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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside my co host Matt Miller.
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Speaker 2: Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moven news.
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Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast.
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Speaker 3: We got some eco data today.
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Speaker 1: I've had a lot of economic data early over the last week, week and a half, a lot for the Federal Reserve to chew on as that thinks about its net next rate decision springing. Ira Jersey covers all that interest rate stuff for Bloomberg Intelligence. He's down in the Princeton campus of Bloomberg Intelligence the Core HQ for bi Ira. Again, we had some retail sales number today, some industrial production numbers came in. I guess a little bit weaker than expected. Anything here over the last several days changes your opinion that this Federal Reserve is probably going to raise rates here at the end of the month.
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Speaker 3: But and then after that, it's a I guess, still a guessing.
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Speaker 4: Yeah, it is probably still a guessing game pall afterward, especially since before the September meeting, we effectively get two months worth of data, right, so it's not just a single month like we kind of have now. In between the June and July meetings, you know, the data has been pretty mixed. Today's data is just proof of that. We had pretty weak industrial production numbers that doesn't look good. The good sector of manufacturing is not doing well in the United States, and indeed globally there's a slowdown in manufacturing. And then but on the other side, spending was really good when you look at the control group. So this is the GDP input from the retail sales numbers this morning, and that was solid. So you have very mixed data in terms of what's gone on business sector and maybe setting up for a recession versus you know, actual spending data which looks pretty good.
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Speaker 5: So IRA, in terms of what you anticipate the meetings look the meeting minutes looking like coming out of this next FED meeting next week, do you anticipate the majority of the conversation being about what the FED is going to do in the fall versus a justification for what we expect to be a hike next week.
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Speaker 4: Yes, So I don't think the minutes of this meeting will be particularly interesting because there's not a summary of economic projections that are coming out, so they don't you know, they always tweak, you know, in the inter meeting period kind of here's what happened. But those big discussions about more forward looking information will come more from the September meeting when we do get a new dot plot summary of economic projections, where do we think unemployment and GDP and everything else is going to be? So I think September will be much more telling in that regard. You know, my feeling is is that the Fed this week is going to say, Okay, we're hiking again. They basically promised that they were going to and they'll say, but we're going to reevaluate meeting by meeting, and they'll continue with that type of discussion. You know, you go back to this time last year, and the Fed was still saying, we're continuing to increase interest rates, right, so they were almost promising that they're going to keep going, not necessarily at what pace, but that they were going to keep hiking rates. And and now they're they're significantly more data dependent than they were a year ago. For each in between each individual meeting. So so so this is kind of like a placeholder meeting, I think in a way where September can be much more telling us to the future of interest rates.
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Speaker 1: Is this fed a reserve ever going to come out and say basically, hey, we did a good job. We got inflation down, it's going in the right direction. You know, we were aggressive, but it's working.
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Speaker 6: Well.
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Speaker 4: They've already started to say that that. You know, Jay Powell during his press conference and in some of the other conferences and and and and meetings that he's had in between, whether it was before Congress or over in Portugal at at at the ECB summit, he's basically said, look, inflation is trending in a direction that we like, but but the job's not done. So I think from his standpoint, from their standpoint, that they can they'll they'll won't say anything like that until it's very clear that say that the PC deflator is below three percent. Once you get there, I think they can say that like, we're approaching our target, and and then they'll pat themselves in the back maybe a little bit, and and basically say, you know, job's done, but we're being cautious.
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Speaker 5: And what's your timeline these days, Ira for when we can anticipate that celebration.
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Speaker 4: Yeah, so I think before the end of the year that the FED is going to be able to say, you know, we've gotten inflation back toward we're near our our target level of two percent. So because of that, we can remain on hold, and you know, they'll always continue to use the buzzwords of we're continuing to watch you know, economic activity and inflation and jobs and everything else. I don't think that they're going to cut rates until later next year, so a little bit beyond what's what's being priced, it's still pricing for cuts in the first quarter of next year, or the first cut in the first quarter of next year. I think it's gonna they're not going to ultimately cut until later next year. Once they do, I think that the economy is going to be weak enough that they'll have to cut much more aggressively, maybe than what the market's pricing.
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Speaker 5: Well to Paul's point about when they can start to celebrate, I wonder when we might have a FED that does a little bit of a post mortem and looks at the lag in raising interest rates and maybe is open to discussing and an effort to build some credibility that they maybe drop the ball a little bit too early on. Do you anticipate anything like that happening.
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Speaker 4: Well, you know, I think everyone and the Federal Reserve always does some self reflection, and certainly they can be criticized for, you know, not even the rate hikes. Like if I were to do a post mortem on what the Federal Reserve did and the actions that it took, I think the single biggest thing that they did was a continued quantitative easing to long. You know, they could have ended quantitative easing in the spring of twenty twenty one and you know, started to hike in early twenty twenty two, similar to what they did, but they didn't take any hawkish actions until maybe it was a little bit too late. Now once they got going, they obviously, as we know, they really got going and you know, kind of played catch up. So and it's not unusual for central banks to do that because they don't want to be seen as hiking and tightening monetary.
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Speaker 3: Policy too early.
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Speaker 4: But there's other actions now that they can take other than the blunt instrument of actually hiking interest rates, you know, especially when they have balance sheet policy that they can play with IRA.
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Speaker 1: When you know, talk to institutional investors, what's the recession talk these days? And people think it's kind of off the table or at the very very least it can be short and shallow.
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Speaker 4: Yeah, most of the people that I talked to think that we're going to have some form of soft landing. I you know, I don't know if it's a recession, like you know, how you define a recession obviously matters a lot. Whether whether we get a recession that the NBER you know, classifies as one I think is still very much up in the air, and a lot of investors are kind of looking past that and saying, okay, look when we look at the hard data, when we look at the retail sales data, which is a hard data point because it's actual sales in the economy, that looks pretty good, and employment is hasn't yet completely rolled over. Although we have slowing job growth, we don't have yet have job losses, you know, we've it's pretty rare to have a recession and no job losses. So so I think a lot of people are very hopeful that we'll have a soft landing. You know, I think rates investors are a little more skeptical and a little more pessimistic than say equity investors that I've spoken to. But there's a lot of people who are confused because we do have this variety of data. Like I said that that, you know, you look at the ism surveys and they're suggesting that we're going to have a significant slow down. But at the same time, you get retail sales numbers like we have this morning, and people are like, yeah, you know, maybe the survey data is not going to be right.
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Speaker 1: All right, We're going to be on alert for more data. We obviously have at the FED next week with their announcement, our Jersey chief UoS interest rates strategist for Bloomberg Intelligence joining us there.
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Speaker 7: You're listening to the team Ken's are Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
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Speaker 1: After a brutal twenty twenty two in equities and Fixing Income, twenty twenty three is treating investors a lot better. Here started the first half of the year, SMP up about fifteen percent or so. We've added a little bit more to that since here in July. The question for a lot of folks is now, what do we do? So let's check in with somebody who does this stuff for a living. Karen Murphy, CIO of Kestra Investment Management. She joins us live here in our Bloomberg Interactive Brokers studio, no phoning, and in today. So Caraen, you know, a good first half of the year for a lot of investors, particularly those that on Apple and an Amazon and Meta and things like that. What are you telling your clients here as we kind of kick off the second half, Well, thanks.
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Speaker 6: So much for having me here. And we've called twenty twenty three the revenge of the growth stocks. So there's all those stocks that underperformed so much in twenty twenty two came back with a vengeance and really turned on a dime in the first half. But when you think about you know, largest seven stocks in the SMP were up about ninety percent year to date. Just mathematically speaking, that can't continue forever. So we've started to see the market broaden out a little bit. Russell two is coming back a little bit, seeing some big caps do better, so that's healthy for the market, so, you know, and there's a fair amount of economic momentum as well. You know, we're still cautious on kind of where we are in the economic cycle, but consumers remain really strong. Balancees are relatively hefty, so you know, in my mind, it's kind of a back to basics where you want to be able to have a diversified portfolio because nobody can call those big turning points and you can't be stuck in a handful of stocks that are suddenly going to turn around the wrong way.
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Speaker 5: You mentioned the Russell two K and they broke out of that key resistance level last week. I wonder to what extent you look at that versus the Dow breaking out of its key levels as well. What are you thinking in terms of the comparison of the two endses.
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Speaker 6: Well, Frankly, as a practitioner, the Dow we don't pay all that much attention to because it's a fairly concentrated measure of what's happening in the market. The Russell two is a pretty good representation of what's happening on the smaller side of the market. S and P six is also a very helpful indicator because you take out some of those really small cap names in the Russell two thousand that are not that meaningful. So all of those again are starting to see a little bit more life. But remember, like small caps have been beaten up for years, we really have never had that long kind of streak of small caps outperforming, at least not in recent history. So this could be a sign of some more resiliency in those smaller names.
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Speaker 1: On the fixing cob side, I mean, you know it was brutal, there was nowhere to hide, and fixed income this year I can just go sit in to your treasury and get four point seven percent. That feels like, you know, just paradise. What should I do in a fixed income? Should I be taking a little bit more risk than into your treasury?
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Speaker 6: Well, it's been so interesting to watch investor psychology with As you said, twenty twenty two, fixed income was left for dead. I mean, it was really an existential crisis, and we had a lot of clients who were coming to us saying, why do I own fixed income at all? This year is a very different story where all of a sudden people are very happy sitting in it too. Your treasury or a money market earning attractive returns that we haven't seen in decades. So the reality somewhere in between, fixed income is still a really important asset class. You can still build a really great, diverse side portfolio that will do well over time, but it's hard to kind of draw people out of that very safe place after the volatility that we had last year. So eventually, as we start to see the Yuell curve kind of revert get to a more normal position, I think gradually investors will be drawn out the curve and into some other asset classes. But you're right, right now, they're pretty comfortab Yeah.
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Speaker 5: And in terms of that volatility, obviously the banking turmoil, crisis, whatever term you want to use there comes to mind. How are you thinking about the long term effects of that. Do you think that it was overblown a little bit? Or did we underprice the impact?
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Speaker 6: I think there was a moment there where we were kind of looking across the financial abyss right, like we had three very large financial institutions that failed very quickly. The good news is that regulators already had a pretty good playbook from the financial crisis. They moved in size and force, and it was coordinated, so it worked out okay. From a systemic perspective, it didn't have to be that way, and I credit regulators with managing through that. But there are lasting implications, and the big one is tighter lending standards, and we're seeing that come through in force. Small businesses can't get loans. Loan officers are really tightening up, and that will be a drag on economic growth for the foreseeable future.
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Speaker 1: How about outside of the US are you suggesting your clients look at I don't know. For example, we've got the dollar pulling back off of its recent strength.
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Speaker 3: How do you think about outside of the US?
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Speaker 6: Yeah, similar to fixed income, you know, a lot of non US equity markets had kind of been left for dead because the S and P five hundred was the best performing asset class for a year after year. So we've been encouraging people to remember that non US stocks are still a really important part of a portfolio. In particular, you mentioned the dollar, So the dollar has started to retreat a little bit. If we have inflation licked here and Europe is still battling it, that will also be a drag on the dollar. So that is good for non US investments. But then also when we look at IFA valuations versus the US, US tends to trade at a higher evaluation relative to EFA in general, but that has gotten to like two and a half standard deviations above the norm. So it definitely looks like the valuation differential. You're being paid to take a little bit more risk outside the US.
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Speaker 5: And then okay, if you're getting paid to take on risk outside of the US, what is the allocation looking like then for those emerging markets?
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Speaker 6: So emerging markets is a little trickier because those have much larger kind of cycles. You know, there's been a lot of talk about China just not coming back online like it was expected. Some of those Asian emerging markets that rely a lot on China have actually been more resilient than expected. So emerging markets, I think is an important allocation to be able to have in a portfolio, but you want to size it appropriately. You know, if you're a very conservative investor, you don't want a huge amount of allocation there.
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Speaker 1: All right, we're just starting to really get into the teeth of earnings here. What are you guys and your teams, what are they kind of looking for this earning season? What are you kind of listening for on Ernie's calls?
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Speaker 6: So certainly the banks are going to be really important. We started to see some come out today. We talked about lending standards. So how cautious are companies or banks in particular being in terms of writing new credit? Also what about the credit that's already on their balance sheets? So consumers, you know, we're starting to see delinquencies tick up a little bit, what kind of behavior are they seeing? And then also commercial real estate office in particular, right We've we've seen a lot of concern there and it hogs up a lot of balance sheet on regional banks. So that's going to be very important. And I think more generally looking at consumer behavior, so are people starting to trade down a little bit? We're certainly seeing it outside the US, or people are trading too, you know, more private label, cheaper goods, and so how are people reacting, particularly in anticipation of things like student loan payments coming back?
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Speaker 3: Again?
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Speaker 5: When you think about trading down specifically, I feel like in the last earning cycle, on the consumer discretionary side, at least, it was kind of a mixed picture of the consumer like Target, Bad, Walmart, obviously good. How do you suss out the information that you're getting throughout and earning cycle to come to one conclusion about the consumer?
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Speaker 6: Yeah, it's a challenge your job because, as you point out, there wasn't a single tune right in the last earning season. You heard some areas of caution, some areas like no, we're good. Kind of have to put it all together, you know, like studying for the CFA, you're talking about mosaic theory. So that's really what it is. Taking all these little pieces and then stepping back to see what picture is forming. So I think we'll know a little bit more in a couple of weeks.
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Speaker 3: You're based in Austin, right, I am how long have you been there?
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Speaker 7: Cool?
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Speaker 6: Only a year?
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Speaker 3: Right, so you're one of those five I've been a Texas.
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Speaker 1: I'm just wondering where is Austin putting all these people that are you.
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Speaker 3: Putting like trailers or something? I mean, can Austin handle all these people coming down?
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Speaker 6: It has been a challenge. It is very difficult to get a dinner reservation on a Friday night.
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Speaker 3: How about how about traffic?
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Speaker 1: Is what we've seen in some of these southern cities even Atlanta hasn't been able to, you know, several decades after it exploded and growth to deal with the traffic.
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Speaker 6: Well, I always laugh when I hear Austin Nights complaining about the traffic. I mean, like, no offense, Austin Nights. I love you guys, but you know nothing about traffic.
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Speaker 8: I do not know.
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Speaker 6: I spent most of my life in New York City. Yeah, traffic in Austin is just fine.
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Speaker 1: And so is there. Now are people are they? What's that back to office situation in Austin? What are people generally doing?
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Speaker 6: So much more than what you would see here in New York City. So we're back four days a week and we haven't for a year, and so there's certainly a fair amount of people still remote and will probably remain that way, but simply because you know, commute times are much less than what you find in a place like New York. So a lot of people are back in the office at least a few.
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Speaker 3: Days a week. Is Austin still weird?
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Speaker 6: Oh for sure?
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Speaker 3: For sure. Yeah, keep Austin.
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Speaker 1: I love it.
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Speaker 3: Yeah, it's kind of loves a funny tag line.
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Speaker 5: No, Austin, Austin is amazing.
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Speaker 8: It's like the best and.
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Speaker 3: They have a schooler. I think right there, you.
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Speaker 8: Know, think got a small one.
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Speaker 1: All right, Karen Murphy, thanks so much for joining us. Kara Murphy's the CIO at Kestra Investment Management. She's based in Austin, Texas, but we got her live here in the Bloomberg Interactive Broker Studio, so we just appreciate that. Thank you very much for joining us.
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Speaker 7: Careen, you're listening to the tape cans Are Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
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Speaker 1: All right, I'm looking at the work function here. We have the FED obviously next week Wednesday, I think ninety three point six percent percentage likelihood of raising rates.
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Speaker 3: What do you do after that?
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Speaker 7: Though?
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Speaker 1: I mean, I think inflation is whipped here in the US, but nobody asked me my opinion, certainly not at the FED. I wonder how things are going around the world. Anakatrion joins US. She's a chief economist international for Van Longshot Kempen based in Amsterdam. So Anika give us a sense of I think inflation's whipped here in the US, I don't know. Talk to us about Europe. How are things? How's the inflation story playing out there?
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Speaker 9: Well, inflation is not whipped yet in Europe, and it's it's typical, you know, situation that Europe is behind the caa versus the US. So we hope that Europe will continue its pass But I guess the main issue is that especially services inflation, especially core inflation, it's remaining stubbornly high. And that's why Leguard, unlike Powell, actually has been very very outspoken. We are not done yet. So we can definitely expect more rate hikes from the ECB.
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Speaker 5: And when you look at what's going to happen here in the States, the next FED meeting is a kind of foregone conclusion of another hike. The real question is what's going to happen in the fall. What are you going to be looking at to suss out what the Fed might be doing come September? Are you're going to be looking at J Powell's commentary next week? Other FEDS speak. What's your input there?
00:19:32
Speaker 9: Yeah, Well, the minutes are always fascinating because in the last set of minutes, I think there was a slip of the tongue that we saw using between the language of pause and skip, because initially it was paused, then suddenly the word skip came out, and then oh gosh, no, you know, pause again. So I think the minutes are interesting also looking at what the consensus is, what are the other officials saying? And that was interesting last time because the majority we're talking about two hikes from here, whereas a couple of months ago that absolutely wasn't the case. So that incremental change in language.
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Speaker 8: Across the whole board is interesting.
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Speaker 9: But by far the most important thing is also in the US, what is going to happen to core inflation? And yes, you know, it looked less bad than expected in the last print, but we're still nowhere near the two percent targeted number, and maybe last point, if I may, the two percent targeted number, I don't think you know you're going to see that coming at this stage, but you could argue is two percent even irrelevant target? Probably too early for that discussion to come up.
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Speaker 1: ANAKA, are you concerned that here in the US to FED either has gone or will go too far in push this economy into recession either late this year into next year.
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Speaker 3: That maybe could be avoided.
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Speaker 9: Yeah, I think I think the biggest concern is the following. Let's let's zoom out again. We've spent almost ten years massively under shooting the inflation target, and now you know, the last period we're massively over and shooting the inflation targets. So if you took a step back and said, well, look to tolerate this overshoot period because you know, apparently at ebbs and flows, fine, and then you know we don't need to be so aggressive on monetary policy. We don't need to keep aggressively hiking. Maybe we can avoid this hard landing. That's what the data was telling us last part, not the leading indicators, but the actual data. And we shouldn't be too worried. However, if also part of the credibility restoration that they're busy with, if they're extremely adamant we said two percent, we have to get to the two percent. If we don't get there, we keep on hiking, then yes, that could be really painful for the economy because the transition mechanism takes time.
00:21:38
Speaker 5: Well, and it takes time, especially in a country like the US where we have so much spending going on, particularly from the government when we look at Bidenomics and the infrastructure Bill. I kept making the joke this weekend because I was on a road trip that I was really seen biden armics in action, because the amount of construction there was in on the highways was absolutely unhinged. So, Anaga, when you think about the spending that's happening from the US government pumping that money into the economy, how does that square with the moves we're seen from the Federal Reserve to try and fight inflation. Can the two come together?
00:22:22
Speaker 9: Well, this is exactly the problem we're dealing with. And I'm sure it wasn't a fun road for having all that infrastructure work being put to play, but that's exactly the problem. So why is it that we believe that inflation is going to be high at structurally for longer. Partly it's because of what you just mentioned. You know, if you add up the Inflation Reduction Act, which ironically is actually resulting in more inflation, if you add up the infrastructure Bill, if you add up potential student forgiveness, et cetera, et cetera. That's more than a trillion dollars. That's just literally being pumped into an economy. We're at the other side of the table. You've got the monetary policy makers saying, gosh, we're trying to squeeze out the oxygen from the market. We want to reduce our balance sheets, we want to increase interest rates. And that's just a juxtaposition. It's very messy. So that's why you know, there's a fair chance inflation lasts for longer, and the two parties on the same table should figure out, you know, which direction are we going to let this thing going?
00:23:16
Speaker 1: Hey, Anika, the China. I'm going to talk a little bit about China the reopening. I think the expectations were quite high what that would mean maybe for the global economy, and we're seeing some weaker than expected data coming out of China. And I think about the exposure obviously in the US big trading partner, but also think about Europe because I think about some of these big European industrial companies and all the big equipment and stuff that they make they sell into China. Talk to us about kind of how you know European manufacturers in European industry are thinking about China and the pace of the reopening there.
00:23:50
Speaker 9: Yeah, and to your point, you know the pace of reopening. We were very excited in the beginning, and that excitement got abated because we see that things are really slowing down. And to what extents will the cent bank they're put more, as said, oxygen into the markets. We don't know, but I think that the company's issue is twofold. So on one fold, it's producing goods that are sold to China and looking at the disposable income and is that demand going to be robust enough to keep up those expoarded sales. But I think the other side is maybe more interesting, which is because of geopolitics, because of rewiring of supply chains, et cetera. Companies also European companies that were relying on part of their manufacturing footprint to be situated in China that have now got to find other locations. That's structurally inflationary in most cases. So you know, your cost of good souls are shooting up, and are you able to pass those you know, higher cost to your customers? Yes or no? You've already passed on quite a bit. Are consumers willing to pay those prices?
00:24:47
Speaker 8: Et cetera?
00:24:48
Speaker 9: That just exacerbates the issue.
00:24:50
Speaker 5: Yeah, and aga final thirty seconds here soft landing, how likely is that in your scenarios?
00:24:56
Speaker 9: It's well, it all depends on I think it's thirty seconds. Most important thing is how stubborn are central banks going to be on this two percent inflation targets? If we're willing to accept inflation being in the three four percent for longer than expected, and they won't be too aggressive the soft land who could very well happen if we stick to it and have to keep pushing policy according to the rule book. It could get more thankful.
00:25:21
Speaker 1: Anaka, thanks so much for joining us. We always appreciate getting your global view, your global perspective. Anika is the chief ec Commerce International for von launchhot Kempen, joining us via zoom from Amsterdam, giving us the global view.
00:25:35
Speaker 7: You're listening to the team. Can's our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
00:25:49
Speaker 1: Let's talk big banks, right, smack in the middle of earning season for the banks, the regional banks, the big money centers, all reporting numbers here. So let's round table this thing like we like to do. Alison Williams, She joins u Via Zoom and Herman Chen. We got them last owed here into our Bloomberg studio here in New York. Herman, let's start with you, because you were the source of all this problem several months ago, you in your regional banks, big super regional bank reported today P and C it stocks up.
00:26:17
Speaker 3: Yeah, what are you see from P and C A bit of a surprise.
00:26:20
Speaker 10: I think it's just PNC is getting caught up with some of the more positive tone from some of the other banks that reported today. But for P and C itself, the earnings missed estaments and the guidance was a bit weak relative to both net interest income and some other areas. So it's a bit of a challenge for regional banks. I think this will be sort of reflective across the group. Where the positive costser continue to rise, banks will continue to offer weaker guidance with respect to net interest income. Lonkre's going to be a bit of a challenge for the regional. It's because they don't have a lot of the areas that are growing, like credit cards, so it's going to be a bit of a slog over the next three quarters.
00:27:04
Speaker 5: Well, it seems like wealth management is the thing that's kind of keeping a lot of these banks from having less than great earnings this season. Allison, to what extent do you think that the wealth management side of these firms is going to be able to keep them from experiencing more of these headwinds from things like deposits and money market funds.
00:27:28
Speaker 11: Certainly for Morgan, Stanley was very strong of clows came in better than expected, their fee base flows better, investment management flows also better, and in fact revenue for them also came in a bit better.
00:27:42
Speaker 8: The net interest income side within.
00:27:45
Speaker 11: Wealth tends to feel a little bit more pressure than some of the core business, and that really is because those customers are a little bit more presensitive, the boundsies are higher, and the cost of deposits tends to rise faster there. But I think what we're seeing across the banks, if anything, is a little bit of a relief rally in the sense that deposit posts are going up. We are seeing that migration but it's not as bad as feared.
00:28:12
Speaker 8: Bag America did.
00:28:15
Speaker 11: Come in about in line, so that was not as positive as what we saw JP Morgan and City, but they did up their guidance for next quarter a little bit, and so I think that's a key positive and is helping the shares a little bit today.
00:28:28
Speaker 1: Hey Hermer, what have you heard so far and what do you expect to hear about? I know that you mentioned and also mentioned the cost of deposits going up, obviously, but how about just the deposits in general at these regional banks are concerned that they would be that they'd be losing deposits.
00:28:44
Speaker 3: What are you hearing so for yees?
00:28:46
Speaker 10: So deposits, actually, the overawhill balances have been pretty stable if you look at the reporting. But what's interesting is the remixing of those deposits, So the non interest sparing accounts, those are continuing to fall, so they're down about six seven percent across the group so far that have reported, and that's just indicative of the repricing pressures as folks that have checking accounts, they're moving their money to CDs and so the banks have to pay up for those. So that's another reason why we're seeing headwinds across the group.
00:29:17
Speaker 5: But it doesn't necessarily feel to consumers like they're getting a lot of bang for their buck when it comes to these deposits. Do you think that we're going to need to see a Bank of America offering better returns for people to keep their money in their bank accounts.
00:29:32
Speaker 10: Well, the banks are not going to give you the money the higher interst right, you have to take your money out of your deposit accounts open up a CD. So it takes a bit of some wherewith off from your consumer to do that. And the banks are just banking on folks just keeping their money and they're checking accounts. So that's that's really the dynamics that's playing out right now.
00:29:52
Speaker 1: Hey, Allison, what are we going to see from a gold and Sacks just tomorrow? What will you be looking for? What do you think the market's looking for?
00:29:59
Speaker 11: So we are going to see some charges at Goldman Sachs that we saw some severance costs at Morgan Stanley today, We're also going to see that at Goldman and we're also going to see the higher impairment. So that's definitely going to lead to some pressure on the reported numbers on a core basis, trading fees are down and despite things coming in a little bit better than expected, and there's you know, talk of constructive view those that revenue is going to be lower for Golden Sacks, they do they are the revenue leader and EM and I and that's a big headwind for the quarter. So for the bank, we're really going to be looking to see how they stacked up competitively on those revenue trends and then costs beyond some of the items I talked about, what is the core trend there?
00:30:46
Speaker 8: Because they really are working to improve their efficiency.
00:30:49
Speaker 1: Hellison, is there am I imagining this or is there any pressure from shareholders or any other external stakeholders on David Solomon right now? Given maybe what happened with the Consumer Bank for example.
00:31:01
Speaker 8: I mean, I think.
00:31:02
Speaker 11: There's a lot of talk and headlines around the Consumer Bank, but keep in mind that was not started under his review, so it was something sort of that he inherited, and it was you know, they took a shot.
00:31:14
Speaker 8: It was something different for Goldman Sachs.
00:31:16
Speaker 11: I would say that investors never really had a lot of faith in that strategy. It's certainly not why people bought the stock. It was more something that they tried out and could help over time.
00:31:29
Speaker 8: They are continuing with the.
00:31:31
Speaker 11: Consumer deposits side of the business, so there is, you know, something there, but certainly the lending strategy is something that they've decided it is just not something they're going to move forward with. They don't really have the competitive advantage there.
00:31:45
Speaker 5: And when it comes to the consumer Hermann, I want to bring you back in here because we talked a lot about the impact of credit tightening on consumers small businesses. So far with the PNC earnings, are we getting any indication as to how tight the credit is getting for those smaller consumers small businesses across the country.
00:32:06
Speaker 10: Yeah. So we're seeing actually consumer growth still fairly strong across the board, and where the demand has has fallen a bit is on the business side of the commercial side, and Allison Spanks have seen some strengthen credit card lending, so that's something that is helping some of the money center banks relative to the regionals, But the tighter underwriting is probably going to happen more on the commercial side of things, which really is a detriment to the regionals because they are more focused on commercial lending.
00:32:39
Speaker 1: Allison, are we seeing any share shifts in you know, the I think about the classic fixed income trading businesses is it. Are we seeing any big shifts there? There's still kind of Goldman, Sachs, Morgans, Stanley, Bank of America that the big players.
00:32:54
Speaker 8: I mean, it still is the big players.
00:32:56
Speaker 11: But what we have seen I mean over the last decade or so is market share games from the largest US competitors.
00:33:04
Speaker 8: In this particular quarter.
00:33:06
Speaker 11: Bank of America is really the standout showing more resilient ten percent growth. However, I would also point out that you know, Morgan Stanley and Globe and Sachs, who stills you well in the commodities business, are up some really against some really tough comparison. Morgan Stanley, you know, coming in even worse than than than had been expected. But if you looked, I think across the different verticals, the big getting bigger, and Bank of America really I think seeing the fruits of some of their investments in terms of the rates trading business and equities trading business.
00:33:41
Speaker 5: Alison really quickly here though, with Bank of America the bond losses hitting one hundred and six billion dollars is that going to weigh on the bank moving forward, heading into the next quarter.
00:33:55
Speaker 11: I think that the bank has sort of give keeps giving a lot more granular information about its on portfolio. Certainly that's just going to take time to manage that over time. And I think that the fact, as we learned with these banks, it's not just about the losses that you carry, but it's sort of about the strength of the deposits and the asset liability management that supports them. And what we are seeing at Bank of America deposits down with the industry, but certainly that broad based strength and especially on the new account side.
00:34:34
Speaker 1: All right, guys, what you just heard is some smart, smart analysis from some of our leading voices at Bloomberg Intelligence covering the banks. Alison Williams, she covers a big global banks, the investment banks. Herman Chan covers the regional banks, which have really come into focus really over the last several months. And we love getting those two smart people together help us kind of walk through what's happening out there with the banking system. So Alon Williams and Herman Chan, thank you so much for joining us here.
00:34:58
Speaker 7: You're listening to the tape cancer O live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
00:35:17
Speaker 1: I love biotech stocks because they are it seems like it's a binary situation. You hit it and a boom, or you don't and then it goes to zero. I mean, I do not have the stomach to trade these things, but a lot of folks do and they do it successfully. But one of the bio tech companies, by a farmer companies, is Recursion Pharmaceuticals.
00:35:37
Speaker 3: And we have the CEO Chris Gibson. He joins us.
00:35:39
Speaker 1: He's a CEO and co founder of Recursion Pharmaceuticals. Hey, Chris, thanks so much for joining us here. First of all, tell us what you guys do. What's your focus ad Recursion?
00:35:50
Speaker 12: Well, thanks, Paul high Madison. Yeah, our focus is to eliminate that bimodal worry that you just talked about, Paul. So we're bringing together the world of automation and computation to try and turn this artisanal, bespoke process of discovering medicines that takes ten to fifteen years and costs billions of dollars for each new approved drug, and turn it into something that looks more like an assembly line, that's much more predictable, that has much lower failure rates. And so we're using the latest in mL and AI that we build here with our team, using a lot of robots to do our experiments and exploring and mapping biology to try and discover new medicines at scale and one day bring down the price as well.
00:36:31
Speaker 5: Okay, so you know what I have to ask you about is the investment from Nvidia. I got a hit it at the top here, fifty million dollar private investment, and I had covered Recursion slightly previously, but I hadn't looked into your company as much, to be honest, until the news of that deal. To what extent do you see that infusion of investment as a game changer for what you're going to be able to do moving forward with Recursion.
00:37:00
Speaker 12: I think what's important for us about the investment and partnership with Nvidia is that we've been working together with them for the past three or four years. We run one of the fastest supercomputers in the world. I think it's number one thirty or something in the fastest computers in the world right now, and it's built on the Nvidia infrastructure. And what this thing, what I think this does is more signals to the rest of the world that in Vidia is excited about the biopharma market and that they see us as as a leader and someone to partner with. And so we're very excited to not only continue discovering new medicines internally here at Recursion, to continue our partnerships with Buyer and Roach Genentech in the fields of fibrosis and neuroscience, but now with Nvidia, to actually start to take some of the neural networks that we're building here at Recursion that we apply to our own data and to actually serve those on their marketplace Bioonemo, where other pharma companies who aren't yet our close partners can actually start to access those neural nets to advance their own research. And so we're very excited about that collaboration broadly.
00:38:00
Speaker 5: I wonder if you think that AI and the mania around AI is enough to help the biopharma industry kind of recover from some of the FED rate hiking impacts and headwinds that have impacted your industry over the past couple of years.
00:38:16
Speaker 12: Well, look, it's always hard in biopharma because our revenues are so deferred, and as Paul mentioned at the beginning, and really in the past, has been pretty bimodal, especially for startups. But I think in this particular case, mL andai is starting to give people an appreciation for how that could change. And you know, three or four years ago, even we in the biopharma industry hadn't fully accepted the potential of mL and ai. But Recursion was founded almost ten years ago specifically to bring these tools to bear. And like many founding stories, this is a company I founded out of graduate school. We were really going against the current in the early days. I would say now in every executive team in biopharma of the largest companies in the boardroom, all of them are thinking about the ways that mL and ai going to change this industry, and they're looking to companies like us who've been doing this for years to give them clues as to which direction things are going. Will it pull us out of the broader macrocycle? I have no idea. I learned a lot from our board chair Martin Chavez, who said not to make predictions about the future of the market, So I won't do that, all right.
00:39:17
Speaker 1: Recursion Pharmaceuticals is a publicly traded company. Our x r X is a very cool ticker symbol. It's got a market cap two point six billion stocks up seventy six percent year to date, in large part on that investment by Nvidia. Anything in Vidia touches seems to turn to gold here. So just to understand your company, Chris, does Recursion develop any drugs treatments on its own or do you license your technology to other biotech companies?
00:39:44
Speaker 12: All of the above, Paul. So, we've got five drugs in clinical trials right now. Three of those are in phase two or phase two to three trials. In fact, we fully enrolled our first phase two trial just a few weeks ago. We focus internally on rare genetic disease and precision oncology, where a company of our size and scale could run five, six, maybe one day ten twenty clinical programs, and then we partner with large companies like Bayer and Roch Genentech to go after huge intractable areas of biology like neuroscience, where you really need the capital, the resources, and the expertise of a large pharma company to go after Alzheimer's parkins at some of these big neurodiseases. And then I think what's exciting people recently about the Nvidia news is there's now this third value driver beyond our own pipeline, beyond our own partnerships to discover medicines. We're now starting to leverage some of the tools we built for mL and AI to look at a different part of the demand curve and start to partner with the rest of the biopharma industry to leverage our tools on some of their own data. And there will be more coming about this in the coming quarters, but certainly that's the plan with our friends at Nvidia.
00:40:52
Speaker 5: Talk to me about something that my mom would want to know that AI could help with when it comes to drug discovery.
00:41:01
Speaker 12: So today scientists are trying to understand this incredibly complex space of biology and chemistry using really, really old tools. And what we're doing at Recursion is the equivalent of building Google Maps, but for biology. So instead of focusing on one disease at a time, we're looking at every gene in the genome and millions of molecules in many different human cell types, using robots and sophisticated computational tools to literally give a map on a web interface for biologists and chemists to use, and it will look very much like Google Maps, but instead of looking at a street in your neighborhood or looking at a street view of a restaurant that you want to go to, this map will give the equivalent of that to biologists and chemists to understand things about biology and chemistry that until now we haven't been able to see, to understand the complexity of all around us. And we think by providing that map, people will be able to blotter better plot the course from disease to healthy, not just for one disease at a time, but for many. And that's what we'll be working on for the last ten years here in Madison.
00:42:05
Speaker 1: All right, Chris, fascinating stuff. And I guess I mean, when you get your undergraduate degree in bioengineering and biomedical engineering from Rice University, and if that's not enough, then you go get a PhD in bioengineering from the University of Utah, you better do something really important. I think that's what these folks are doing here. Chris Gibson, CEO and co founder of Recursion to Pharmaceuticals. The ticker is a great ticker for a drug maker r x RX and doing some interesting work there, really interesting work in the biopharma space. We appreciate getting a few minutes of Chris's time.
00:42:36
Speaker 2: Thanks for listening to the Bloomberg Markets podcasts. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three.
00:42:49
Speaker 1: And I'm fall Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside my co host Matt Miller.
00:00:05
Speaker 2: Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moven news.
00:00:14
Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast.
00:00:21
Speaker 3: We got some eco data today.
00:00:22
Speaker 1: I've had a lot of economic data early over the last week, week and a half, a lot for the Federal Reserve to chew on as that thinks about its net next rate decision springing. Ira Jersey covers all that interest rate stuff for Bloomberg Intelligence. He's down in the Princeton campus of Bloomberg Intelligence the Core HQ for bi Ira. Again, we had some retail sales number today, some industrial production numbers came in. I guess a little bit weaker than expected. Anything here over the last several days changes your opinion that this Federal Reserve is probably going to raise rates here at the end of the month.
00:00:56
Speaker 3: But and then after that, it's a I guess, still a guessing.
00:01:01
Speaker 4: Yeah, it is probably still a guessing game pall afterward, especially since before the September meeting, we effectively get two months worth of data, right, so it's not just a single month like we kind of have now. In between the June and July meetings, you know, the data has been pretty mixed. Today's data is just proof of that. We had pretty weak industrial production numbers that doesn't look good. The good sector of manufacturing is not doing well in the United States, and indeed globally there's a slowdown in manufacturing. And then but on the other side, spending was really good when you look at the control group. So this is the GDP input from the retail sales numbers this morning, and that was solid. So you have very mixed data in terms of what's gone on business sector and maybe setting up for a recession versus you know, actual spending data which looks pretty good.
00:01:54
Speaker 5: So IRA, in terms of what you anticipate the meetings look the meeting minutes looking like coming out of this next FED meeting next week, do you anticipate the majority of the conversation being about what the FED is going to do in the fall versus a justification for what we expect to be a hike next week.
00:02:12
Speaker 4: Yes, So I don't think the minutes of this meeting will be particularly interesting because there's not a summary of economic projections that are coming out, so they don't you know, they always tweak, you know, in the inter meeting period kind of here's what happened. But those big discussions about more forward looking information will come more from the September meeting when we do get a new dot plot summary of economic projections, where do we think unemployment and GDP and everything else is going to be? So I think September will be much more telling in that regard. You know, my feeling is is that the Fed this week is going to say, Okay, we're hiking again. They basically promised that they were going to and they'll say, but we're going to reevaluate meeting by meeting, and they'll continue with that type of discussion. You know, you go back to this time last year, and the Fed was still saying, we're continuing to increase interest rates, right, so they were almost promising that they're going to keep going, not necessarily at what pace, but that they were going to keep hiking rates. And and now they're they're significantly more data dependent than they were a year ago. For each in between each individual meeting. So so so this is kind of like a placeholder meeting, I think in a way where September can be much more telling us to the future of interest rates.
00:03:26
Speaker 1: Is this fed a reserve ever going to come out and say basically, hey, we did a good job. We got inflation down, it's going in the right direction. You know, we were aggressive, but it's working.
00:03:37
Speaker 6: Well.
00:03:38
Speaker 4: They've already started to say that that. You know, Jay Powell during his press conference and in some of the other conferences and and and and meetings that he's had in between, whether it was before Congress or over in Portugal at at at the ECB summit, he's basically said, look, inflation is trending in a direction that we like, but but the job's not done. So I think from his standpoint, from their standpoint, that they can they'll they'll won't say anything like that until it's very clear that say that the PC deflator is below three percent. Once you get there, I think they can say that like, we're approaching our target, and and then they'll pat themselves in the back maybe a little bit, and and basically say, you know, job's done, but we're being cautious.
00:04:23
Speaker 5: And what's your timeline these days, Ira for when we can anticipate that celebration.
00:04:29
Speaker 4: Yeah, so I think before the end of the year that the FED is going to be able to say, you know, we've gotten inflation back toward we're near our our target level of two percent. So because of that, we can remain on hold, and you know, they'll always continue to use the buzzwords of we're continuing to watch you know, economic activity and inflation and jobs and everything else. I don't think that they're going to cut rates until later next year, so a little bit beyond what's what's being priced, it's still pricing for cuts in the first quarter of next year, or the first cut in the first quarter of next year. I think it's gonna they're not going to ultimately cut until later next year. Once they do, I think that the economy is going to be weak enough that they'll have to cut much more aggressively, maybe than what the market's pricing.
00:05:16
Speaker 5: Well to Paul's point about when they can start to celebrate, I wonder when we might have a FED that does a little bit of a post mortem and looks at the lag in raising interest rates and maybe is open to discussing and an effort to build some credibility that they maybe drop the ball a little bit too early on. Do you anticipate anything like that happening.
00:05:39
Speaker 4: Well, you know, I think everyone and the Federal Reserve always does some self reflection, and certainly they can be criticized for, you know, not even the rate hikes. Like if I were to do a post mortem on what the Federal Reserve did and the actions that it took, I think the single biggest thing that they did was a continued quantitative easing to long. You know, they could have ended quantitative easing in the spring of twenty twenty one and you know, started to hike in early twenty twenty two, similar to what they did, but they didn't take any hawkish actions until maybe it was a little bit too late. Now once they got going, they obviously, as we know, they really got going and you know, kind of played catch up. So and it's not unusual for central banks to do that because they don't want to be seen as hiking and tightening monetary.
00:06:29
Speaker 3: Policy too early.
00:06:31
Speaker 4: But there's other actions now that they can take other than the blunt instrument of actually hiking interest rates, you know, especially when they have balance sheet policy that they can play with IRA.
00:06:42
Speaker 1: When you know, talk to institutional investors, what's the recession talk these days? And people think it's kind of off the table or at the very very least it can be short and shallow.
00:06:53
Speaker 4: Yeah, most of the people that I talked to think that we're going to have some form of soft landing. I you know, I don't know if it's a recession, like you know, how you define a recession obviously matters a lot. Whether whether we get a recession that the NBER you know, classifies as one I think is still very much up in the air, and a lot of investors are kind of looking past that and saying, okay, look when we look at the hard data, when we look at the retail sales data, which is a hard data point because it's actual sales in the economy, that looks pretty good, and employment is hasn't yet completely rolled over. Although we have slowing job growth, we don't have yet have job losses, you know, we've it's pretty rare to have a recession and no job losses. So so I think a lot of people are very hopeful that we'll have a soft landing. You know, I think rates investors are a little more skeptical and a little more pessimistic than say equity investors that I've spoken to. But there's a lot of people who are confused because we do have this variety of data. Like I said that that, you know, you look at the ism surveys and they're suggesting that we're going to have a significant slow down. But at the same time, you get retail sales numbers like we have this morning, and people are like, yeah, you know, maybe the survey data is not going to be right.
00:08:07
Speaker 1: All right, We're going to be on alert for more data. We obviously have at the FED next week with their announcement, our Jersey chief UoS interest rates strategist for Bloomberg Intelligence joining us there.
00:08:20
Speaker 7: You're listening to the team Ken's are Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
00:08:34
Speaker 1: After a brutal twenty twenty two in equities and Fixing Income, twenty twenty three is treating investors a lot better. Here started the first half of the year, SMP up about fifteen percent or so. We've added a little bit more to that since here in July. The question for a lot of folks is now, what do we do? So let's check in with somebody who does this stuff for a living. Karen Murphy, CIO of Kestra Investment Management. She joins us live here in our Bloomberg Interactive Brokers studio, no phoning, and in today. So Caraen, you know, a good first half of the year for a lot of investors, particularly those that on Apple and an Amazon and Meta and things like that. What are you telling your clients here as we kind of kick off the second half, Well, thanks.
00:09:10
Speaker 6: So much for having me here. And we've called twenty twenty three the revenge of the growth stocks. So there's all those stocks that underperformed so much in twenty twenty two came back with a vengeance and really turned on a dime in the first half. But when you think about you know, largest seven stocks in the SMP were up about ninety percent year to date. Just mathematically speaking, that can't continue forever. So we've started to see the market broaden out a little bit. Russell two is coming back a little bit, seeing some big caps do better, so that's healthy for the market, so, you know, and there's a fair amount of economic momentum as well. You know, we're still cautious on kind of where we are in the economic cycle, but consumers remain really strong. Balancees are relatively hefty, so you know, in my mind, it's kind of a back to basics where you want to be able to have a diversified portfolio because nobody can call those big turning points and you can't be stuck in a handful of stocks that are suddenly going to turn around the wrong way.
00:10:04
Speaker 5: You mentioned the Russell two K and they broke out of that key resistance level last week. I wonder to what extent you look at that versus the Dow breaking out of its key levels as well. What are you thinking in terms of the comparison of the two endses.
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Speaker 6: Well, Frankly, as a practitioner, the Dow we don't pay all that much attention to because it's a fairly concentrated measure of what's happening in the market. The Russell two is a pretty good representation of what's happening on the smaller side of the market. S and P six is also a very helpful indicator because you take out some of those really small cap names in the Russell two thousand that are not that meaningful. So all of those again are starting to see a little bit more life. But remember, like small caps have been beaten up for years, we really have never had that long kind of streak of small caps outperforming, at least not in recent history. So this could be a sign of some more resiliency in those smaller names.
00:10:56
Speaker 1: On the fixing cob side, I mean, you know it was brutal, there was nowhere to hide, and fixed income this year I can just go sit in to your treasury and get four point seven percent. That feels like, you know, just paradise. What should I do in a fixed income? Should I be taking a little bit more risk than into your treasury?
00:11:12
Speaker 6: Well, it's been so interesting to watch investor psychology with As you said, twenty twenty two, fixed income was left for dead. I mean, it was really an existential crisis, and we had a lot of clients who were coming to us saying, why do I own fixed income at all? This year is a very different story where all of a sudden people are very happy sitting in it too. Your treasury or a money market earning attractive returns that we haven't seen in decades. So the reality somewhere in between, fixed income is still a really important asset class. You can still build a really great, diverse side portfolio that will do well over time, but it's hard to kind of draw people out of that very safe place after the volatility that we had last year. So eventually, as we start to see the Yuell curve kind of revert get to a more normal position, I think gradually investors will be drawn out the curve and into some other asset classes. But you're right, right now, they're pretty comfortab Yeah.
00:12:00
Speaker 5: And in terms of that volatility, obviously the banking turmoil, crisis, whatever term you want to use there comes to mind. How are you thinking about the long term effects of that. Do you think that it was overblown a little bit? Or did we underprice the impact?
00:12:16
Speaker 6: I think there was a moment there where we were kind of looking across the financial abyss right, like we had three very large financial institutions that failed very quickly. The good news is that regulators already had a pretty good playbook from the financial crisis. They moved in size and force, and it was coordinated, so it worked out okay. From a systemic perspective, it didn't have to be that way, and I credit regulators with managing through that. But there are lasting implications, and the big one is tighter lending standards, and we're seeing that come through in force. Small businesses can't get loans. Loan officers are really tightening up, and that will be a drag on economic growth for the foreseeable future.
00:12:54
Speaker 1: How about outside of the US are you suggesting your clients look at I don't know. For example, we've got the dollar pulling back off of its recent strength.
00:13:05
Speaker 3: How do you think about outside of the US?
00:13:07
Speaker 6: Yeah, similar to fixed income, you know, a lot of non US equity markets had kind of been left for dead because the S and P five hundred was the best performing asset class for a year after year. So we've been encouraging people to remember that non US stocks are still a really important part of a portfolio. In particular, you mentioned the dollar, So the dollar has started to retreat a little bit. If we have inflation licked here and Europe is still battling it, that will also be a drag on the dollar. So that is good for non US investments. But then also when we look at IFA valuations versus the US, US tends to trade at a higher evaluation relative to EFA in general, but that has gotten to like two and a half standard deviations above the norm. So it definitely looks like the valuation differential. You're being paid to take a little bit more risk outside the US.
00:13:53
Speaker 5: And then okay, if you're getting paid to take on risk outside of the US, what is the allocation looking like then for those emerging markets?
00:14:03
Speaker 6: So emerging markets is a little trickier because those have much larger kind of cycles. You know, there's been a lot of talk about China just not coming back online like it was expected. Some of those Asian emerging markets that rely a lot on China have actually been more resilient than expected. So emerging markets, I think is an important allocation to be able to have in a portfolio, but you want to size it appropriately. You know, if you're a very conservative investor, you don't want a huge amount of allocation there.
00:14:29
Speaker 1: All right, we're just starting to really get into the teeth of earnings here. What are you guys and your teams, what are they kind of looking for this earning season? What are you kind of listening for on Ernie's calls?
00:14:39
Speaker 6: So certainly the banks are going to be really important. We started to see some come out today. We talked about lending standards. So how cautious are companies or banks in particular being in terms of writing new credit? Also what about the credit that's already on their balance sheets? So consumers, you know, we're starting to see delinquencies tick up a little bit, what kind of behavior are they seeing? And then also commercial real estate office in particular, right We've we've seen a lot of concern there and it hogs up a lot of balance sheet on regional banks. So that's going to be very important. And I think more generally looking at consumer behavior, so are people starting to trade down a little bit? We're certainly seeing it outside the US, or people are trading too, you know, more private label, cheaper goods, and so how are people reacting, particularly in anticipation of things like student loan payments coming back?
00:15:27
Speaker 3: Again?
00:15:28
Speaker 5: When you think about trading down specifically, I feel like in the last earning cycle, on the consumer discretionary side, at least, it was kind of a mixed picture of the consumer like Target, Bad, Walmart, obviously good. How do you suss out the information that you're getting throughout and earning cycle to come to one conclusion about the consumer?
00:15:47
Speaker 6: Yeah, it's a challenge your job because, as you point out, there wasn't a single tune right in the last earning season. You heard some areas of caution, some areas like no, we're good. Kind of have to put it all together, you know, like studying for the CFA, you're talking about mosaic theory. So that's really what it is. Taking all these little pieces and then stepping back to see what picture is forming. So I think we'll know a little bit more in a couple of weeks.
00:16:12
Speaker 3: You're based in Austin, right, I am how long have you been there?
00:16:14
Speaker 7: Cool?
00:16:15
Speaker 6: Only a year?
00:16:16
Speaker 3: Right, so you're one of those five I've been a Texas.
00:16:18
Speaker 1: I'm just wondering where is Austin putting all these people that are you.
00:16:20
Speaker 3: Putting like trailers or something? I mean, can Austin handle all these people coming down?
00:16:26
Speaker 6: It has been a challenge. It is very difficult to get a dinner reservation on a Friday night.
00:16:30
Speaker 3: How about how about traffic?
00:16:31
Speaker 1: Is what we've seen in some of these southern cities even Atlanta hasn't been able to, you know, several decades after it exploded and growth to deal with the traffic.
00:16:38
Speaker 6: Well, I always laugh when I hear Austin Nights complaining about the traffic. I mean, like, no offense, Austin Nights. I love you guys, but you know nothing about traffic.
00:16:46
Speaker 8: I do not know.
00:16:46
Speaker 6: I spent most of my life in New York City. Yeah, traffic in Austin is just fine.
00:16:51
Speaker 1: And so is there. Now are people are they? What's that back to office situation in Austin? What are people generally doing?
00:16:57
Speaker 6: So much more than what you would see here in New York City. So we're back four days a week and we haven't for a year, and so there's certainly a fair amount of people still remote and will probably remain that way, but simply because you know, commute times are much less than what you find in a place like New York. So a lot of people are back in the office at least a few.
00:17:13
Speaker 3: Days a week. Is Austin still weird?
00:17:15
Speaker 6: Oh for sure?
00:17:16
Speaker 3: For sure. Yeah, keep Austin.
00:17:18
Speaker 1: I love it.
00:17:18
Speaker 3: Yeah, it's kind of loves a funny tag line.
00:17:20
Speaker 5: No, Austin, Austin is amazing.
00:17:22
Speaker 8: It's like the best and.
00:17:23
Speaker 3: They have a schooler. I think right there, you.
00:17:24
Speaker 8: Know, think got a small one.
00:17:26
Speaker 1: All right, Karen Murphy, thanks so much for joining us. Kara Murphy's the CIO at Kestra Investment Management. She's based in Austin, Texas, but we got her live here in the Bloomberg Interactive Broker Studio, so we just appreciate that. Thank you very much for joining us.
00:17:37
Speaker 7: Careen, you're listening to the tape cans Are Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
00:17:57
Speaker 1: All right, I'm looking at the work function here. We have the FED obviously next week Wednesday, I think ninety three point six percent percentage likelihood of raising rates.
00:18:07
Speaker 3: What do you do after that?
00:18:08
Speaker 7: Though?
00:18:08
Speaker 1: I mean, I think inflation is whipped here in the US, but nobody asked me my opinion, certainly not at the FED. I wonder how things are going around the world. Anakatrion joins US. She's a chief economist international for Van Longshot Kempen based in Amsterdam. So Anika give us a sense of I think inflation's whipped here in the US, I don't know. Talk to us about Europe. How are things? How's the inflation story playing out there?
00:18:35
Speaker 9: Well, inflation is not whipped yet in Europe, and it's it's typical, you know, situation that Europe is behind the caa versus the US. So we hope that Europe will continue its pass But I guess the main issue is that especially services inflation, especially core inflation, it's remaining stubbornly high. And that's why Leguard, unlike Powell, actually has been very very outspoken. We are not done yet. So we can definitely expect more rate hikes from the ECB.
00:19:06
Speaker 5: And when you look at what's going to happen here in the States, the next FED meeting is a kind of foregone conclusion of another hike. The real question is what's going to happen in the fall. What are you going to be looking at to suss out what the Fed might be doing come September? Are you're going to be looking at J Powell's commentary next week? Other FEDS speak. What's your input there?
00:19:32
Speaker 9: Yeah, Well, the minutes are always fascinating because in the last set of minutes, I think there was a slip of the tongue that we saw using between the language of pause and skip, because initially it was paused, then suddenly the word skip came out, and then oh gosh, no, you know, pause again. So I think the minutes are interesting also looking at what the consensus is, what are the other officials saying? And that was interesting last time because the majority we're talking about two hikes from here, whereas a couple of months ago that absolutely wasn't the case. So that incremental change in language.
00:20:00
Speaker 8: Across the whole board is interesting.
00:20:02
Speaker 9: But by far the most important thing is also in the US, what is going to happen to core inflation? And yes, you know, it looked less bad than expected in the last print, but we're still nowhere near the two percent targeted number, and maybe last point, if I may, the two percent targeted number, I don't think you know you're going to see that coming at this stage, but you could argue is two percent even irrelevant target? Probably too early for that discussion to come up.
00:20:31
Speaker 1: ANAKA, are you concerned that here in the US to FED either has gone or will go too far in push this economy into recession either late this year into next year.
00:20:40
Speaker 3: That maybe could be avoided.
00:20:45
Speaker 9: Yeah, I think I think the biggest concern is the following. Let's let's zoom out again. We've spent almost ten years massively under shooting the inflation target, and now you know, the last period we're massively over and shooting the inflation targets. So if you took a step back and said, well, look to tolerate this overshoot period because you know, apparently at ebbs and flows, fine, and then you know we don't need to be so aggressive on monetary policy. We don't need to keep aggressively hiking. Maybe we can avoid this hard landing. That's what the data was telling us last part, not the leading indicators, but the actual data. And we shouldn't be too worried. However, if also part of the credibility restoration that they're busy with, if they're extremely adamant we said two percent, we have to get to the two percent. If we don't get there, we keep on hiking, then yes, that could be really painful for the economy because the transition mechanism takes time.
00:21:38
Speaker 5: Well, and it takes time, especially in a country like the US where we have so much spending going on, particularly from the government when we look at Bidenomics and the infrastructure Bill. I kept making the joke this weekend because I was on a road trip that I was really seen biden armics in action, because the amount of construction there was in on the highways was absolutely unhinged. So, Anaga, when you think about the spending that's happening from the US government pumping that money into the economy, how does that square with the moves we're seen from the Federal Reserve to try and fight inflation. Can the two come together?
00:22:22
Speaker 9: Well, this is exactly the problem we're dealing with. And I'm sure it wasn't a fun road for having all that infrastructure work being put to play, but that's exactly the problem. So why is it that we believe that inflation is going to be high at structurally for longer. Partly it's because of what you just mentioned. You know, if you add up the Inflation Reduction Act, which ironically is actually resulting in more inflation, if you add up the infrastructure Bill, if you add up potential student forgiveness, et cetera, et cetera. That's more than a trillion dollars. That's just literally being pumped into an economy. We're at the other side of the table. You've got the monetary policy makers saying, gosh, we're trying to squeeze out the oxygen from the market. We want to reduce our balance sheets, we want to increase interest rates. And that's just a juxtaposition. It's very messy. So that's why you know, there's a fair chance inflation lasts for longer, and the two parties on the same table should figure out, you know, which direction are we going to let this thing going?
00:23:16
Speaker 1: Hey, Anika, the China. I'm going to talk a little bit about China the reopening. I think the expectations were quite high what that would mean maybe for the global economy, and we're seeing some weaker than expected data coming out of China. And I think about the exposure obviously in the US big trading partner, but also think about Europe because I think about some of these big European industrial companies and all the big equipment and stuff that they make they sell into China. Talk to us about kind of how you know European manufacturers in European industry are thinking about China and the pace of the reopening there.
00:23:50
Speaker 9: Yeah, and to your point, you know the pace of reopening. We were very excited in the beginning, and that excitement got abated because we see that things are really slowing down. And to what extents will the cent bank they're put more, as said, oxygen into the markets. We don't know, but I think that the company's issue is twofold. So on one fold, it's producing goods that are sold to China and looking at the disposable income and is that demand going to be robust enough to keep up those expoarded sales. But I think the other side is maybe more interesting, which is because of geopolitics, because of rewiring of supply chains, et cetera. Companies also European companies that were relying on part of their manufacturing footprint to be situated in China that have now got to find other locations. That's structurally inflationary in most cases. So you know, your cost of good souls are shooting up, and are you able to pass those you know, higher cost to your customers? Yes or no? You've already passed on quite a bit. Are consumers willing to pay those prices?
00:24:47
Speaker 8: Et cetera?
00:24:48
Speaker 9: That just exacerbates the issue.
00:24:50
Speaker 5: Yeah, and aga final thirty seconds here soft landing, how likely is that in your scenarios?
00:24:56
Speaker 9: It's well, it all depends on I think it's thirty seconds. Most important thing is how stubborn are central banks going to be on this two percent inflation targets? If we're willing to accept inflation being in the three four percent for longer than expected, and they won't be too aggressive the soft land who could very well happen if we stick to it and have to keep pushing policy according to the rule book. It could get more thankful.
00:25:21
Speaker 1: Anaka, thanks so much for joining us. We always appreciate getting your global view, your global perspective. Anika is the chief ec Commerce International for von launchhot Kempen, joining us via zoom from Amsterdam, giving us the global view.
00:25:35
Speaker 7: You're listening to the team. Can's our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
00:25:49
Speaker 1: Let's talk big banks, right, smack in the middle of earning season for the banks, the regional banks, the big money centers, all reporting numbers here. So let's round table this thing like we like to do. Alison Williams, She joins u Via Zoom and Herman Chen. We got them last owed here into our Bloomberg studio here in New York. Herman, let's start with you, because you were the source of all this problem several months ago, you in your regional banks, big super regional bank reported today P and C it stocks up.
00:26:17
Speaker 3: Yeah, what are you see from P and C A bit of a surprise.
00:26:20
Speaker 10: I think it's just PNC is getting caught up with some of the more positive tone from some of the other banks that reported today. But for P and C itself, the earnings missed estaments and the guidance was a bit weak relative to both net interest income and some other areas. So it's a bit of a challenge for regional banks. I think this will be sort of reflective across the group. Where the positive costser continue to rise, banks will continue to offer weaker guidance with respect to net interest income. Lonkre's going to be a bit of a challenge for the regional. It's because they don't have a lot of the areas that are growing, like credit cards, so it's going to be a bit of a slog over the next three quarters.
00:27:04
Speaker 5: Well, it seems like wealth management is the thing that's kind of keeping a lot of these banks from having less than great earnings this season. Allison, to what extent do you think that the wealth management side of these firms is going to be able to keep them from experiencing more of these headwinds from things like deposits and money market funds.
00:27:28
Speaker 11: Certainly for Morgan, Stanley was very strong of clows came in better than expected, their fee base flows better, investment management flows also better, and in fact revenue for them also came in a bit better.
00:27:42
Speaker 8: The net interest income side within.
00:27:45
Speaker 11: Wealth tends to feel a little bit more pressure than some of the core business, and that really is because those customers are a little bit more presensitive, the boundsies are higher, and the cost of deposits tends to rise faster there. But I think what we're seeing across the banks, if anything, is a little bit of a relief rally in the sense that deposit posts are going up. We are seeing that migration but it's not as bad as feared.
00:28:12
Speaker 8: Bag America did.
00:28:15
Speaker 11: Come in about in line, so that was not as positive as what we saw JP Morgan and City, but they did up their guidance for next quarter a little bit, and so I think that's a key positive and is helping the shares a little bit today.
00:28:28
Speaker 1: Hey Hermer, what have you heard so far and what do you expect to hear about? I know that you mentioned and also mentioned the cost of deposits going up, obviously, but how about just the deposits in general at these regional banks are concerned that they would be that they'd be losing deposits.
00:28:44
Speaker 3: What are you hearing so for yees?
00:28:46
Speaker 10: So deposits, actually, the overawhill balances have been pretty stable if you look at the reporting. But what's interesting is the remixing of those deposits, So the non interest sparing accounts, those are continuing to fall, so they're down about six seven percent across the group so far that have reported, and that's just indicative of the repricing pressures as folks that have checking accounts, they're moving their money to CDs and so the banks have to pay up for those. So that's another reason why we're seeing headwinds across the group.
00:29:17
Speaker 5: But it doesn't necessarily feel to consumers like they're getting a lot of bang for their buck when it comes to these deposits. Do you think that we're going to need to see a Bank of America offering better returns for people to keep their money in their bank accounts.
00:29:32
Speaker 10: Well, the banks are not going to give you the money the higher interst right, you have to take your money out of your deposit accounts open up a CD. So it takes a bit of some wherewith off from your consumer to do that. And the banks are just banking on folks just keeping their money and they're checking accounts. So that's that's really the dynamics that's playing out right now.
00:29:52
Speaker 1: Hey, Allison, what are we going to see from a gold and Sacks just tomorrow? What will you be looking for? What do you think the market's looking for?
00:29:59
Speaker 11: So we are going to see some charges at Goldman Sachs that we saw some severance costs at Morgan Stanley today, We're also going to see that at Goldman and we're also going to see the higher impairment. So that's definitely going to lead to some pressure on the reported numbers on a core basis, trading fees are down and despite things coming in a little bit better than expected, and there's you know, talk of constructive view those that revenue is going to be lower for Golden Sacks, they do they are the revenue leader and EM and I and that's a big headwind for the quarter. So for the bank, we're really going to be looking to see how they stacked up competitively on those revenue trends and then costs beyond some of the items I talked about, what is the core trend there?
00:30:46
Speaker 8: Because they really are working to improve their efficiency.
00:30:49
Speaker 1: Hellison, is there am I imagining this or is there any pressure from shareholders or any other external stakeholders on David Solomon right now? Given maybe what happened with the Consumer Bank for example.
00:31:01
Speaker 8: I mean, I think.
00:31:02
Speaker 11: There's a lot of talk and headlines around the Consumer Bank, but keep in mind that was not started under his review, so it was something sort of that he inherited, and it was you know, they took a shot.
00:31:14
Speaker 8: It was something different for Goldman Sachs.
00:31:16
Speaker 11: I would say that investors never really had a lot of faith in that strategy. It's certainly not why people bought the stock. It was more something that they tried out and could help over time.
00:31:29
Speaker 8: They are continuing with the.
00:31:31
Speaker 11: Consumer deposits side of the business, so there is, you know, something there, but certainly the lending strategy is something that they've decided it is just not something they're going to move forward with. They don't really have the competitive advantage there.
00:31:45
Speaker 5: And when it comes to the consumer Hermann, I want to bring you back in here because we talked a lot about the impact of credit tightening on consumers small businesses. So far with the PNC earnings, are we getting any indication as to how tight the credit is getting for those smaller consumers small businesses across the country.
00:32:06
Speaker 10: Yeah. So we're seeing actually consumer growth still fairly strong across the board, and where the demand has has fallen a bit is on the business side of the commercial side, and Allison Spanks have seen some strengthen credit card lending, so that's something that is helping some of the money center banks relative to the regionals, But the tighter underwriting is probably going to happen more on the commercial side of things, which really is a detriment to the regionals because they are more focused on commercial lending.
00:32:39
Speaker 1: Allison, are we seeing any share shifts in you know, the I think about the classic fixed income trading businesses is it. Are we seeing any big shifts there? There's still kind of Goldman, Sachs, Morgans, Stanley, Bank of America that the big players.
00:32:54
Speaker 8: I mean, it still is the big players.
00:32:56
Speaker 11: But what we have seen I mean over the last decade or so is market share games from the largest US competitors.
00:33:04
Speaker 8: In this particular quarter.
00:33:06
Speaker 11: Bank of America is really the standout showing more resilient ten percent growth. However, I would also point out that you know, Morgan Stanley and Globe and Sachs, who stills you well in the commodities business, are up some really against some really tough comparison. Morgan Stanley, you know, coming in even worse than than than had been expected. But if you looked, I think across the different verticals, the big getting bigger, and Bank of America really I think seeing the fruits of some of their investments in terms of the rates trading business and equities trading business.
00:33:41
Speaker 5: Alison really quickly here though, with Bank of America the bond losses hitting one hundred and six billion dollars is that going to weigh on the bank moving forward, heading into the next quarter.
00:33:55
Speaker 11: I think that the bank has sort of give keeps giving a lot more granular information about its on portfolio. Certainly that's just going to take time to manage that over time. And I think that the fact, as we learned with these banks, it's not just about the losses that you carry, but it's sort of about the strength of the deposits and the asset liability management that supports them. And what we are seeing at Bank of America deposits down with the industry, but certainly that broad based strength and especially on the new account side.
00:34:34
Speaker 1: All right, guys, what you just heard is some smart, smart analysis from some of our leading voices at Bloomberg Intelligence covering the banks. Alison Williams, she covers a big global banks, the investment banks. Herman Chan covers the regional banks, which have really come into focus really over the last several months. And we love getting those two smart people together help us kind of walk through what's happening out there with the banking system. So Alon Williams and Herman Chan, thank you so much for joining us here.
00:34:58
Speaker 7: You're listening to the tape cancer O live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
00:35:17
Speaker 1: I love biotech stocks because they are it seems like it's a binary situation. You hit it and a boom, or you don't and then it goes to zero. I mean, I do not have the stomach to trade these things, but a lot of folks do and they do it successfully. But one of the bio tech companies, by a farmer companies, is Recursion Pharmaceuticals.
00:35:37
Speaker 3: And we have the CEO Chris Gibson. He joins us.
00:35:39
Speaker 1: He's a CEO and co founder of Recursion Pharmaceuticals. Hey, Chris, thanks so much for joining us here. First of all, tell us what you guys do. What's your focus ad Recursion?
00:35:50
Speaker 12: Well, thanks, Paul high Madison. Yeah, our focus is to eliminate that bimodal worry that you just talked about, Paul. So we're bringing together the world of automation and computation to try and turn this artisanal, bespoke process of discovering medicines that takes ten to fifteen years and costs billions of dollars for each new approved drug, and turn it into something that looks more like an assembly line, that's much more predictable, that has much lower failure rates. And so we're using the latest in mL and AI that we build here with our team, using a lot of robots to do our experiments and exploring and mapping biology to try and discover new medicines at scale and one day bring down the price as well.
00:36:31
Speaker 5: Okay, so you know what I have to ask you about is the investment from Nvidia. I got a hit it at the top here, fifty million dollar private investment, and I had covered Recursion slightly previously, but I hadn't looked into your company as much, to be honest, until the news of that deal. To what extent do you see that infusion of investment as a game changer for what you're going to be able to do moving forward with Recursion.
00:37:00
Speaker 12: I think what's important for us about the investment and partnership with Nvidia is that we've been working together with them for the past three or four years. We run one of the fastest supercomputers in the world. I think it's number one thirty or something in the fastest computers in the world right now, and it's built on the Nvidia infrastructure. And what this thing, what I think this does is more signals to the rest of the world that in Vidia is excited about the biopharma market and that they see us as as a leader and someone to partner with. And so we're very excited to not only continue discovering new medicines internally here at Recursion, to continue our partnerships with Buyer and Roach Genentech in the fields of fibrosis and neuroscience, but now with Nvidia, to actually start to take some of the neural networks that we're building here at Recursion that we apply to our own data and to actually serve those on their marketplace Bioonemo, where other pharma companies who aren't yet our close partners can actually start to access those neural nets to advance their own research. And so we're very excited about that collaboration broadly.
00:38:00
Speaker 5: I wonder if you think that AI and the mania around AI is enough to help the biopharma industry kind of recover from some of the FED rate hiking impacts and headwinds that have impacted your industry over the past couple of years.
00:38:16
Speaker 12: Well, look, it's always hard in biopharma because our revenues are so deferred, and as Paul mentioned at the beginning, and really in the past, has been pretty bimodal, especially for startups. But I think in this particular case, mL andai is starting to give people an appreciation for how that could change. And you know, three or four years ago, even we in the biopharma industry hadn't fully accepted the potential of mL and ai. But Recursion was founded almost ten years ago specifically to bring these tools to bear. And like many founding stories, this is a company I founded out of graduate school. We were really going against the current in the early days. I would say now in every executive team in biopharma of the largest companies in the boardroom, all of them are thinking about the ways that mL and ai going to change this industry, and they're looking to companies like us who've been doing this for years to give them clues as to which direction things are going. Will it pull us out of the broader macrocycle? I have no idea. I learned a lot from our board chair Martin Chavez, who said not to make predictions about the future of the market, So I won't do that, all right.
00:39:17
Speaker 1: Recursion Pharmaceuticals is a publicly traded company. Our x r X is a very cool ticker symbol. It's got a market cap two point six billion stocks up seventy six percent year to date, in large part on that investment by Nvidia. Anything in Vidia touches seems to turn to gold here. So just to understand your company, Chris, does Recursion develop any drugs treatments on its own or do you license your technology to other biotech companies?
00:39:44
Speaker 12: All of the above, Paul. So, we've got five drugs in clinical trials right now. Three of those are in phase two or phase two to three trials. In fact, we fully enrolled our first phase two trial just a few weeks ago. We focus internally on rare genetic disease and precision oncology, where a company of our size and scale could run five, six, maybe one day ten twenty clinical programs, and then we partner with large companies like Bayer and Roch Genentech to go after huge intractable areas of biology like neuroscience, where you really need the capital, the resources, and the expertise of a large pharma company to go after Alzheimer's parkins at some of these big neurodiseases. And then I think what's exciting people recently about the Nvidia news is there's now this third value driver beyond our own pipeline, beyond our own partnerships to discover medicines. We're now starting to leverage some of the tools we built for mL and AI to look at a different part of the demand curve and start to partner with the rest of the biopharma industry to leverage our tools on some of their own data. And there will be more coming about this in the coming quarters, but certainly that's the plan with our friends at Nvidia.
00:40:52
Speaker 5: Talk to me about something that my mom would want to know that AI could help with when it comes to drug discovery.
00:41:01
Speaker 12: So today scientists are trying to understand this incredibly complex space of biology and chemistry using really, really old tools. And what we're doing at Recursion is the equivalent of building Google Maps, but for biology. So instead of focusing on one disease at a time, we're looking at every gene in the genome and millions of molecules in many different human cell types, using robots and sophisticated computational tools to literally give a map on a web interface for biologists and chemists to use, and it will look very much like Google Maps, but instead of looking at a street in your neighborhood or looking at a street view of a restaurant that you want to go to, this map will give the equivalent of that to biologists and chemists to understand things about biology and chemistry that until now we haven't been able to see, to understand the complexity of all around us. And we think by providing that map, people will be able to blotter better plot the course from disease to healthy, not just for one disease at a time, but for many. And that's what we'll be working on for the last ten years here in Madison.
00:42:05
Speaker 1: All right, Chris, fascinating stuff. And I guess I mean, when you get your undergraduate degree in bioengineering and biomedical engineering from Rice University, and if that's not enough, then you go get a PhD in bioengineering from the University of Utah, you better do something really important. I think that's what these folks are doing here. Chris Gibson, CEO and co founder of Recursion to Pharmaceuticals. The ticker is a great ticker for a drug maker r x RX and doing some interesting work there, really interesting work in the biopharma space. We appreciate getting a few minutes of Chris's time.
00:42:36
Speaker 2: Thanks for listening to the Bloomberg Markets podcasts. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three.
00:42:49
Speaker 1: And I'm fall Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio
