Radio.
• 0:36
  Speaker 5: I'm Paul Sweeney. Alex Steel is out this week.
• 0:38
  Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big
• 0:40
  Speaker 2: business stories impacting Wall.
• 0:42
  Speaker 5: Street and the global markets.
• 0:43
  Speaker 2: Each and every week we provide in depth research and
• 0:45
  Speaker 2: data on some of the two thousand companies in one
• 0:47
  Speaker 2: hundred and thirty industries around on.
• 0:49
  Speaker 5: Is covered worldwide.
• 0:50
  Speaker 2: Today, we'll look at that fragility of the commercial mortgage
• 0:53
  Speaker 2: backed securities market, as well as the impact that business
• 0:55
  Speaker 2: leaders can make by advocating for safe and secure elections. Plus,
• 1:00
  Speaker 2: with the US election just a few days away, a
• 1:03
  Speaker 2: look at those sway US presidents have on fuel economy
• 1:05
  Speaker 2: standards for cards, but first tech earnings. This week, Alphabet
• 1:10
  Speaker 2: reported earnings that surpassed analyst estimates, with their cloud division
• 1:13
  Speaker 2: seeing a thirty five percent rise in sales, while Meta
• 1:16
  Speaker 2: warned of a worsening AI losses. Bloomberg Intelligence senior tech
• 1:20
  Speaker 2: analysts Man Deep Seeing breaks down the reports.
• 1:24
  Speaker 6: Search, Cloud, YouTube. These are three separate businesses doing extremely
• 1:30
  Speaker 6: well at scale. I mean, double digit growth for search
• 1:33
  Speaker 6: business is really stellar when you think of all the
• 1:37
  Speaker 6: pressure they've been facing, you know, when it comes to
• 1:40
  Speaker 6: new entrants like CHATGPT and Perplexity and whatnot. And everyone
• 1:46
  Speaker 6: is of the belief that they would take at least
• 1:48
  Speaker 6: some share from Google, at least in terms of AD revenue.
• 1:53
  Speaker 6: Google hasn't lost any share. In fact, it's a very
• 1:56
  Speaker 6: healthy growth at their scale. And YouTube look fifty billion
• 2:00
  Speaker 6: plus revenue run rate seventy thirty split between subscriptions ads
• 2:06
  Speaker 6: is seventy and thirty percent of subscriptions and subscriptions crew,
• 2:10
  Speaker 6: you know, twenty eight percent. I mean, just think about
• 2:13
  Speaker 6: fifteen billion dollar subscriptions business growing twenty eight percent. That's
• 2:17
  Speaker 6: very impressive. So and we're not even talking about wevemo here.
• 2:20
  Speaker 6: So when you look at you know, all the businesses.
• 2:24
  Speaker 6: They clearly have a lot going on, and Vemo is
• 2:27
  Speaker 6: a future bet, but something that could be huge in
• 2:30
  Speaker 6: terms of you know, top line.
• 2:31
  Speaker 2: You know, it's interesting you just mentioned fifty billion of
• 2:33
  Speaker 2: run right revenue YouTube advertising subscription. That sounds a lot
• 2:37
  Speaker 2: like the cable television business, the cable network business. I
• 2:41
  Speaker 2: look at Paramount, Paramount Global, you know, all those cable networks,
• 2:46
  Speaker 2: they have thirty billion of revenue. So YouTube is significantly
• 2:50
  Speaker 2: bigger than some of the largest advertising and subscription German
• 2:54
  Speaker 2: media companies out there. Yeah, in a dozen years, it's
• 2:57
  Speaker 2: just extraordinary.
• 2:58
  Speaker 4: I mean, you were talking about these massive and sms
• 3:00
  Speaker 4: that Google in Alphabet obviously the parent company has been
• 3:03
  Speaker 4: trying to catch up to the likes of obviously Microsoft
• 3:05
  Speaker 4: and of course open Ai. Walk us through some of
• 3:08
  Speaker 4: those investments and how they're starting to pay off.
• 3:11
  Speaker 6: I mean, look, in the case of Alphabet, they have
• 3:15
  Speaker 6: huge data center investments simply because they have a giant
• 3:19
  Speaker 6: infrastructure that's powering these big businesses. So there's a lot
• 3:24
  Speaker 6: of internal consumption of these chips. But also the cloud business,
• 3:28
  Speaker 6: which saw a nice acceleration, you know, sequential acceleration from
• 3:32
  Speaker 6: twenty nine percent growth to thirty five percent growth, I
• 3:35
  Speaker 6: would say a lot of that is driven by the
• 3:39
  Speaker 6: availability of GPUs in their cloud. So I'll be interested
• 3:43
  Speaker 6: in seeing how much of Microsoft GPUs are being used
• 3:47
  Speaker 6: for internal consumption versus what is being exposed on their
• 3:50
  Speaker 6: Azure cloud because in my mind, Google having their own
• 3:54
  Speaker 6: chips is making a difference in terms of their cloud growth.
• 3:58
  Speaker 6: With Microsoft, at least they quantify the AI services contribution
• 4:02
  Speaker 6: being ten billion dollars by next quarter, so that's huge.
• 4:06
  Speaker 7: Still.
• 4:07
  Speaker 6: You know, when it comes to Azure, the fact that
• 4:10
  Speaker 6: growth is not accelerating like we saw with Google Cloud,
• 4:14
  Speaker 6: it makes you wonder, you know, if capex is growing
• 4:17
  Speaker 6: fifty percent, why is it not translating into faster Azure growth?
• 4:21
  Speaker 6: Even though thirty three percent is a very solid number,
• 4:25
  Speaker 6: but you want to see that acceleration which we saw
• 4:27
  Speaker 6: with Google. In the case of Meta and Microsoft, the
• 4:31
  Speaker 6: expectations were higher, and I would say Meta is somewhat
• 4:35
  Speaker 6: different in the sense that they have their all large
• 4:38
  Speaker 6: angrid model, they have their lead when it comes to
• 4:42
  Speaker 6: you know, generative AI, but they don't have a separate
• 4:45
  Speaker 6: AI revenue line like you see with you know, Microsoft
• 4:48
  Speaker 6: or with Alphabet, And that's where you know, if they say,
• 4:53
  Speaker 6: you know, capex is going to significantly increase for twenty
• 4:56
  Speaker 6: twenty five without really quantifying how significant it will be.
• 5:01
  Speaker 6: Whether it's going to be twenty percent which is the
• 5:03
  Speaker 6: consensus number, or thirty percent of fifty percent. Nobody knows,
• 5:07
  Speaker 6: and that's what I think created that uncertainty around Meta's
• 5:11
  Speaker 6: capex spen. And we saw what happened in three qu
• 5:14
  Speaker 6: of twenty twenty two where they had a very similar print,
• 5:17
  Speaker 6: but they actually quantified that significant and you know, the
• 5:20
  Speaker 6: stock dropped twenty percent after that, so clearly there is
• 5:24
  Speaker 6: some nervousness and uncertainty around their cap expin How.
• 5:27
  Speaker 2: Is AI impacting John Tucker justman's search results, right, I mean.
• 5:34
  Speaker 6: Just the nature of search is changing in the sense
• 5:36
  Speaker 6: you can ask you know, a lot longer queries. The
• 5:41
  Speaker 6: prompts can be infinite and length. You can you know,
• 5:45
  Speaker 6: have a video or an image prompt. It just doesn't
• 5:48
  Speaker 6: have to be text. So that's what Google called out,
• 5:52
  Speaker 6: that the queries are getting a lot more complex in
• 5:54
  Speaker 6: nature and users are actually engaging with it. So it's
• 5:57
  Speaker 6: not as if, you know, that's driving them to some
• 5:59
  Speaker 6: of the platform users want to use what they call
• 6:02
  Speaker 6: multimodal search, which is a combination of texts, videos, and
• 6:07
  Speaker 6: images and audios. So that's why these lms are so powerful,
• 6:12
  Speaker 6: because they give you that innate capability to search in
• 6:16
  Speaker 6: whatever format you want and you can just throw it
• 6:18
  Speaker 6: in that search box. So that search box is getting
• 6:22
  Speaker 6: a lot bigger and a lot more complex on that
• 6:25
  Speaker 6: Google page.
• 6:25
  Speaker 2: Our thanks to Bloomberg Intelligence senior tech analysts Man Deep
• 6:28
  Speaker 2: saying sticking with earnings, ELI Lilly lowered its guidance due
• 6:31
  Speaker 2: to lackluster sales of its weight loss drug zet Bound
• 6:35
  Speaker 2: and diabetes drug Montro. Each missed estimates by nearly nine
• 6:39
  Speaker 2: hundred million dollars. For more on the drugmaker shocking results,
• 6:42
  Speaker 2: we were joined by bloomerg Intelligence director of Research for
• 6:44
  Speaker 2: Global Industries and senior pharmaceutical analyst Sam Fazzelli.
• 6:48
  Speaker 8: When they reported we got a miss, right and I'm
• 6:51
  Speaker 8: looking at it right now. They missed by six percent
• 6:54
  Speaker 8: on revenue. That is not what do you do when
• 6:57
  Speaker 8: you're a sixty pe company, right, It just that it
• 7:00
  Speaker 8: is the world's not forgiving enough on that. Just breaking
• 7:03
  Speaker 8: that down further, that miss was two drugs on Jarro
• 7:06
  Speaker 8: and zep Bound, and those are the drugs that everybody
• 7:09
  Speaker 8: talks about. This is the the obesity drugs that are
• 7:13
  Speaker 8: on the market.
• 7:14
  Speaker 9: They missed.
• 7:15
  Speaker 8: Why did they miss The company said that it's because
• 7:18
  Speaker 8: there was an inventory d stocking going on at some wholesalers.
• 7:22
  Speaker 8: So people go, wait a minute, you're saying to me
• 7:25
  Speaker 8: that demand cannot be satisfied, supply were supply limited, So
• 7:31
  Speaker 8: why is there an inventory issue in the middle here?
• 7:34
  Speaker 8: And of course that's what led to the question of
• 7:36
  Speaker 8: oh my god, are we overestimating demand?
• 7:39
  Speaker 9: Here? Is the company overestimated it? Why? It's the world?
• 7:42
  Speaker 8: It sounds like with the twelve different forms of the
• 7:47
  Speaker 8: drugs that they have.
• 7:48
  Speaker 9: That no one in.
• 7:50
  Speaker 8: This early launch phase we can call it the early launch, right,
• 7:53
  Speaker 8: given that it's been a couple of years, is really
• 7:56
  Speaker 8: able to manage and work out what they need to
• 7:59
  Speaker 8: have as inventory. Because in such a massive product, you're
• 8:03
  Speaker 8: going to have an impact on working capital, even for
• 8:06
  Speaker 8: the wholesalers. It sounds like that that's the issue that
• 8:10
  Speaker 8: even Lily themselves can't necessarily forecast here, right, I mean
• 8:14
  Speaker 8: the actual details of how much of each product has made.
• 8:18
  Speaker 8: If that's true, then and I think you get a
• 8:20
  Speaker 8: little with of that in the fact that Folier guidance
• 8:23
  Speaker 8: wasn't dropped by as much as the miss that at
• 8:26
  Speaker 8: least currently they are optimistic about picking a whole bunch
• 8:30
  Speaker 8: of that backup in the Q four that you should
• 8:32
  Speaker 8: not worry about. Demand you talk to any doctor you want,
• 8:35
  Speaker 8: do they say, oh, I have no patients left to
• 8:38
  Speaker 8: asking me for he set bound or we go viaor whatever.
• 8:40
  Speaker 8: So I think that's what's happening here. The difficulty in
• 8:45
  Speaker 8: managing and thinking about how to manage your inventory.
• 8:48
  Speaker 4: Something I wanted to pick your brain about was when
• 8:50
  Speaker 4: it comes to knockoffs, because we saw a huge drop
• 8:52
  Speaker 4: in hymns in hers earlier this month, so they were
• 8:56
  Speaker 4: so they previously were allowed to manufacture copycap drugs when
• 8:59
  Speaker 4: they're deemed in short supplied by the FDA, But the
• 9:02
  Speaker 4: FDA at that time said when it came to Zebound
• 9:04
  Speaker 4: and Manjaro specifically for Eli Lily, they weren't shortage anymore.
• 9:07
  Speaker 4: So that's why you saw that drop there. But they
• 9:09
  Speaker 4: still when it came to a Zempic and Wegovi when
• 9:12
  Speaker 4: you think about Novo Nordisk, they were still able to
• 9:14
  Speaker 4: offer compounded version actually versions of those, So I'm wondering
• 9:18
  Speaker 4: when you think about Eli Lily versus what's happening with
• 9:21
  Speaker 4: Novo nordis, how does that kind of come into play
• 9:23
  Speaker 4: when you're thinking about when it comes to sort of
• 9:26
  Speaker 4: the knockoffs and the copycat type drugs.
• 9:28
  Speaker 9: Yeah.
• 9:28
  Speaker 8: Sure, I mean I'm not even sure that people have
• 9:32
  Speaker 8: stopped making compounded versions of zep pound and Manjara because
• 9:36
  Speaker 8: the FDA kind of reeled back a little bit and said, oh,
• 9:39
  Speaker 8: we're going to actually look at this again.
• 9:41
  Speaker 9: So I don't think that story is finished.
• 9:43
  Speaker 8: I think that these folks are some folks are still
• 9:45
  Speaker 8: able to supply those from a compounded pharmacy perspective, So
• 9:50
  Speaker 8: you know that is that's that's a lot. That's a
• 9:54
  Speaker 8: root that the FDA does provide to people. If there's
• 9:56
  Speaker 8: a shortage of a drug and someone else can.
• 9:58
  Speaker 9: Make it, well let them do it.
• 10:00
  Speaker 8: The interesting angle, of course, is that a whole bunch
• 10:02
  Speaker 8: of people who are taking off the compounded pharmacists are
• 10:06
  Speaker 8: probably paying less, and therefore if they're forced to go
• 10:09
  Speaker 8: and take it from a prescription, they may have to
• 10:11
  Speaker 8: pay more out of pocket. So that's not going to
• 10:13
  Speaker 8: be a leaving a particularly good taste in folks. Mouths
• 10:17
  Speaker 8: once that this actually happens, but it hasn't happened yet.
• 10:21
  Speaker 8: So and they did say on the call that this
• 10:23
  Speaker 8: is not because there's enormous demand being fulfilled by compounded pharmacies.
• 10:28
  Speaker 8: It's literally to do with that inventory management issue.
• 10:33
  Speaker 2: Where what are the companies saying Sam about getting this
• 10:36
  Speaker 2: in an oral format? I think that might be one
• 10:38
  Speaker 2: of the next big I guess mileposts for this type
• 10:41
  Speaker 2: of treatment.
• 10:43
  Speaker 8: Yeah, I remember, Paul, there's already an oral form of this.
• 10:46
  Speaker 8: It's called Robels's. It's from over NOTICEK. It's just a
• 10:49
  Speaker 8: tough drug to use because you have to have it
• 10:51
  Speaker 8: within about half an hour of eating. You can't take
• 10:54
  Speaker 8: it too close or too far from an eating because
• 10:57
  Speaker 8: you need an empty stomach.
• 10:58
  Speaker 9: Before you take the drug.
• 10:59
  Speaker 8: And it's a big dose and maybe the side effect
• 11:01
  Speaker 8: profile isn't as great and the weight loss isn't as great.
• 11:04
  Speaker 8: So people are trying to develop oral versions of these drugs,
• 11:08
  Speaker 8: but also oral drugs that are like normal drugs, small
• 11:12
  Speaker 8: molecules that they can swallow as a pill.
• 11:14
  Speaker 9: Once today, So that's coming.
• 11:16
  Speaker 4: So what do you think shareholders need to watch for
• 11:18
  Speaker 4: next when it comes to especially after its outlook disappointed.
• 11:23
  Speaker 8: I think we need to see how Q four does.
• 11:26
  Speaker 8: So let's hope that that they're current guidance. At least
• 11:30
  Speaker 8: they meet it, maybe beat it, that would be nice.
• 11:33
  Speaker 8: The issue is then we move into Q four. There's
• 11:37
  Speaker 8: an interesting result from a clicker trial that's coming up.
• 11:39
  Speaker 8: They've done this before. They're comparing zep bound with wig
• 11:43
  Speaker 8: V and I suspect that they're hoping and that that
• 11:47
  Speaker 8: data suggests that they might. They will show that it
• 11:50
  Speaker 8: has better weight loss. Whether the side effect profile would
• 11:53
  Speaker 8: be better or a different time will tell, but that
• 11:56
  Speaker 8: there are not many farmer companies do these type of
• 11:58
  Speaker 8: head to head trials.
• 12:00
  Speaker 9: Did it take some Yeah.
• 12:02
  Speaker 5: Yeah, no, I just wanted to get real quick.
• 12:04
  Speaker 2: What's the latest thinking on the size of this market?
• 12:07
  Speaker 5: I know you guys have done a lot of work
• 12:08
  Speaker 5: on this.
• 12:09
  Speaker 9: Yeah.
• 12:09
  Speaker 8: I think my key's latest numbers that are at ninety
• 12:12
  Speaker 8: three billion. I don't remember exactly. It's bag well out
• 12:16
  Speaker 8: of nothing exactly.
• 12:17
  Speaker 2: Our thanks to Bloomberg Intelligence, director of Research for Global
• 12:19
  Speaker 2: Industries and senior pharmaceutical analyst Sam Fizzelli coming up on
• 12:23
  Speaker 2: the program. The next US president will wield major power
• 12:26
  Speaker 2: in shaping the future of electric vehicles. We'll find out
• 12:29
  Speaker 2: in which direction each candidate wants to go. You're listening
• 12:32
  Speaker 2: to Bloomberg Intelligence on Bloomberg Radio, providing in dipper research
• 12:35
  Speaker 2: and data on two thousand companies and one hundred and
• 12:37
  Speaker 2: thirty industries. You can access Bloomberg Intelligence via b I
• 12:40
  Speaker 2: go on the terminal. I'm Paul Sweeney, and this is Bloomberg.
• 12:48
  Speaker 1: This is Bloomberg Intelligence with Alex Steele and Paul Sweeney
• 12:52
  Speaker 1: on Bloomberg Radio.
• 12:56
  Speaker 5: I'm Paul Sweeney. Alex Steele is out this week.
• 12:58
  Speaker 2: Each week we look at research from Bloomberg and EF
• 13:01
  Speaker 2: previously known as New Energy Finance. They're the team at
• 13:03
  Speaker 2: Bloomberg that tracks and analyzes the energy transition from commodities
• 13:07
  Speaker 2: to power, transport, industries, buildings, and agricultural sectors. This week
• 13:11
  Speaker 2: we took a look at the overall EV market and
• 13:14
  Speaker 2: the sway US presidents have on fuel economy standards for cars.
• 13:17
  Speaker 2: For more guests, Thost, Billy Lipschultz, and I were joined
• 13:20
  Speaker 2: by Corey Kantor b n EF, lead US electric vehicle analyst.
• 13:24
  Speaker 2: You first asked Corey, how would the EV market change
• 13:26
  Speaker 2: under each presidential candidate?
• 13:28
  Speaker 10: Everything from federal fuel economy standards. That's the kind of
• 13:32
  Speaker 10: miles per gallon of new vehicles which electric vehicles help
• 13:35
  Speaker 10: automakers achieve. To the implementation of the Inflation Reduction Act,
• 13:39
  Speaker 10: So even though the law has passed now over two
• 13:42
  Speaker 10: years ago, you're going to see those loans and grants
• 13:44
  Speaker 10: from the federal government impacted all the way up to
• 13:47
  Speaker 10: the seventy five hundred dollars Clean Car ev tax credit
• 13:50
  Speaker 10: that people know and love in some cases.
• 13:53
  Speaker 7: So depending on who wins.
• 13:55
  Speaker 10: Obviously with the IRA, you're going to need Congresses input
• 13:57
  Speaker 10: on that, but there are things that the Trump administration
• 13:59
  Speaker 10: could do very early on on the implementation side to
• 14:02
  Speaker 10: make those credits.
• 14:03
  Speaker 7: A bit more restrictive.
• 14:04
  Speaker 10: So it's going to be big, but also a split
• 14:07
  Speaker 10: decision could have an impact too if you have, say
• 14:09
  Speaker 10: a Republican Congress with Kamala Harris's president or vice versa,
• 14:13
  Speaker 10: and how.
• 14:13
  Speaker 11: Does that actually impact the ability for these car makers
• 14:17
  Speaker 11: to sell cars? When I look at targets of Biden
• 14:20
  Speaker 11: administration having a certain number of evs, I'm from California,
• 14:23
  Speaker 11: where they lay out these overly ambitious goals five six,
• 14:25
  Speaker 11: seven years down the road and then seemingly chop them
• 14:28
  Speaker 11: down when they get closer.
• 14:29
  Speaker 10: Yeah, Bailey, I mean even beyond that, there's been a
• 14:31
  Speaker 10: kind of back and forth between California and the rest
• 14:34
  Speaker 10: of the country for a long time, known as you know,
• 14:36
  Speaker 10: the California Advanced Clean Cars to policy, which aims to
• 14:41
  Speaker 10: have one hundred percent of all new sales by twenty
• 14:43
  Speaker 10: thirty five is electric, eighty percent fully electric, twenty percent
• 14:46
  Speaker 10: plug in hybrid. And so last time Trump was elected,
• 14:49
  Speaker 10: there was a lot of lawsuits, a lot of uncertainty
• 14:51
  Speaker 10: in the market. Makes it very difficult from an automaker
• 14:53
  Speaker 10: perspective to actually plan. And so these automakers for a
• 14:57
  Speaker 10: long time have wanted both the carrots, which are these
• 14:59
  Speaker 10: IRA kind of subsidies and incentives on grants and loans,
• 15:02
  Speaker 10: and then they'd be willing to take the stick, which
• 15:04
  Speaker 10: is the fuel economy standards.
• 15:06
  Speaker 7: So we have to see how it shapes out.
• 15:07
  Speaker 10: But from the automakers that we speak to, it's a
• 15:10
  Speaker 10: pretty confusing policy environment. But given that the globe is
• 15:13
  Speaker 10: moving towards electric vehicles and cleaner cars in general, they
• 15:16
  Speaker 10: have to kind of prepare to move that way regardless,
• 15:19
  Speaker 10: and it's just how quickly in the US are they
• 15:21
  Speaker 10: going to move in that direction.
• 15:22
  Speaker 2: The Chinese are moving very aggressively. How do you expect
• 15:25
  Speaker 2: them to do outside of China? Will there be market
• 15:29
  Speaker 2: for Chinese evs in Europe?
• 15:31
  Speaker 5: In the US?
• 15:32
  Speaker 7: Yeah, it's a really good question, Paul.
• 15:34
  Speaker 10: And you know, looking at the data which we do
• 15:36
  Speaker 10: at BNEF, you can see Chinese automakers like BYD making
• 15:40
  Speaker 10: upground in places like Brazil, in places like Latin America,
• 15:43
  Speaker 10: in places like Israel, you know where you might not
• 15:45
  Speaker 10: expect to see Chinese automakers. They've been moving into Europe
• 15:50
  Speaker 10: and there's been a pushback with all the tariffs and
• 15:51
  Speaker 10: back and forth there. I think that's also why the
• 15:53
  Speaker 10: US election does have a big impact, because if there's
• 15:56
  Speaker 10: no kind of counter bailing force coming out of the US,
• 15:59
  Speaker 10: you see what's going on Volkswagen on the European side,
• 16:02
  Speaker 10: it's going to maybe make the road easier for those
• 16:04
  Speaker 10: Chinese automakers on electric to kind of shift into those
• 16:07
  Speaker 10: export markets. Because if Tesla isn't focused on making more
• 16:11
  Speaker 10: affordable EV's, then there's really only going to be one
• 16:13
  Speaker 10: major player in town. It doesn't mean, you know, that
• 16:16
  Speaker 10: Chinese automakers are going to be the only ones who
• 16:18
  Speaker 10: are making mass evs, but it's a pretty big transformation
• 16:22
  Speaker 10: at the global auto market level, just like when the
• 16:24
  Speaker 10: Japanese automakers came onto the scene.
• 16:26
  Speaker 7: So I think that's the way I like to think
• 16:27
  Speaker 7: about it.
• 16:28
  Speaker 10: It doesn't mean that you know, EV's are going to
• 16:30
  Speaker 10: be sold everywhere overnight, but without a kind of other
• 16:33
  Speaker 10: major automaker, that's where I think a lot of these
• 16:35
  Speaker 10: countries are going to turn.
• 16:36
  Speaker 11: And if we do see tariffs on some magnitude, yeah,
• 16:41
  Speaker 11: what does that actually mean for the market for Elon
• 16:44
  Speaker 11: Musk's Tesla, who he's had a very prominent role campaigning
• 16:47
  Speaker 11: for Donald Trump as well as other companies.
• 16:49
  Speaker 10: I think when it comes to US tariffs, you know
• 16:52
  Speaker 10: that could buy you. I think some time you look
• 16:54
  Speaker 10: at the one hundred percent tariff that the buy An
• 16:57
  Speaker 10: Administration put on Chinese EV makers. While there weren't that
• 17:00
  Speaker 10: many Chinese EV makers selling electric vehicles here currently, Jilie Group,
• 17:03
  Speaker 10: which owns Volvo and Pollstar, was pretty much the major
• 17:06
  Speaker 10: automaker impacted. So that's why you saw those prices. Or
• 17:09
  Speaker 10: the Volbo Ex thirty, which is a really popular model
• 17:12
  Speaker 10: globally not sold here yet. It's keeping byd Out for
• 17:15
  Speaker 10: a little bit longer. But if the automakers like GM
• 17:18
  Speaker 10: or Stillants or Forward aren't helped or don't move towards
• 17:21
  Speaker 10: electric vehicles, you know, maybe.
• 17:23
  Speaker 7: It buys you two, three, four years.
• 17:25
  Speaker 10: But all the while, BYD and other Chinese automakers are
• 17:28
  Speaker 10: making more investments in battery technology, and I think, regardless
• 17:31
  Speaker 10: of who wins, you need to see more of those
• 17:32
  Speaker 10: investments here on batteries because those are going to be
• 17:35
  Speaker 10: important not only for electric vehicles but for the grid
• 17:37
  Speaker 10: as well, and you're letting China get a major competitive advantage.
• 17:40
  Speaker 2: What are the US manufacturers doing? Have they pulled back
• 17:44
  Speaker 2: on their EV investments.
• 17:45
  Speaker 10: We've definitely seen at a global level those EV targets
• 17:47
  Speaker 10: moving back. I think for it in particular, you saw
• 17:50
  Speaker 10: them move their new EV models out a couple of years,
• 17:53
  Speaker 10: so it's less so on the dollar amount and more
• 17:55
  Speaker 10: pushing it back.
• 17:56
  Speaker 7: GM has seen better EV sales.
• 17:58
  Speaker 10: In fact, the third quarter this year was the best
• 18:00
  Speaker 10: in the US that they had seen to date, with
• 18:02
  Speaker 10: the Equinox and Blazer and Lyric really taking off. To
• 18:05
  Speaker 10: make one bright point, Bailey, your home state of California
• 18:08
  Speaker 10: actually saw in that third quarter the best TV shriff
• 18:10
  Speaker 10: sales they've ever had at twenty seven percent, So that's
• 18:13
  Speaker 10: twenty three percent about almost twenty four percent fully electric,
• 18:17
  Speaker 10: the rest plug in hybrid.
• 18:19
  Speaker 5: So it's pretty good. Calif Like, what's the US average?
• 18:21
  Speaker 10: US average has been at about ten percent now nine
• 18:24
  Speaker 10: and a half ten percent.
• 18:25
  Speaker 9: Just yeah, far.
• 18:27
  Speaker 10: California twice twice the average. But what's significant about that
• 18:30
  Speaker 10: is California had been stuck at about twenty five percent.
• 18:33
  Speaker 10: Tesla actually for four quarters in a row in California
• 18:36
  Speaker 10: has seen decline in deliveries because of I think some
• 18:40
  Speaker 10: of the kind of Tesla or Musk fatigue, and so
• 18:44
  Speaker 10: to see California begin to grow again from the other automakers,
• 18:47
  Speaker 10: even if Tesla's pullback is pretty significant, we.
• 18:49
  Speaker 2: Stick with the automotive space first. Chinese carmaker BYD notched
• 18:53
  Speaker 2: up another win over Tesla this week, reporting quarterly revenue
• 18:56
  Speaker 2: that beat Tesla for the first time since the pair
• 18:58
  Speaker 2: have gone head to head, and global electric vehicle sales well.
• 19:02
  Speaker 2: Volkswagen announced a cost saving proposal to keep its German
• 19:05
  Speaker 2: plants open, after announcing plans earlier in the week to
• 19:08
  Speaker 2: close at least three factories in Germany and eliminate thousands
• 19:11
  Speaker 2: of jobs amid struggles with poor demand in Europe and
• 19:14
  Speaker 2: intensifying competition in China. For more normal INNDON, I spoke
• 19:17
  Speaker 2: with Bloomberg Intelligence senior auto analyst Steve Mann.
• 19:20
  Speaker 5: B y D is on a roll.
• 19:22
  Speaker 12: I mean, the whole EV market and China is on
• 19:25
  Speaker 12: a role. It's displacing you know, ice vehicles, internal conventionment
• 19:30
  Speaker 12: engine vehicles. Uh, and it's growing, you know, double digits.
• 19:34
  Speaker 7: You know what b I D. You know, BID.
• 19:36
  Speaker 12: Eclipsing Tesla's revenues. Is that's not the end of it,
• 19:40
  Speaker 12: you know, I think the Chinese automakers have a really
• 19:44
  Speaker 12: long term goal to really expand globally beyond their borders. Look,
• 19:49
  Speaker 12: the Japanese are really good at controlling costs in making cars.
• 19:54
  Speaker 12: You know, the Western automakers basically developed the current you know,
• 19:59
  Speaker 12: automotive market around the world. So China wants to have
• 20:04
  Speaker 12: a stake, have a claim in the automotive industry, and
• 20:09
  Speaker 12: EV is the way to go, and they want to
• 20:11
  Speaker 12: and they want to sell everyone they can build, not
• 20:14
  Speaker 12: only locally but internationally.
• 20:18
  Speaker 13: So, I mean, we know that Tesla has really been
• 20:20
  Speaker 13: focus this year as we've been seeing sharers dipping into
• 20:23
  Speaker 13: the red and then back into the green. And I'm
• 20:24
  Speaker 13: looking at the company up about one point two percent
• 20:27
  Speaker 13: this year. But then when I'm looking at bid, we're
• 20:29
  Speaker 13: seeing shares up thirty one percent this year. So when
• 20:32
  Speaker 13: you're looking at the comparison, it's definitely very drastic. What
• 20:35
  Speaker 13: is keeping these US EV makers behind? Is it appetite
• 20:40
  Speaker 13: from consumers? What exactly is the drag here?
• 20:43
  Speaker 12: That's that's a great question. I think the Chinese automakers
• 20:47
  Speaker 12: know their consumers a lot better than the Western automakers.
• 20:53
  Speaker 12: You know, Chinese automakers, Chinese industry, auto industry has about
• 20:57
  Speaker 12: two hundred EV models for the mass market. You know
• 21:02
  Speaker 12: that it's it's a lot more than what you find
• 21:04
  Speaker 12: in the US. You know, you can probably count them
• 21:07
  Speaker 12: with your fingers in the US in terms of number
• 21:10
  Speaker 12: of models under you know, fifty thousand dollars. So they,
• 21:15
  Speaker 12: you know, the Chinese automakers know the Chinese consumer. They
• 21:19
  Speaker 12: want cheaper evs, they want you know, cool user interface,
• 21:25
  Speaker 12: high tech user interface, and you know, the Chinese automakers
• 21:29
  Speaker 12: are able to deliver those what the consumer wants over there.
• 21:35
  Speaker 2: So talk to us about just the rest of the world.
• 21:38
  Speaker 7: In EV.
• 21:40
  Speaker 2: Consumption here, Steve, because I think it differs around the world.
• 21:43
  Speaker 2: It feels like it's it's much weaker than expected here
• 21:46
  Speaker 2: in the US, but other parts of the world adoptions
• 21:48
  Speaker 2: much better. How did how did the companies think about it?
• 21:52
  Speaker 12: I mean, there's a there's a few things that actually
• 21:55
  Speaker 12: are presenting our hurdles for EVA adoptions, especially in the
• 21:59
  Speaker 12: Western hemisphere Western world. It's really the infrastructure. It's really
• 22:05
  Speaker 12: the affordability of the vehicles. Look, you know, charging infrastructure.
• 22:11
  Speaker 12: It's only in the US, it's only a fraction of
• 22:14
  Speaker 12: what it is in China. And again EV models, I
• 22:18
  Speaker 12: think EV models are lacking, you know, especially the ones
• 22:22
  Speaker 12: under fifty thousand. But if you look in at twenty
• 22:25
  Speaker 12: twenty six and twenty twenty seven, you know there's gonna
• 22:29
  Speaker 12: be a whole slew of cheaper EV models from GM,
• 22:32
  Speaker 12: from Ford. Volkswagen's thinking about launching the ID two, which
• 22:37
  Speaker 12: is under thirty thousands. The Lentist is doing the same thing,
• 22:40
  Speaker 12: working with the Chinese partner, Leap Motor.
• 22:43
  Speaker 5: So I don't want.
• 22:45
  Speaker 12: To write off the you know, EV market, especially in
• 22:50
  Speaker 12: the West, just yet. I think there are hurdles to
• 22:53
  Speaker 12: work through the automakers are doing that. They're expanding their
• 22:57
  Speaker 12: supply chain to make sure they're able to build the
• 23:00
  Speaker 12: vehicles as cheap as possible and more affordable for the
• 23:05
  Speaker 12: mass market, the general consumer.
• 23:07
  Speaker 13: So when we're thinking about ev companies here in the US,
• 23:11
  Speaker 13: my main curiosity when I think about switching to an
• 23:14
  Speaker 13: EVCR myself and I want to do that, is there
• 23:16
  Speaker 13: enough infrastructure to support this transition. Of course, regionally maybe
• 23:20
  Speaker 13: if you think about California, they're going to have charging
• 23:22
  Speaker 13: stations everywhere. But it's also part of the concern is
• 23:25
  Speaker 13: the consumer wondering whether or not they're going to be
• 23:27
  Speaker 13: able to find a charging station as quickly as they
• 23:29
  Speaker 13: can find a gas station. Have there been developments there?
• 23:32
  Speaker 12: No, there is development there. There's a lot of charging
• 23:36
  Speaker 12: stations going up, but we're nowhere near what we need.
• 23:40
  Speaker 12: Like if you look at again comparing China in the US,
• 23:45
  Speaker 12: US only, and the number of charging station in the
• 23:48
  Speaker 12: US is only ten percent fifteen percent of what China has,
• 23:52
  Speaker 12: So there's still a lot more to go. So you know,
• 23:57
  Speaker 12: there's you know, there's the Infrastructure Act that's in place
• 24:00
  Speaker 12: to help that, but I think there needs to be
• 24:03
  Speaker 12: more private investments a lot of the consumers today that
• 24:07
  Speaker 12: on evs have to install chargers at home just so
• 24:11
  Speaker 12: that they can charge and not rely on the public
• 24:14
  Speaker 12: public infrastructure.
• 24:16
  Speaker 2: Our thanks to Bloomberg Intelligence. Senior Auto Adam Steve Mann.
• 24:19
  Speaker 2: Coming up on the program, we explore the fragility of
• 24:21
  Speaker 2: the commercial mortgage backed securities market.
• 24:24
  Speaker 5: You're listening to Bloomberg.
• 24:25
  Speaker 2: Intelligence on Bloomberg Radio, providing in research and data on
• 24:28
  Speaker 2: two thousand companies in one hundred and thirty industries. You
• 24:30
  Speaker 2: can access Bloomberg Intelligence via b I go on the terminal.
• 24:34
  Speaker 2: I'm Paul Sweeney. It's thirty minutes past the hour.
• 24:36
  Speaker 5: This is Bloomberg.
• 24:42
  Speaker 1: You're listening to Bloomberg Intelligence with Alex Steel and Paul
• 24:46
  Speaker 1: Sweeney on Bloomberg Radio.
• 24:50
  Speaker 5: I'm Paul Sweeney. Alex Steel is off this week.
• 24:52
  Speaker 2: For the first time since the Great Financial Crisis, buyers
• 24:55
  Speaker 2: have top rated commercial mortgage backed securities are suffering losses,
• 24:59
  Speaker 2: and within this market, pain is most acute in a
• 25:01
  Speaker 2: new breed of bonds known as single asset single bars
• 25:04
  Speaker 2: or Sasby's. For more guess sos Chessman and I were
• 25:07
  Speaker 2: joined by Carmen Arroyo Bloomberg News Credit reporter.
• 25:11
  Speaker 3: In May, we saw the first triple A bond commercial
• 25:14
  Speaker 3: mortgage triple A bond being hit backed by a single
• 25:17
  Speaker 3: office property, and then we started like digging into basically
• 25:21
  Speaker 3: the data to see what other buildings could get hit
• 25:23
  Speaker 3: and the results there's a few a ton of Like
• 25:27
  Speaker 3: the office properties across across the US have been distressed
• 25:30
  Speaker 3: for years, it just takes a long time for that
• 25:34
  Speaker 3: to reach bond holders, and now it's starting to get there.
• 25:37
  Speaker 3: So we kind of like analyze the data. We saw
• 25:39
  Speaker 3: at least like twelve other buildings are said to have
• 25:42
  Speaker 3: some type of loss. Some will be at the triple
• 25:45
  Speaker 3: A level, some will be just the investment grade portion.
• 25:49
  Speaker 3: There's definitely a lot of more pain to come.
• 25:50
  Speaker 4: Which regions across the US are most vulnerable.
• 25:54
  Speaker 3: It's all over, It's all over the US. Actually, we
• 25:57
  Speaker 3: saw there's buildings in New York, of course, Chicago, lays
• 25:59
  Speaker 3: And and Cisco, but there's also buildings in Kansas City.
• 26:02
  Speaker 3: Like it's it's kind of everywhere.
• 26:05
  Speaker 2: But if I'm holding a triple A bond, I expect
• 26:08
  Speaker 2: to get paid back here. So what's happening to these bonds?
• 26:12
  Speaker 2: Are they coming up for maturity and then the owner
• 26:15
  Speaker 2: has to refinance the bond or how's this soft playing out?
• 26:18
  Speaker 7: Sure?
• 26:18
  Speaker 3: So every triple A bone holder thinks they're going to
• 26:21
  Speaker 3: get paid back, that's why you buy it, But they,
• 26:25
  Speaker 3: like a lot of these buildings have not been receiving
• 26:27
  Speaker 3: interest on the bonds for a while, and the minute
• 26:30
  Speaker 3: like the presoul's drop and kind of like the owners
• 26:33
  Speaker 3: of the buildings get rid of them or like sell them.
• 26:37
  Speaker 3: The losses are realized, and the the gist of it
• 26:41
  Speaker 3: is that the buildings are worth like a fraction of
• 26:44
  Speaker 3: where they were worth like a few years ago. So
• 26:46
  Speaker 3: there's just not enough money to pay back everyone, not
• 26:48
  Speaker 3: even the triple A holders, and that that's the whole issue,
• 26:51
  Speaker 3: Like the real estate is just not worth it.
• 26:53
  Speaker 4: When you're speaking to triple A bondholders, what are they
• 26:56
  Speaker 4: telling you as far as why they might still be
• 26:58
  Speaker 4: holding onto that? That's the risk reward.
• 27:01
  Speaker 3: I A lot of the Triple A bondholders will get
• 27:04
  Speaker 3: some money back, like the lower trenches won't. And I'm
• 27:09
  Speaker 3: not sure if there's some market for that type of
• 27:12
  Speaker 3: like those type of bonds at the bit they may want.
• 27:14
  Speaker 2: Them, and I'm looking at I mean, you have a
• 27:17
  Speaker 2: big take story, which means it has great graphics in
• 27:19
  Speaker 2: addition to being.
• 27:19
  Speaker 5: Well reported, well sourced.
• 27:21
  Speaker 2: Some of these buildings, I mean New York, Chicago, La
• 27:24
  Speaker 2: La West. I mean five fifty five West fifth Street,
• 27:26
  Speaker 2: seven to twenty five South Figaroa.
• 27:27
  Speaker 5: I know that building. But these scenes are being.
• 27:30
  Speaker 2: Valued at significant discounts, right, and some not even covering
• 27:33
  Speaker 2: the amount of the outstanding loan. So that's where the
• 27:37
  Speaker 2: that's where the problems come in.
• 27:39
  Speaker 3: Yeah, that's the problem. And it's also like a lot
• 27:41
  Speaker 3: of those buildings depend on one single tenant. So the
• 27:43
  Speaker 3: minute that tenant's like, look my leads is up, I'm leaving.
• 27:46
  Speaker 3: I want a newer office. This building is really old,
• 27:50
  Speaker 3: the bonds just shrop in price because that's where they're
• 27:53
  Speaker 3: getting the income.
• 27:54
  Speaker 4: I think anytime it comes to anything revolving around real estate,
• 27:57
  Speaker 4: as we know very well, people want to harken back
• 27:59
  Speaker 4: to the global financial crisis in two thousand e but
• 28:01
  Speaker 4: this is a very different situation, especially coming out of
• 28:04
  Speaker 4: the pandemic, and talk to us more about how this
• 28:06
  Speaker 4: is a very small subset of the bond market.
• 28:09
  Speaker 3: When you're looking at this, yes, definitely, like there's definitely
• 28:12
  Speaker 3: some type of eco to the like similar to the
• 28:14
  Speaker 3: financial crisis in the sense that like that you don't
• 28:16
  Speaker 3: really see losses on the principal level and triple A
• 28:18
  Speaker 3: bonds like that hasn't happened since OAIDM. But again, like
• 28:22
  Speaker 3: it's just a few bonds within the commercial mortgage backed
• 28:25
  Speaker 3: securities market.
• 28:26
  Speaker 4: Right, So when you're speaking with your sources, I mean,
• 28:28
  Speaker 4: what are the risks of other broader ripple effects or
• 28:31
  Speaker 4: any sort of other red flags potentially brewing. And then
• 28:34
  Speaker 4: maybe the off side of that where there's more optimism
• 28:36
  Speaker 4: of what could happen.
• 28:38
  Speaker 3: Yeah, I think like the risk is mainly for any
• 28:40
  Speaker 3: building that's old and that the tenants are walking, there's
• 28:44
  Speaker 3: going to be issues. But if any new building that
• 28:47
  Speaker 3: like you know, has a great reputation has a lot
• 28:49
  Speaker 3: of tenants, like there's that market is kind of booming
• 28:52
  Speaker 3: like right now in new issue markets, like buyers are
• 28:55
  Speaker 3: like just gobbling up the dead like, so it really
• 28:58
  Speaker 3: depends on the building.
• 28:59
  Speaker 2: Commentserve sense for you're reporting that the office real estate
• 29:02
  Speaker 2: market is at are near bottom or anybody calling that
• 29:05
  Speaker 2: or too, Yeah, a lot.
• 29:06
  Speaker 3: Of people are calling that. Like when we start to
• 29:08
  Speaker 3: see the office buildings get sold, that's where we've reached
• 29:12
  Speaker 3: the bottom and then everything is going to go up.
• 29:14
  Speaker 4: Is there a time period timeline as far as how
• 29:17
  Speaker 4: long that could take.
• 29:18
  Speaker 3: Yeah, it can take a long time because the leases
• 29:21
  Speaker 3: are so long that tenants may be locked in for
• 29:24
  Speaker 3: like years. But most people are saying it's between now
• 29:27
  Speaker 3: in the next few months.
• 29:28
  Speaker 2: Thanks to Bloomberg Credit reporter Carmen Arroyo. Next, we look
• 29:32
  Speaker 2: at bank earnings. UBS posted third quarter profits that almost
• 29:35
  Speaker 2: doubled expectations, adding to evidence that the bank's integration of
• 29:38
  Speaker 2: Credit Suite is on track. For more guests. Alison Williams,
• 29:42
  Speaker 2: Bloomberg Intelligence Senior Analysts, Global Banks Asset Managers breaks down
• 29:46
  Speaker 2: the reports.
• 29:47
  Speaker 14: So a really strong quarter. Fundamentals look good.
• 29:50
  Speaker 15: I think there are some concerns about capital, but people
• 29:53
  Speaker 15: look at their business. Sixty percent growth in their America's
• 29:58
  Speaker 15: trading business, so wow is the word. It was a
• 30:02
  Speaker 15: record record third quarter trading for them.
• 30:06
  Speaker 14: Keep in mind that third quarter tends to be weak, so.
• 30:10
  Speaker 15: But it was the strongest third quarter they've ever had
• 30:14
  Speaker 15: and that was really due to cash, equities and derivatives
• 30:18
  Speaker 15: strengths of the bank. So twenty seven percent growth really
• 30:22
  Speaker 15: looking good and a lot of momentum coming into the
• 30:24
  Speaker 15: fourth quarter.
• 30:25
  Speaker 14: The other positive for UBS.
• 30:27
  Speaker 15: You know, that core wealth franchise is really what sets
• 30:32
  Speaker 15: them apart, and they did have very strong flows inflows
• 30:36
  Speaker 15: across all the regions, especially Asia, so that's also very good.
• 30:41
  Speaker 15: And then on the deal execution side, we also like
• 30:44
  Speaker 15: what we're seeing there in terms of.
• 30:46
  Speaker 14: The cost progress.
• 30:48
  Speaker 15: You know, the grossed cost saves are over fifty percent
• 30:52
  Speaker 15: the way there, so that's a positive. The non core unit,
• 30:56
  Speaker 15: so that's you know, stuff they want to get rid of.
• 30:58
  Speaker 15: They're making cuts there faster than expected. But capital, as
• 31:02
  Speaker 15: I said, that was the one thing I think, you know,
• 31:04
  Speaker 15: investors are still a little bit skittish on. They did
• 31:08
  Speaker 15: actually take a cut to their capital ratio in the
• 31:12
  Speaker 15: quarter basically because they voluntarily are kind of giving up
• 31:16
  Speaker 15: some accounting relief. So you know, I think that that's
• 31:20
  Speaker 15: you know, that's accounting is sort of just noise in
• 31:24
  Speaker 15: my view. But they did say that, you know, they're
• 31:28
  Speaker 15: not sure if when they report the fourth quarter of February,
• 31:31
  Speaker 15: if they're going to be able to give.
• 31:32
  Speaker 14: Guidance on buybacks.
• 31:34
  Speaker 15: And that's because you know, while they're executing on this deal, fundamentally,
• 31:40
  Speaker 15: regulators you know, are concerned about the size and they
• 31:43
  Speaker 15: may force them to hold more capital.
• 31:46
  Speaker 2: How representative is U B s ubs of kind of
• 31:48
  Speaker 2: some of the other European banks, Allison, So.
• 31:52
  Speaker 15: It's interesting that you know, you banced versus the other banks.
• 31:56
  Speaker 15: They are more skewed to the equities business. They have
• 32:00
  Speaker 15: a very strong US presence, as you said, they also
• 32:03
  Speaker 15: tend to be strong in Asia, and we really saw
• 32:05
  Speaker 15: a lot.
• 32:06
  Speaker 14: Of strength their late quarter that benefited.
• 32:08
  Speaker 15: You know, the companies such as JP Morgan and Morgan Stanley.
• 32:13
  Speaker 15: Deutsche Bank does not have the equities business, but they
• 32:15
  Speaker 15: were very strong in thick But generally we did hear
• 32:19
  Speaker 15: about strength across regions, across cash and derivatives, and derivatives
• 32:24
  Speaker 15: is a strength for those two French banks.
• 32:27
  Speaker 2: We wrap up the show by looking ahead towards the
• 32:29
  Speaker 2: US presidential elections, specifically the impact that business leaders can
• 32:33
  Speaker 2: make by advocating for safe and secure elections. For more.
• 32:36
  Speaker 2: Billy Lipschultz and I spoke with rhtt Budle, CEO of
• 32:39
  Speaker 2: Public Private Strategies.
• 32:41
  Speaker 16: So first of all, I mean, you know, America, as
• 32:43
  Speaker 16: we know, you know, over the last you know, set
• 32:46
  Speaker 16: of election cycles has primarily had very safe and secure elections.
• 32:49
  Speaker 16: And I think we're feeling confident about all the elections
• 32:53
  Speaker 16: to date, and many of the you know, state local
• 32:55
  Speaker 16: officius have worked very hard to prepare. I think, you know,
• 32:59
  Speaker 16: one of the big questions is, you know, we probably
• 33:03
  Speaker 16: will not have the exact results of the election on
• 33:05
  Speaker 16: election night, and so you know, it might be until
• 33:08
  Speaker 16: Saturday or Sunday until we know an official winner. And
• 33:11
  Speaker 16: so one of the pieces that we've been thinking a
• 33:12
  Speaker 16: lot about is really making sure that folks are preparing
• 33:15
  Speaker 16: for that, that they know that every vote is still
• 33:17
  Speaker 16: being counted and that the process might just take a while.
• 33:20
  Speaker 16: But that is the important role of democracy, making sure
• 33:22
  Speaker 16: every vote gets counted, and particularly for business owners, understanding
• 33:26
  Speaker 16: that this sort of period of uncertainty is a really
• 33:29
  Speaker 16: important moment for businesses to be able to you know,
• 33:32
  Speaker 16: bring some calm to the market, to be able to
• 33:34
  Speaker 16: say this is how democracy plays out, not just in
• 33:37
  Speaker 16: the role that they play in the markets, but also
• 33:38
  Speaker 16: in the role that they play as community leaders. You know,
• 33:41
  Speaker 16: for a lot of CEOs who have employees, this can
• 33:43
  Speaker 16: be a fraught time, for example, and so it's really
• 33:46
  Speaker 16: important to know that you know, every vote will be counted.
• 33:49
  Speaker 16: The elections are on part of be very safe and secure,
• 33:52
  Speaker 16: but we may have a period of uncertainty and that's okay,
• 33:55
  Speaker 16: and we just need to understand that that might be
• 33:57
  Speaker 16: the case. But it's an important part of letting democracy
• 34:01
  Speaker 16: play out.
• 34:01
  Speaker 11: Well, I think back to twenty twenty when it took
• 34:04
  Speaker 11: a few days, but we were still in the midst
• 34:06
  Speaker 11: of the pandemic. Now in twenty twenty four, people will
• 34:09
  Speaker 11: be back into the office, back at work, back on
• 34:11
  Speaker 11: subways here in the New York and commuting around the country.
• 34:15
  Speaker 11: How does that actually kind of impact a delayed ruling
• 34:19
  Speaker 11: or delayed decision on who in fact will win the election,
• 34:22
  Speaker 11: especially as we see a number of contested seats across
• 34:25
  Speaker 11: the House and Senate.
• 34:27
  Speaker 5: Yeah.
• 34:27
  Speaker 16: Look, we're so used to having everything, you know, be
• 34:29
  Speaker 16: so instant instantaneous. We're used to obviously having a result,
• 34:33
  Speaker 16: you know, called on election night. The reality is, at
• 34:35
  Speaker 16: least for the national presidential election, we expect it to
• 34:38
  Speaker 16: be very close, and there's a number of states that
• 34:41
  Speaker 16: probably will take a few days to make sure that
• 34:43
  Speaker 16: every ballot is counted. And so, you know, unlike where
• 34:47
  Speaker 16: we were all sort of huddled in our homes around
• 34:49
  Speaker 16: zoom screens or around TV screens before you know, we
• 34:53
  Speaker 16: are going to have people going back into the office.
• 34:55
  Speaker 16: And we know one of the things we learned in
• 34:57
  Speaker 16: twenty sixteen was that, you know, elections can a lot
• 35:00
  Speaker 16: of emotions with employees and start a lot of conversation.
• 35:04
  Speaker 16: And the reality is is the workplace has become a
• 35:06
  Speaker 16: really important square for civic engagement. Right It's one of
• 35:09
  Speaker 16: the places where people interact, they talk to each other,
• 35:12
  Speaker 16: and so it's become increasingly important that business leaders and
• 35:15
  Speaker 16: CEOs think about the role they can play and sort
• 35:17
  Speaker 16: of setting the tone of the role that they can
• 35:19
  Speaker 16: play in sort of depoliticizing things and making sure that
• 35:22
  Speaker 16: there's a safe space. We've see in a lot of
• 35:24
  Speaker 16: companies with employee research groups that there's the opportunity to
• 35:27
  Speaker 16: provide space for dialogue. And so part of the work
• 35:30
  Speaker 16: that we've been doing under an initiative we created it's
• 35:32
  Speaker 16: called the Business and Democracy Initiative, is we've been working
• 35:35
  Speaker 16: with business leaders to help them prepare for this election,
• 35:38
  Speaker 16: to not only sort of raise their voice in their
• 35:40
  Speaker 16: communities to talk about how this is the normal part
• 35:42
  Speaker 16: of democracy, but also to play an important role in
• 35:45
  Speaker 16: sort of depolarizing, de escalating and making sure that everyone's
• 35:49
  Speaker 16: voices are heard in this process over the next few weeks.
• 35:52
  Speaker 2: And the business leaders that you do speak to, what
• 35:55
  Speaker 2: is a concern level, if at all, that we have
• 35:57
  Speaker 2: a recreation of something like January to that level.
• 36:01
  Speaker 16: Look, I think overall people feel that the election is
• 36:03
  Speaker 16: going to be safe and secure and that every vote
• 36:05
  Speaker 16: is counted. So that's that is a good point, you know.
• 36:08
  Speaker 16: I think generally what I hear from business leaders is,
• 36:11
  Speaker 16: you know, increasingly, you know, risk has become an issue
• 36:15
  Speaker 16: with just instability, and so even beyond the elections, you know,
• 36:19
  Speaker 16: there's a broader issue with the government, for example, not
• 36:21
  Speaker 16: being able to pass you know, funding bills that go
• 36:24
  Speaker 16: on for years, or the debate over the debt selling
• 36:27
  Speaker 16: for example, and not being able to reach resolution. So
• 36:30
  Speaker 16: there's that broader sort of risk level. You know, America,
• 36:33
  Speaker 16: as we all know, is the most important economy in
• 36:35
  Speaker 16: the world, and so having that certainty is really important
• 36:37
  Speaker 16: for business leaders. And I think over the last few years,
• 36:40
  Speaker 16: businesses have become increasingly frustrated that the government hasn't been
• 36:44
  Speaker 16: able to provide more stability and that partisanship is continued
• 36:47
  Speaker 16: to sort of really, you know, make it difficult for
• 36:50
  Speaker 16: business leaders to make decisions, especially businesses who rely upon
• 36:53
  Speaker 16: the government for you know, a wide variety of factors.
• 36:56
  Speaker 16: So it's a broader sort of risk appetite rather than
• 36:59
  Speaker 16: just in this moment. But it's definitely something that boardrooms
• 37:02
  Speaker 16: and businesses are starting to look at our.
• 37:04
  Speaker 2: Thanks to Redbuddle, CEO of Public Private Strategies. That's this
• 37:08
  Speaker 2: week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in
• 37:11
  Speaker 2: depth research and data on two thousand companies and one
• 37:13
  Speaker 2: hundred and thirty industries.
• 37:15
  Speaker 5: And remember it.
• 37:15
  Speaker 2: You can access Bloomberg Intelligence via Bigo on the terminal.
• 37:18
  Speaker 2: I'm Paul Sweeney. Stay with us. Today's top stories and
• 37:21
  Speaker 2: global business headlines are coming up right now.