บทถอดความฉบับเต็มของ Progress on Infrastructure Deal, The Rise of Digital Pharmacies

roads and highways. You know, should we have them be paying more that that will hopefully ultimately bring about better design, if you will. When it comes to trucks, well, uh, you know, first of all, let me just I want to step in and supportive state trucks and trains because that's really what keeps our economy moving. We are the most mobile society in the world, and we moved significant amounts of freight and all the kinds of products that we take for granted when we go to a grocery store, when we go to a department store, that sort of thing, and many of those good to move by trucks, many move by trains, and even during the pandemic, these workers were on the front lines again keeping our economy going. But you're right, transportation, I've always said, is about more than concrete asphalt to steal. We have to look at new means of investing in transportation. We have to h frankly, wean ourselves from a dependence on fossil fuels and look at new renewed energy sources. I think um the President has challenged us in that regard, even with his campaign theme of building back better, not just building back, but building back better and shoring up our infrastructure so as to withstand some of the natural disasters that we're facing, especially on the coast. So we've got a lot of work to do. I think we've got some professionals to get that work done. The American people want it done, and it's key to our pursuit of happiness. So I think that there is much about the new that has to be done, but also we have to maintain the system that we have currently. Well, it's interesting that you bring up the coast to and I do wonder about that with climate change. We talk about Florida a lot here on Bloomberg. It's caught the attention of investors. You know, should we continue to build back and shore up if we're not going to really equally do something about climate change, because it's just a case of rebuilding the castle only to see the shoreline take it down again. Yeah. Well, you know, the the President has been very clear about that, and I think he's really hit on three words that I believe will ultimately define uh the effort that he's proposed and the effort that the Congress will actually pass. He's talked about resilience, He's talked about sustainability and equity, and all of those issues go to the transportation system of the future being more resilient where it's showed up, where it's building back, better, being sustainable, meaning a system that can withstand the challenges of freight, with then the challenges of natural disasters, those sorts of things, and then more equitable, ensuring that everyone is included, that no one is left behind. And so I'm excited about what we can anticipate. I think that we've seen the system really um tested in this fourth of July holiday weekend, where we've enjoyed the opportunity as Americans to see America come back, if you will. And and it's sort of get back to a period of normalcy, especially hopefully as we've sort of put COVID in our rear mirror. But again, that has been the number one objective of the President, freeing us from that, and then dealing with our economic pandemic, our economic challenges, uh, and then investing in the future. And I just feel good about where we are. But we've got much more to do as the Congress returns from the holiday and sort of nears the August recess and then frankly the end of the fiscal year, uh, the end of September. So a lot to do, but I think we're on the right track, to be shure. I want to talk about this in the context of China and the context of economic growth here in the United States. Yesterday's Big Take, the Big Story that Bloomberg publishes each day, focused on China overtaking potentially the United States is the world's largest economy by In order for that to happen, a lot has to go right in China, but a lot has to go wrong here in the US. Joe Biden has to be unable to push through proposals for renewing infrastructure and expanding the workforce. That's according to forecast from Bloomberg Economics. You've been in Washington a long time. China in many cases when it comes to infrastructure, is just eating our lunch. How do you get Republicans and Democrats to see eye to eye when it comes to making real progress on infrastructure? M Well, first of all, I think here again we've seen some good signs. I mean clearly, uh, this effort is not only an effort that's being pushed by the President, but you've got a bipartisan group of Senators who have responded quite admirably as well. And then more recently, the House Problem Solvers cause has stepped forward. That's roughly six members of sixty members of Congress, both Republicans and Democrats. So I think that's that's a good son. I can tell you in years past, Uh, those of us who have had the honor of serving as Secretary of Transportation, we've enjoyed significant bipartisan support. I was just with Sam Skinner, a secretary during the Bush administration. Bush one bust I'll say it that way. Uh, and UM gave us a wonderful piece of legislation that was bipartisan. We came in shortly after that, took advantage of that gift. UH during reauthorization, added additional resources. And really it's that piece of legislation that's governed transportation policy for about thirty years. We now have a need to build on that and to go beyond that, and that's why this current opportunity is so critical. I think it's also significant that you mentioned China. I can tell you that President Biden has been clear in all of his interactions with President Sijen Ping. He said, look, we want you to know that we're back. We're going to meet you at the center of the arena of competition. We intend to win. The President has said that, uh, those who see the West declining and the East, uh in the ascendants, we want to tell you that the West is back. And that's what his whole trip to Europe was all about, strengthening our allies, bringing them along as well, and then his

entertainment of the Japanese president earlier in the year. I mean, he's been on the case from day one in promoting not only US interests, but the interests of democracies around the world, and infrastructure is important for those democracies to remain vital because it's about the movement of people and ideas and the strengthening of our relations with others. Uh. And so I think the President is clear about this. I think Vice President Harris is also clear about this. And when it comes to the challenge at hand, I was not closed with this that President Clinton once said, Look, there's nothing so bad about America. It can't be cured by what's good about America. So I'm confident about the future for the country as well. Secretaries later, only about fifty seconds left here. I think it's very clear about what President Biden wants to do and VP Harris wants to do uh, and the administration wants to do. But Democrats and Republicans can kind of forget that. You know, it's not about them competing against one another, but it's about the United States competing against the world and most notably China as it moves ahead in terms of building its infrastructure. Can they be aligned to actually move forward on infrastructure in a in a good and aggressive way. And forgive me, but only got about seconds. No, thanks, Carol, I believe they can. And uh again, I appreciate both you and Tim and setting up this last discussion, this last segment around that question. It's not about us trying to just fight among ourselves, but it's about us coming forward, shoulder to shoulder, pushing ahead so as to ensure that America's best days are ahead. And so I think with the challenge that the presidents went forth, the Congress has to respond, and I believe they will well. So great to get some time with you. I hope we can drawn you in the future to really pick your brain about all of this, especially as it moves forward. Rodney Slader, thank you so much. Partners squire Paton Bogs of course, former Transportation Secretary under President Bill Clinton, joining us on the phone from the nation's capital. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic from Bloomberg Radio. So at least a dozen startups are trying to disrupt the four hundred sixty billion dollar prescription and pharmacy industry. It's a story reported for Bloomberg Business Week, and so let's get to it. Bloomberg Business week nitor Joe Weber. He is on the access line in Brooklyn, along with Bloomberg News reporter Angelica Levito on the phone in Massachusetts. Jill, it's big money, big money. And I have to admit that a lot of these online pharmacies, uh, these names were new to me straight up. To not know that there had been this many entrants into a space that I don't know, it felt like maybe there was an opportunity, But clearly there's a bigger opportunity than than what little me thought. Um So, uh, Angelica, let's bring you in what what has been the strategy here? Because obviously people have been able to get you know, uh, prescriptions mailed to them at their home addresses for for years now. So what's the opportunity for what all these online pharmacies are now seeing. All of these pharmacies are looking at that four hundred and sixty five billion dollars and they see an opportunity that they could take even a percent, a little bit of that piece of the pie, and that could be a lot of money for them. And so we're seeing a lot of companies in this space, at least a dozen, and the names of this story that we focused on our Medley also and Capsule because these are three that we felt we're a good reference intations of um companies that are going after that pharmacy that you think of, maybe a CVS or a waterines, and they want to be the place where you go to fill your prescription. And of course the place where you go is your phone. And so what you do is you order on your phone and they ship it to you or they have someone literally delivered to you like you would get food from uber ease or grubhub or wherever you order your food. But Angelica, this this is also something that neighborhood pharmacies have been offering for years. I mean, you can you can call in my Brooklyn neighborhood of the local CVS, the doctor sends your prescription in and I didn't get it delivered to my apartment. So so what's different about these venture back startups exactly, and that's the issue that they're going to have to try to overcome, is that there are plenty of ways to get a prescription delivered to you, and so some of them are trying to focus on specific drugs. So, for example, Alto and Medley are both really focused on specialty drugs, and these are typically expensive medicines that you take for chronic illnesses, the matrothritis or something that you have to inject or keep refrigerated, so really delicate drugs that require you to spend a lot of time thinking about and maybe with questions. And so therefore you can go on your app and chat with a person in real time, or maybe you need help paying for that drug because it's really expensive, and so the pitch there is that you can talk to someone and they can help you again via the app Angelica. One of the things I love about your story is Amazon, and I think, okay, so what's their role in all of this and maybe disrupting this industry that's been so entrenched in a certain way of doing it. But I also then think, alto Capsule Medley, you better watch out because maybe Amazon just going to gobble you up and it's pursuit to be into healthcare in a big way. What's the role of Amazon and all of this? So Amazon a few years ago, three years ago now, they bought a company called skill Pack that was once one of these what we would call it digital pharmacy startups, and now three years later you're starting to really see them innovate. They've expanded and now they have what they call Amazon's Pharmacy, and the idea is that it should be as easy to get a prescription drug as

it is to buy a pair of stocks or something else on Amazon. And so one of the newest things they've rolled out this year is six dollars for a six dollar six months prescription excuse me of drugs. And it's some generic drugs, which doesn't cover every single prescription under the sun. But this is, of course UM really interesting and it will pressure everyone to think about the cost because what is one of the biggest pain plength for consumers is how much prescription drugs costs, and so that is something that UM A number of the people we spoke to the story say again, you better watch out if you are a startup trying to compete against a company like m is On. So there's so much money slashing around here, and obviously the digital pharmacies are trying to get a cut of it, but like, what are some of the VC money, what who are the players that that are sort of helping fuel fuel this interest. We're seeing a lot of technology investors actually getting interested in this space or even consumer investors. So Larry Chang, he's a managing partner at Politian Capital and they were early investors in Chewy, which of course is the startup that tried to disrupt the pet industry and they were pretty successful in that pursuit. And in talking to Larry, he told me that one of the things that is so fascinating to them and so intriguing about the pharmacy market is just how enormous it is and that it really represents, in his view, the last segment of retail that has not been disrupted by technology in some way. And so that's why you're starting to see a lot of these maybe not to adational health care investors, but technology consumer investors getting really intrigued by this space. What about when it comes to data, because I was intrigued by a part of your story that said that Medley is exploring the sale of anonymous consumer data to drug manufacturers, which would show whether medications are helping patients, how regularly people take them, side effects and insurance related information. Is that something that could kind of be a red flag to consumers their own even though it's anonymized. There is this the type of thing where Okay, we're so used to just being sort of anonymous data packets for other firms. Well, data, of course is a bigger piece of healthcare, and that's really a lot of the opportunity for some of these companies because they feel like they know what's going on. They see if you're actually filling your prescription on time, UM, they know if you're reaching out to them asking for help getting that drug covered, and theoretically if they start asking you how you're feeling, are you experiencing any side effects? They can then bring that to drug manufacturers who are all looking for real world evidence to improve their own strategies. So that is a big opportunity according to Medley and the one and I did ask that question about well, are you worried are you going to ask consumers? And they say that they would ask for consent and it would be anonymized and aggregate data, So it wouldn't be you know, you're getting information on this one patient and exactly how they performed. It would be here all of the patients on this drugs who consented to UM the data collection, and here's how they're doing and what why that matters for you? We do need some innovation with this space, to say the least. Uh. It's great to read about this and hear about some of those companies, as Joel mentioned, I wasn't familiar with them either. Alto Capsule and Medley. Uh. Angelica, thank you. Angelica Levito. She's healthcare reporter at Bloomberg News. Joining us on the phone from Massachusetts. Joe Webber, of course, editor Bloomberg Business Week on the access line in Brooklyn. This is blue Burg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic from Bloomberg Radio. So the Bloomberg Big Take that was among our most right on the Bloomberg. So is this story. It's about one of, if not the most washed firm on Wall Street and what it's head of the company's massive Wall Street operations. Tim has to say about the trading outlook, and we're talking about JP Morgan. Yeah. Hannah Levitt's finance reporter for Bloomberg News, joins us on the phone from New York City. Among her most recent stories, JP Morgan bosses predicted banks long trading slump gone for good. Take us into it, Hannah, Um, give us some context and background here talk about the trading slump that that we've seen lately. Hey, yeah, so thanks for having me on. UM. So, after the financial crisis, the wallet so that the total trading revenue for the industry fell consistently, and the reasons for that were there were a lot of reasons, but there were more stringent rules. There were the rise of electronic trading, low rates, pressure from new entrants, and outright disappearance of some of the products post crisis. So here we had a downward trend for years and then that all stopped in because it was a banner year for these firms and their trading desks. UM. So what the what the leaders that JP Morgan are saying is trading is a growing business. Um. But you know, set aside twenties results because those were one office, as one of them described it to me, in terms of being so high. However, the kind of dip is over. The worst of the worst is over in terms of that dip. So you'll see uh growth in the coming years. Uh. Basically the market structure changes and all that are in place, and now trading will grow with the economy. So A we're supposed to read this and it's one firm, but it's JP Morgan Hannah right exactly. So they pull in um, you know, the of the five biggest UH investment banks, they pulled in the most revenue for trading last year. So it's it's one firm. It's the bigges swe um in this area. And you know, I mean I think that we're especially heading into earnings next week, where the comparisons are projected to be, you know, not great from last year. Right. Jamie Diamond already said, uh, he signaled the potential thirty

declined from a year earlier in trading and executive that Morgan Stanley and City Group also uh, you know, tempered expectations there. So it's it's just an interesting dynamic to remember both next week and in the quarters and years head. So what do those years ahead look like? And what do those quarters ahead looked like? Because I think for a lot of things could be considered an anomaly, right exactly, And and and in the trading desks really carried the team um for these banks, and so it remains to be seen, you know, what what these comparisons look like. We'll see next week for second quarter, and of course in third, fourth quarter and so on we'll see then. But um, to the extent that these firms are projecting economic growth with it's Jamie Diamond wrote in his annual shareholder letter this year that he is expecting a period of growth. Um. The the idea is that trading grows along with the e Commy and I love how you drilled down or JP Morgan did whether it's you know and share with us in our audience on YouTube in on Bloomberg Radio about US specifically equity versus fixed income China in particular. M hmm, yeah, that was definitely interesting. So UM, what I what I reported was that equities are will expand the industry's wallet more than fixed income products. Um. And among the other predictions where the US will be the biggest increase, the trend is also positive in Europe and the wallet from China will also as well. UM. But it's unclear at this point what share if the additional business will go to PEIGN firms, but they will see some at least. What are the risks that the trading does need to be worried about. I mean, I think you can look back at the you know, the kinds of changes that happened over the past ten years, and uh, just think about that and really the impact you know, and there's always the computers are taking over the world and trading desks and all of that. So so there's there are changes that we can't predict now that will likely happen. It will certainly. You know. You also write about persistently low interest rates being a challenge over in the last slump, and I'm wondering about persistently low interest rates moving forward now. Yeah, well, and that's a good question, and that's something that we'll see, uh in the in the coming quarters as well, and you know, to the extent that that changes over the next couple of years. How worried our firms like JP Morgan and some of the other big banks, hannah On Wall Street when it comes to the startups. I mean, they all had to be kind of in awe of the retail investor, the Reddit trader, and whether or not we don't know what kind of legs it ultimately has, but it really does up end some of the way we trade. Yeah. Well, one of the things that I wrote in my story was that, um, these leaders that jing We're saying that companies like Street Morgan with the most scale and the ability to invest um, we'll have an advantage here. However, it's also going back to the Dimondstare holder

letter, and you know, other executives across Wall Street and across UH financial services more broadly have really sounded the alarm bell here on fintech. Is even big tech getting into financial services more at They need to step up competition al right. Like we said, when it comes to JP Morgan, anything they say or two we definitely take note of. And so do Bloomberg terminal readers. And we got earnings, and we got earnings coming up right, and JP Morgan really one of the big ones. Hey, Hannah, thanks so much. Hannah Levit, she's financial porter at Bloomberg News on the phone from New York City Road mac Journal. Yeah, but you let me drive all night, please? I want to drive. Strive question try this is the drive to the globe. Thanks, We'll try us. Dawn on Bloomberg Radio. Just about ten and a half minutes left in today's trading session. We've got stocks hitting an all time high today, tenure yields falling to a more than four month low. So stocks and bonds moving in unison kind of. We did have some volatility in terms of the equity trade. Let's get to it with John train Or, chief investment officer at People's United Advisors. They've got ten billion in assets under management, and John is on the phone in Bridgeport, Connecticut. John, good to have you here. How are you very good? And thanks for having me on on such a such a wonderful day that it's great to see all the green. Well, but it was kind of all over the place a little bit. We've seen some ups and downs here, but definitely different than what we saw yesterday. What is driving the trade fundamentally? In your view right now? The best thing that I'm seeing in the market today is that it's being led by the materials and the industrials that you know, those are the stocks that are the reflation trade stocks. So even though we're seeing bond deals lower, the stocks that we we certainly want to see move higher are moving higher. So the composition of this rally is very good. You know, the absolute number is great, but the composition of today's rally is very encouraging. Okay, So give us the details there, I mean, what specifically is encouraging you about it? Well, what we've seen in the past is that when when the technology stocks do well, sort of the sort of we're going back and forth between the growth trade and the reflation trade, and we definitely want to see the reflation trade when all right, it's oversupplify it. So the fact that we're seeing the reflation stocks trade well, that tells us that the FETE is really hitting the right the right tone. They're they're concerned about inflation, but they're not going to do anything that's going to choke this off. So we're seeing, you know, the market do well, but we're seeing this stocks that really need a strong economy do well, which is very encouraging. Yeah, it's interesting. I was reading a note Peter Book far over at Bleakly Advisory sending a note out earlier, and he said, this is something we've seen, you know, since Alan Greenspan aggressively hyped rates back in ninety four, blew up the finances of Mexico and Orange County. Again, Peter Book were writing this removing policy accommodation at a glacial pace has become institutionalized. He said. Booms and busts of course followed, but aggressiveness in easing and a snail's pace and tightening has become the norm, and this tightening phase will be no different. Do you agree? You know, we do, we do, and and you know we've all seen the op eds and the and the newspapers saying that the FED is on dangerous ground and they're you know, they're going to undo all the great work done by the FED. I really have to give German Powell great credit. Uh. You know, he's he's he has he's unwinding Uh this incredible amount of stimulus in a very very tactical, a very very thoughtful way, and the market is responding well. So I I hats off to the German Powell. Hats off. Hey, John, I'm wondering about the message that you think the bond market is sending. You heard Carol talk about the yield on the tenure treasury hitting the lowest in in four months. Um, what is that telling you about how investors are thinking about growth? You know, it's interesting because it's it's confusing the heck out of my my fixed income team. I mean, if you think on June six, are at the day of the said meeting, the tenure was at a one fifty seven. Today we're at a one thirty one. I mean it really is basically the bond market essentially saying they believe that inflation is transitory. It's almost too good to be true. So we're we're actually a little defensive. We are, we're making sure we stayed defensive on the bond side because it's it's almost a Goldilocks scenario when in the bond market right now, and we think it's probably a little bit over bought. So I mean, this it's a tremendous move, there's been a great rally, but we think it's overdone on the bond market. So when you say you're being defensive in the bond bond trade, what does that look like for you? Well, we're we're keeping we're keeping our duration short. We're probably about eight percent of the duration, meaning we're we're shorter in our maturities on our bottom flight percent duration of the agg Right now, we're going to stay there. We're going to stay there. What's the bond market telling us is are they telling us okay, folks, yep, you're going to get some off the charts earnings numbers this for the second quarter. We know that because a year ago, comparisons were easy and everything was falling apart and stopping. And yet if we start to scrape away things on the other side of this, growth isn't going to be as strong as everybody thought. Exactly what the bondo market is telling is it's almost goldilocks that we're going to get the great earnings, which we do think we're going to get, but we're not going to get, you know, growth so strong that we're going to see rates move up and we're going to choke off this rally. And the bondom market is really telling us that that we that we

have hit it just perfectly, all right, So talk about names that you like because it plays into I think your reflation. Trade among them is something like a Whirlpool. Now, if you take a look at the stocks that we're adding to our portfolios, they have one theme. At what we're looking for are those companies that are going to benefit from from the economic growth. So we're looking at Whirlpool. If you look at a chart on that stock for the last five years, it really hasn't done anything. It's certainly bounced off the loads of last year. But we think Worldpool with what we're seeing in housing, which we think is sustainable. Um this is a company that we want to own because it's just playing on a lot of those those reflation themes that we think are going to roll into next year. All right, what about Microsoft? You know, Microsoft is is our you know, it's the one of the you know, sort of the big five tech stocks. It's the one that that we really think has got the best business model going forward, from whether it's the cloud, you know, whether it's you know, the all the different areas. I know they had a little setback with the Pentagon the other day, but we think Microsoft very very well positioned. You if you own tech, you really want to make sure you own Microsoft. I wanted to ask you specifically about that the Pentagon essentially pulling the Jedi contract yesterday. That happened at about noon and Eastern time. Um, and we still didn't see Microsoft even closed lower. It closed flat yesterday. UM. So it didn't seem to come as a huge surprise to investors. What was your reaction to that is that does that concern you at all? That the cloud just isn't there for the company? Well? You know, I mean, if you if you read the articles, half of the articles are really very very politically oriented, you know, I don't know whether the awarding of that contract to Microsoft had to do with the Trump administration's problems with Amazon and Washington Posts. But they're getting half the contract. Yeah, yeah, I mean, so it's not like they and maybe this is the government hedging its best or as government contractors like to do, it's like playing them against them for the best deal. Yes, I mean, as a taxpayer, I think it's good. And again, this has been so long in the tooth and things app change, and it does make sense for the Pentagon to look at the contract again and say, hold on a second, let's redo this. We think Microsoft has got a great product. But again I think the political the political influence here messed up the process. So I think I think a redo is called for Morgan. You also like what's up with that? You know, we like the banks. We look at the banks almost as call options on the economy, and if the economy is doing well, you're going to see credit losses continue to remain low. You're going to hopefully see loan demand pick up at some point. So we we like JP Morgan. It's well managed. But we like the financials just because we like the economy, even though with rates so low that in terms of the amount of money that they might make on some of the loans, it's not so great. You know, the net interest margin on all the banks is incredibly low. But you know, we're hoping we see rates slowly move up as the economy improves. But you know, again, we think JP Morgan and the bigger banks can really do well there. They've got they've got such versifying revenue streams that we think they can do well. Here, just five seconds. What are you looking for when the big banks report earnings starting next week? You got ten seconds? Ten seconds. We're hoping for. Well, you know, we know, we know credit costs are going to be good. What we're looking for is something that gives us positive news about loan demand. Loan demand is going to be the key. That's what we're looking for. All right, Gonna leave it there. Always cover a lot of ground, John. Thank you, John Train, our executive EP, chief Investment officer at People's United Advisors ten billion in assets under management, on the phone from Bridgeport, Connecticut. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News