July 15, 2025 • 34 mins
Watch Bloomberg Businessweek Daily every day on YouTube: http://bit.ly/3vTiACF.
Nvidia Corp.’s Jensen Huang spent months telling everyone what a grave mistake the US was making restricting shipments of artificial intelligence processors to China — with little sign that his argument was swaying anyone.
Then, very suddenly, that all changed.
Late on Monday, the chipmaker said it received assurances that the US government would allow it to export some chips to the Asian nation. Advanced Micro Devices Inc., Nvidia’s chief rival, quickly followed with a similar announcement. These export license approvals could generate billions of dollars in total revenue for the companies this year — and they mark a dramatic reversal after the Trump administration said the issue wasn’t even up for debate.
Huang has taken almost every opportunity available to him — from the stage of tech events to Washington visits — to argue that a crackdown on China is counterproductive. During his appearances, he navigated a fine line between praising Trump policies aimed at bringing back chip manufacturing to the US and demanding more freedom to do business in China.
Just last week, Huang met with President Donald Trump at the White House.
Today's show features:
- Bloomberg News US Semiconductor & Networking Reporter Ian King on the news that Nvidia and AMD can resume AI chip sales to China
- Jayati Bharadwaj, Director in FX and EM Strategy at TD Securities on the US dollar’s reaction to June inflation data
- David George, Senior Research Analyst at Baird on the initial wave of quarterly bank earnings
- Bloomberg News Health Reporter Madison Muller on her Businessweek feature story on efforts by Hims & Hers Health to cash in on the GLP-1 drug craze
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business
Weekdaily reporting from the magazine that helps global leaders stay
ahead with insight on the people, companies, and trends shaping
today's complex economy. Plus global business finance and tech news
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:32):
Well, we're going to continue with AI because shares of
Nvidia and AMD just surging in video of four percent,
as is AMD actually MD, excuse me, up six point
three percent now, this after the company's plan to resume
sales of some AI chips in China after securing Washington's
assurances that such shipments would get approved. It's a dramatic
(00:53):
reversal from the Trump administration's earlier stance on measures designed
to limit Beijing's AI ambitions in King is Bloomberg News
US Semiconductor and Networking reporter. He joins us from our
Bloomberg newsroom and a bureau in San Francisco Ian. What
is this reversal? The news crossing late last night obviously
good for shareholders who are along these companies. What was
(01:15):
the reversal.
Speaker 3 (01:17):
Yeah, I mean, in a broader sense, the trend for
these companies has been sort of bad to worse, which means,
you know, access to their largest potential market, China has
been becoming tighter and tighter, and it's becoming more difficult
for them to do business. What they were told was,
and this is the US Commerce Department was actually, look
these licenses, these applications that you've put in to for
(01:40):
permission to ship some of these chips to China. Guess what,
We're going to take a positive look at them. So
this was really kind of a pleasant surprise if you're
a shareholder, where the expectation has been that this situation
was going to get worse and worse.
Speaker 4 (01:54):
A pleasant surprise and somewhat of an about face. Right
when it comes to the presidential administs policies here, what
does this about face really signal about the negotiations going
on between China and the US when it comes to SEMIS.
Speaker 3 (02:11):
Yeah, I mean I think you nailed it in terms
of negotiations, because as we've seen from senior administration officials
who've been on our TV and been on other media
sort of talking about this issue today, they've said Oh yeah.
We sort of made this deal a while ago when
we were asking the Chinese to give us access to
rare earth minerals and magnets, and we sort of told
(02:34):
them that this might be a thing. So what we
were kind of learning here is is clearly a quid
pro quo type situation and obviously implies it going forward
if we're going to see more of these trade type
deals and perhaps AI exports to China are on the
table in a way that we thought they perhaps weren't.
Speaker 2 (02:53):
At issue, are these H twenty chips. You mentioned different
officials on our air. One of those officials Treasury Secretaries
Scott Besson. He was on Bloomberg Surveillance a little earlier today.
Here's what he said about those Nvidia H twenty chips.
Speaker 5 (03:07):
The judgment that the Chinese indigenous manufacturers already have an
equivalent chip. So if there's an equivalent chip, then the
Nvidia H twenty could be sold. One thing that we
do not want is.
Speaker 6 (03:23):
A digital Belton road springing up around the world because
other countries or China are substituting for our American chip manufacturers.
Speaker 2 (03:35):
Those Treasury Secretary Scott Besson on Bloomberg surveillance earlier, I'll
repeat a little bit of what he said. He does
not want a digital Belton roads springing up around the world. That,
of course referring to what China has been able to
do physically around the world when it comes to trade,
when it comes to ports, when it comes to building
roads throughout the entire world, or almost the entire world,
(03:55):
much of the developing world, i should say, and exerting
its own influence on country around the world that way,
is there already a digital Belton road initiative that China
has been exerting on the rest of the world.
Speaker 3 (04:06):
In in this particular area in AI.
Speaker 1 (04:11):
Not yet.
Speaker 3 (04:13):
But what Jensen Wang, the CEO of Nvidia, has argued,
and some of his peers have argued, is like, look,
if you don't let the US technology become the absolute center,
the base layer of this giant AI built out around
the world, somebody else will. Who will let somebody be
most likely China. Right now, they're not as good as
(04:34):
we are right now, they're way behind us. But guess
what if you give them the chance, they'll catch us up.
That's been the kind of Hey, you need to let
us be out there and propagate ORAI kind of argument
that they've made. And this is clearly something that we've
seen administration officials kind of parrot or adopt, if you like,
in terms of their explanation of why they're going to
(04:56):
let in video and AMD sort of play in to
a greater extent than we thought they would.
Speaker 4 (05:03):
I'm wondering how this development, well, I guess what it
means for US tech and AI companies now versus companies
I'm thinking deep seek in China that are also trying
to kind of get ahead in AI arms rates. Does
this level the playing field?
Speaker 3 (05:22):
No, it doesn't. I mean, you know, there's still a
very distorted, if you like situation. US companies are not
going to be allowed to sort of absolute free access.
You know that the US administration officials were very clear
to point out that, hey, we're only letting them have
(05:42):
these access to these older chips, right that nothing new,
nothing state of the art, is going to be allowed there.
So those Chinese companies that are actually developing, they will
have access to some perhaps US technology, but nothing state
of the art. So they've kind of got to make
their own ways still, and that's a lay a hard road.
Speaker 2 (06:01):
How are they doing in that.
Speaker 3 (06:03):
It depends who you speak to. Those that want to
argue for more freedom, that want to argue that the
US is at risk are saying, the Chinese are finding
a way, while Weet's doing really well, Deep Seek is
doing really well, and they're making doing men with very little.
So guess what if they over time, they're going to
get better. Others are saying, now now they're way behind
(06:24):
us here, this is our chance to really hold them back,
and the US is forging ahead. So you know, the
argument tends to shift according to who's making it and
what the motivations are. What the reality is will be
determined by the market and the use of these systems worldwide.
Speaker 1 (06:40):
I e.
Speaker 2 (06:40):
In just ten seconds on sort of the next question
when it comes to what in NVIDIA and AMD and
the like cannot still export.
Speaker 7 (06:49):
What is it?
Speaker 1 (06:50):
Yeah?
Speaker 3 (06:50):
I mean the next question is how many of these
licenses are they going to get and what does that
mean materially for them, And the answer is, we don't
really know yet how quickly these licenses will come, how
quickly they'll be able to ship on, how much demand
they'll be, whether it'll restore the lost revenue that they've
already had to point to.
Speaker 2 (07:07):
Well, they're certainly demand for shares of these companies today
in video up four percent, AMD up six point four percent.
Ian King, Bloomberg News US Semiconductor and Networking reporter always
love it when you join us on Bloomberg Business Week Daily.
Speaker 1 (07:21):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eastering. Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (07:35):
So that's a look at three of the big banks
which we're interested in not just for their results, but
also for their macro commentary. J At Bardoise is also
watching this commentary closely. She's director in FX and EM
strategy at TD Security. She joins us here in the
Bloomberg Business Week Studio. I want to shift gears a
little bit in talk capital flows, because that's certainly under
(07:55):
your purview in this new Terra regime. We've got a
great story on the Bloomberg about the maker of Carrie
gold Butter, a favorite of pretty much everybody, has slowed
its US investment as it waits for more clarity on
President Trump's trade settlement with the EU. Just about an
hour ago, we heard from Embraer's CEO. He said he
may revisit its business plan due to US tariffs. It's
(08:15):
an evolving situation, certainly, but how do you see tariffs
changing the flow of capital big picture?
Speaker 8 (08:20):
I think the biggest thing is that they have injected
a lot of uncertainty to markets, and I think last
week was that wake up call because markets had become
a little too sanguine on Tara frisks and we came
back with multiple letters and that uncertainty crept backup, and
that's why the dollar is getting the bounce that we're seeing.
You're also seeing the change in capital allocation, which you
rightly mentioned. The biggest mover, and the first mover actually
(08:43):
has been Europe because they have been very quick to
repatriate and they've been very quick to bring money back
home into local equities, which is actually what's boosting the currency.
At this point, I.
Speaker 2 (08:52):
Want to jump in because as I was asking you
that question, we got a red headline cross in the
Bloomberg terminal. The President says that Indonesia will buy fifty
Boeing jets in a trade deal. How do you look
at a US manufacturer, a massive US manufacturer as a
bargaining chip when it comes to these negotiations.
Speaker 8 (09:11):
The thing is we've seen with Trump is that we've
seen a lot of frameworks or skeletons of a trade deal.
But right now, you know, we're still figuring out a
lot of the specifics. Even with the UK, we don't
know who the specifics are. That's why markets are in
a very uncertain mode. That's why you've not seen markets
rally on all of these trade deals the way you
would expect otherwise. There's still a lot of uncertainty, especially
(09:31):
to the degree that tariffs are being used as leverage
to extract a lot of concessions from the rest of
the world. The one interesting headline which came out a
few days ago is that the European UNIS is now
talking to its other non US trading partners to come
up with a joint trading alliance and take a stronger
stance to the US. I think those are also the
things which are interesting because while the US is a
(09:52):
very strong dominant power in the geopolitical space, it is
actually forcing the rest of the countries to step up
and you know, do a lot more physical spending and
also a lot more trade amongst themselves.
Speaker 4 (10:02):
Let's zoom out and talk about how all of that
impacts the direction of the dollar. We've seen a lot
of weakness this year when it comes to the dollar.
What do you see the catalysts next, at least for
the direction of dollar strength.
Speaker 8 (10:17):
Right now, I would say that in the very short term,
I think there is going to be a tug of
war between just short term technicals which tell you that
the dollar is very cheap from any historical standpoint, which
is why you will see sometimes when the dollar is
trying to bounce back higher. But structurally, I think this
is as convincing a time to sell the dollar for
more structural reasons than you would have received. For the
(10:39):
longest time, everyone would tell you that the dollar is overvalued,
but you could never come up with good enough reasons
or catalysts for that dollar weakness to sustain. After a
very long time, I can now come up with a
lot of reasons for why the dollar weakness will sustain
uni directionally in the remainder of the year. The capital allocation,
that's definitely one which we've seen in Europe. It remains
(10:59):
to be seen if other countries follow But another very
interesting bit is that the global investors of the world
have been overweight US equities, but they were actually doing
that unhedged. They were not hedging their currency risk at
all because currents the dollar would rally and give their
portfolio a boost. But that's changing, and that's why the
dollar is structurally seeing that pressure downwards.
Speaker 4 (11:19):
What about the FED here, If we only get one
cut this year, does that change the calculus of just
how much we see the dollar weekend for the rest
of the year.
Speaker 8 (11:30):
Not a whole lot, because actually what's interesting is that
the correlation between US traits and the dollar is actually
been broken. The correlation between the US toll and a
lot of factors are broken. You would see yields have
backed up, commodity prices have backed up, equities have backed up,
but the dollar is the only acid class unit directionally
heading lower. So that correlation, which you rightly pointed out,
(11:51):
would have been very strong at one point, it does
not matter anymore because the structural factors are at players
proving to be stronger a lot more than this correlation
to rates.
Speaker 1 (12:01):
JAZ.
Speaker 2 (12:02):
What happens to the value of the dollar if fetcher
power is somehow ousted.
Speaker 8 (12:07):
It is definitely a question We've been discussing a lot,
you know, and it's definitely topical with all the headlines. Uh,
you know, there are a lot of questions around the
legality of all of this, but it definitely is. The
more conversation you're having about this, the more I think.
Speaker 2 (12:22):
It's edging dollars market from the President.
Speaker 8 (12:25):
Yes, I think it's will definitely be injecting a lot
of risk prema into markets, and I think even Bessent
and Trump are careful about that. That's why I've never
there asked, but you know, straight up, are you going
to fire power? Till date, they have said no because
they know that the minute that answer shifts to yes,
markets will you know price in You know, treasury is
going to sell off and the dollar is also going
(12:46):
to massively sell off.
Speaker 2 (12:47):
So is the dollar a bigger guardrail or is our
treasury is a bigger guardrail?
Speaker 8 (12:52):
Treasuries are a bigger guard trail because still the date,
we've not seen any active signs of investors selling treasury.
So that's that has still been intact with treasuries being
the global safe fevan of the world. The dollar correlation
is already. You know it's scraping away already. So I
think Treasury is still the more intact one, which I
think you need to preserve it. And I think that's
(13:12):
why Bessent and Trump have been very guarded in their
comments about public.
Speaker 1 (13:16):
JT.
Speaker 2 (13:17):
Bardoise always good to see you. Thanks for joining us
on Bloomberg BusinessWeek Daily, Director in Fax and em Strategy
over at TD Securities.
Speaker 1 (13:26):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay and
Android Auto with 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.
Speaker 6 (13:44):
Well.
Speaker 2 (13:45):
He wanted to become an investment banker, but after arriving
at the University of Pennsylvania's Wardens School in two thousand
and seven, he realized he was lousy at accounting and
detested Excel, so we settled on startups. He eventually found
himself in the directing consumer healthcare business. We're talking about
Andrew Doodom, CEO of the telehealth company Hymns and Hers,
which for more than a year has been selling GLP
(14:07):
ones America's most coveted weight loss drugs. I'm reading from
a story in the forthcoming issue a Bloomberg BusinessWeek magazine.
It's the August issue, but you can read the story
now on Bloomberg dot com and on the Bloomberg terminal.
Madison Mueller and Devin Leonard wrote the story. We've got
Madison Mueller with us right now. She's a Bloomberg News
health reporter and she joins us here in the Bloomberg
(14:29):
Interactive Brokers studio. I think a lot of people are familiar. Well,
I would say there are two different types of people
who are familiar with maybe three with Hymns and hers.
There's the investing audience who followed the ups and downs
the roller coaster of this stock. They are the folks
who are customers perhaps of the company. And then maybe
(14:50):
there are the folks who are looking at the GLP
ones and looking for alternative ways to find this medicine.
How did he get on your radar?
Speaker 1 (15:01):
Yeah?
Speaker 9 (15:01):
So, I mean Hymns. We've known about the company for
a while because of their splash, very splashy advertisements, which
I feel like a lot of people have seen.
Speaker 2 (15:10):
I mean so it's not just us in the subways,
not just.
Speaker 9 (15:13):
New Yorker's in the subway. I mean, sure, I talk
about weight loss drugs a lot, so I do think
I get targeted ads. But like most people I talk
to have seen a Hymns and Hers ad on Instagram
or on Hulu. They advertise a lot, so people are
familiar with the brand. They had this huge Super Bowl
ad back in February about their weight loss drugs, and
so it's been on people's radars. But I would say
(15:35):
that the last year, after Hymns launched a compounded or
copycat GLP one drug for a fraction of the price
of what you know, the company's Nova Noordo skin Elai
Lily sell their drugs for it really put them on
the map. I mean, their stock rose a ton in
that time. They've experienced enormous growth. They're now worth eleven
(15:58):
billion dollars as of the last time I checked, and
that is like, really what got people talking about them
the last year. They are sort of unafraid to be
really loud and vocal in their marketing, sort of push
the boundaries a little bit. They want people to be
talking about their advertisements, be talking about what the company's doing.
(16:18):
So that's sort of like catapulted them, i think into
the conversation and obviously got them on my radar when
they started offering these GLP wan drugs.
Speaker 4 (16:26):
How did they actually manage to offer drugs in such
a competitive landscape? Would you say now that they're a
direct competitor to these giant pharmaceutical companies that are also
in on the GLP one space.
Speaker 9 (16:44):
Yeah, no, that's a really good question because these telehealth companies,
you know, we did see pharmaceutical giants like Eli, Lilly
and Nova Noordisk start to see some of these telehealth
companies like him as competitor, competitors because they were offering
their drugs at a lower price point when Lily and
Novo were struggling with shortages and patients couldn't get the
(17:04):
company's branded drugs. And then we saw these telehealth companies
crop up offering copycat versions that were allowed during the
shortages and really like start to steal market share from them.
And then we saw Novo and Lily, you know, a
few months ago, start partnering with these companies and actually
utilizing the platforms and the customer bases that they've built
(17:24):
to get their drugs out there to more patients.
Speaker 2 (17:27):
Wait a partnership, but then at least the Novo Nordist
partnership with Hymns, that kind of exploded.
Speaker 9 (17:32):
Yeah, that's been There has been so many twists and
turns and ups and downs with this saga over the
last few months. I mean, it was a surprise, I
think to a lot of people that Novo Nordisk, huge
pharmaceutical company would choose to partner with a telehealth company
that was selling essentially copycat or knockoff versions of their
brand name drugs for a fraction of the price alongside
(17:53):
the real ones. And so it was sort of a
surprise back then. But you know, the Hymn CEO was
saying that the two companies were really culturally aligned and promising,
you know, that he saw a future for them even
beyond weight loss. And then, you know, less than two
months after this partnership was announced, we saw Nova Noordisk
terminate the deal sort of accuse Hymns of some sketchy behavior.
(18:18):
And since then there's just been this public back and
forth between the two companies sort of playing out on
social media and playing out in you know, the media,
giving interviews to different outlets and sort of like going
back and forth accusing each other of different things. So
it's it's like a really unique situation where we have
these two companies duking it out like in a very
public way.
Speaker 4 (18:40):
You reported on this for months, said that you've been
working on the story for a long time and spent
quite a bit of time with Andrew Didom, the founder
of Hymns. I'm wondering if you could talk a little
bit just about kind of his his style as a leader,
as a founder, his background, and how that's helping him
(19:02):
to become like a legit competitor in this very high
stakes weight loss drug race.
Speaker 9 (19:08):
Yeah, I mean, so hims even though it's been around
for a few years. I mean the company started in
twenty seventeen, went public in twenty twenty one. And Andrew's
very young, he's been he hasn't really stepped away from
this like founder CEO role. He's still you know, very
involved in sort of the day to day. He's the
(19:28):
one that's coming up with new ideas for the company
to pursue, bringing him up in you know, board meetings things,
and like he is he is the one driving the
company and sometimes you know, we see CEOs like step
back a little bit at this point, but he has
three kids, you know, three little kids. He's still very,
very involved. His vision is sort of where the company goes.
(19:50):
And he has this interesting background as well, going to
Wharton where it was sort of like a breeding ground
for a lot of direct to consumer companies, and.
Speaker 2 (19:59):
He wasn't like World Parker.
Speaker 9 (20:01):
Yes, Razors. I think like there's a few examples that
we name in the story, and I don't think Andrew
was at school with them, but there we sort of
see this type of company emerging from Wharton, which is interesting.
And Andrew was involved in a lot of different startups.
He was at a startup incubator before you know going
(20:22):
into HIMS full time, so he has experience with launching companies,
sort of knows what it takes to do that.
Speaker 2 (20:28):
You know, you've been in the weight loss of beat
for what two years now, it's like what you live
and breathe essentially when it comes to your reporting, and
I think it's fair to say, based on what you've
told us, this is more than a fad, it's more
than just a trend, but it also is a huge
(20:51):
money making opportunity for a lot of different companies. Yeah,
that said, this stuff changes very quickly. A company like
Hims and Hers is you detail in the piece pivoted
over its history, what does it do now that is
sort of on the outs with Novo. There isn't the
shortage anymore, so they're not really allowed to compound anymore.
Speaker 9 (21:09):
Right, Well, so that's that's actually what they're betting on,
is that they will be able to keep compounding even
though the shortage is open. So there is this, I mean,
we'll call it a loophole. There's some argument over whether
or not it's actually a loophole in the you know,
the legend FDA legislation that says that these compounding pharmacies
can continue to tailor make or personalize, customize these drugs
(21:33):
for patients who can't take the you know, versions that
are commercially available from pharmaceutical companies. So essentially what HYMNS
is doing is they're tweaking the dosages, the strengths of
the drugs and giving patients lower dose version or tie trading,
you know, stepping up the amount of drug that they're
giving patients more slowly sort of to mitigate the side
(21:57):
effects that are quite common with these drugs, like nauseaving,
and so they're saying that, you know, these patients are
not available, you know, they're not able to take the
commercially available drugs because they have these side effects, and
so they need these personalized versions and by doing that,
they're technically allowed to continue compounding. But the FDA hasn't
(22:17):
really stepped in and ruled or said much about this yet.
So and we have a new FDA you know, commissioner now,
so we're kind of waiting to see what happens.
Speaker 2 (22:26):
Can you talk a little bit about how he's ingratiated
himself in the company with the Trump administration and with
RFK specifically.
Speaker 9 (22:33):
Yeah, So, Hymn's donated a million dollars to Trump's inauguration
fund back in January and since then has been making
you know, sort of broad appeals to the Trump administration,
to RFK, to Marty Mackeriy, who's the new FDA commissioner.
You know, their Super Bowl ad was very much in
line with some of the chief complaints that the MAHA
(22:53):
movement has about the healthcare system being broken in pharmaceutical
companies incentives, and they really tried to align themselves in
some ways with with RFK and with Maha, but there's
a fundamental difference in that Maha really believes that you know,
food and diet and exercise are sort of the ways
(23:14):
the you know, prime should be the primary thing in
the healthcare system that people are you know promoting over
pharmaceutical interventions drugs, and you know, that's what him does,
is they sell drugs. So at the end of the day,
there's a little bit of a disconnect.
Speaker 4 (23:28):
I think I don't want to spoil the whole story
because I definitely want our listeners to go pick up
a copy of Bloomberg Business Week magazine and read your article,
But you do start with this anecdote of the CEO
creating this donut, this very extravagant donut shop, And I
just have to ask, is this like a like a
(23:48):
dentist opening up a candy store, Like why does he
have this donut shop? Or is he just an entrepreneur.
Speaker 9 (23:56):
I mean, he's just an entrepreneur. And this is like
him and his wife wanted to create a space where
their family and friends could come, you know, in their community.
It's like pretty close to where they live, and it's
sort of a tribute to Andrew's grandparents as well, who
were local. You know, his grandfather was a local business
owner in San Francisco as well, and so this was
(24:17):
like sort of a passion project for them.
Speaker 1 (24:20):
But it is.
Speaker 9 (24:22):
I mean, if anyone's in San Francisco, they do have
good donuts. They have very decadent donuts, so it's worth
checking out.
Speaker 4 (24:28):
You eat your donut and then you take your.
Speaker 9 (24:31):
Exactly, that's America, Honestly.
Speaker 2 (24:35):
Elon Musk has posted about this. Really Yeah, he's posted
about like eating donuts and GLP one, So you're not
far off, Emily, Okay, people do it.
Speaker 4 (24:43):
Well, maybe I'm like just like Elon Musk.
Speaker 2 (24:46):
Check out this story. Check out this story on the
Bloomberg terminal and at Bloomberg dot com. It's also in
the upcoming new issue of Bloomberg BusinessWeek magazine. It's the
August issue. Be sure to pick up a copy of
that one when you see it at the news stands.
Speaker 1 (25:01):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five Easter and
listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (25:16):
Macle how about you let me drive?
Speaker 3 (25:19):
Oh no, no, no no, this is not a twenty alright,
please do travels.
Speaker 1 (25:26):
Wait, I want to drive. A good question God, this
is the drive to the clothes punks. The music, Well
run it on Bloomberg Radio. Well, TikTok, everybody.
Speaker 2 (25:43):
Ten minutes to go to the close of equity market
trading today, taking a look at how things are. Just
got an update from Charlie pellet Worth repeating the S
and P five hundred right now, down about two tenths
of one percent. The NASDAK is hired by four tenths
of one percent, the downdown eight tenths of one percent.
I want to bring Indavid George, senior research analyst at
a BIR. David joins us from Franklin, Tennessee. David, good
(26:05):
to have you on with us. How are you great?
Speaker 7 (26:08):
How are you good? Afternoon?
Speaker 2 (26:09):
Good afternoon. Let's talk a big picture here. We heard
from the banks three of the banks today. We'll hear
from three more tomorrow. We're sort of at the beginning
of earning season. I think a lot of investors were
expecting the last quarter to be pretty bumpy when it
came to the outlook for tariffs, we didn't necessarily see
that start to seep in to what extent right now?
(26:29):
Do you think the market is pricing in tariff risk?
Speaker 7 (26:32):
You know, that's a great question. I think relatively low.
I think that there's a lot of complacency. And this
is more of a market comment from my perspective rather
than the banks, But I think there's a lot of
complacency around tariffs that the ultimate rates that are being
discussed in some of these letters that have gone out
over the last few days are going to be something
(26:54):
on the order kind of in aggregate to them around
the fifteen percent area. So we'll see, use the president's term,
we'll see what happens. But as it relates to bank earnings,
it's not something that we've really seen have much of
an impact. I think in the last couple of months,
we've seen a pickup in loan demand, and I think
part of that stems from anticipatory buying of inventory, so
(27:19):
that has resulted in line of credit utilization picking up
to some degree. So there's been some impact there, but
we certainly haven't seen any of the negatives as it
relates to potential impact on corporate profit margins and so forth,
and that's something that will take if it is indeed
an issue, something that will take some time to occur.
Speaker 4 (27:40):
Have we seen any positives? And what I mean by
that is sometimes you know, when bank earnings roll around,
you often hear people say that volatility is actually market
volatility is actually good for banks. The traders, you know,
pull in more revenue because they're just simply trading more.
Did we see that in this current quarter that all
(28:02):
of the market volatility that had to do with tariffs,
did it help banks at all?
Speaker 7 (28:09):
Yeah, at the beginning of the quarter it did emily.
The volatility and currencies, commodities, and markets broadly throughout the
month of April in the beginning of May helped derivatives
trading equity trading during the beginning of the quarter, and
then as volatility calmed down, we kind of saw the
baton being handed off from vall related activity to capital
(28:35):
raising activity M and A. So we saw a number
of IPOs and secondary offerings throughout the tail end of
the quarter, as well as a pickup an m and A,
and the momentum of late seems to be more on
that end rather than volatility related activity.
Speaker 2 (28:52):
I do want to make a note that the President
is right now making comments at the Pennsylvania Energy and
Innovation Summit in at Pittsburgh. He made some comments about
the investments from tech companies he is. You can check
out live go. He's attending the Pennsylvania Energy and Innovation
event and you can watch and see his comments on
live go.
Speaker 4 (29:13):
David, I want to ask you specifically about earnings here
from JP Morgan, because you downgraded JPM to an underperform
You said the risk award is getting unattractive. Talk a
little bit more about that stock rating, that stock call
that you made.
Speaker 7 (29:30):
Yeah, the stock call really is just a call on
the stock itself. You know, many times the fundamentals of
a company and the stock aren't necessarily one and the same,
and I think that that's true in this case. We
have the utmost respect for JP Morgan. It's probably the
best company that I cover fundamentally. I just believe that
(29:52):
we believe that the market has priced it that way.
JP Morgan trades it over fifteen times earnings. It trades
it close to three times tangible book. If you were
to look on your Bloomberg terminal and run a historical
evaluation analysis on JP Morgan, it would suggest that it's
never been more expensive, and the market is pricing in
We think a permanent, a permanent improvement and profitability relative
(30:20):
to the rest of the industry, and banking to us
is a commodity and as great as JP Morgan is.
Word of the view that the excess returns that they've
been able to generate are going to be a little
bit more normal going forward, and we simply think that
the upside is fairly limited. So we're paid to have
an opinion, and we think that investors should sell the stock.
Speaker 2 (30:39):
Okay, well, let's talk a little bit about tomorrow and
Bank of America. You upgraded Bank of America in April.
What should investors be on the lookout for now? And
why are you bullish on the company?
Speaker 7 (30:51):
Yeah, so we actually downgraded BAA to neutral the same
day we cut JP Morgan to a sell. But that
stock was up over thirty percent just that couple month
period of time. I think BAA squarter tomorrow is going
to be relatively good. I think expectations around that stock
are not nearly as high as perhaps Wells Fargo today
(31:11):
as well as JP Morgan so BAA should should should
benefit from all of the things that we've talked about
as it relates to volatiley related activity in the capital markets.
And then obviously Merrill Lynch benefits from asset prices being elevated.
So we think Meryll's going to have a pretty good quarter.
And the bank is performing well at the same time,
(31:33):
and the stock has lagged peers, So we expectations are
low and we feel we feel okay about BFA going
into tomorrow. I think that the numbers are going to
be are going to be good.
Speaker 2 (31:43):
We have an interview with Brian moynihan tomorrow afternoon in
the two o'clock hours, so I encourage everybody to check
that out. David Weston, we'll be doing that interview with
Bank of America's Brian moyn Ahand. Okay, so you talked
about JP Morgan, you talked a little bit about Bank
of America. If you think about the broader group of
banks in the bro the banks as a broader group,
are you thinking that they're I don't know that this
(32:07):
you what do you think about in the context of
this raid environment, because nobody can really make sense of
the rate environment right now you hear one thing from
the White House, you hear a completely different thing from
the Federal Reserve.
Speaker 7 (32:17):
What's your view, Yeah, I think the answer is somewhere
in the middle. Like most things in life, I think
it's reasonable to expect that the tariff impact is likely
to be I'm reluctant to use a word transitory, but
is likely to not have a longer term impact on
(32:37):
inflation expectations. So I think it's reasonable to expect it,
and the curve is pricing this in even after today,
around fifty to seventy five basis points of cuts by
the end of calendar twenty twenty five. If the long
end stays where it is, which we think it's going
to be in that four twenty five to four to
fifty range for the foreseeable future, that's actually a pretty
(32:59):
good environment for banks. If you go back the last
three or four years, we've had a very flat, if
not inverted, you'll curve for some time, and that has
had a negative impact on the profitability of banks, particularly
the regional banks. So to the extent we can get
a sustained positive shaped curve, we think that's going to
actually have pretty positive implications for most banks going forward.
Speaker 2 (33:23):
David, thanks so much for chatting with us this afternoon,
talking all things and banks. We got to get you
back on soon. David George's senior research channelist over at Baird.
Speaker 1 (33:32):
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(33:53):
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(00:23):
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Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:32):
Well, we're going to continue with AI because shares of
Nvidia and AMD just surging in video of four percent,
as is AMD actually MD, excuse me, up six point
three percent now, this after the company's plan to resume
sales of some AI chips in China after securing Washington's
assurances that such shipments would get approved. It's a dramatic
(00:53):
reversal from the Trump administration's earlier stance on measures designed
to limit Beijing's AI ambitions in King is Bloomberg News
US Semiconductor and Networking reporter. He joins us from our
Bloomberg newsroom and a bureau in San Francisco Ian. What
is this reversal? The news crossing late last night obviously
good for shareholders who are along these companies. What was
(01:15):
the reversal.
Speaker 3 (01:17):
Yeah, I mean, in a broader sense, the trend for
these companies has been sort of bad to worse, which means,
you know, access to their largest potential market, China has
been becoming tighter and tighter, and it's becoming more difficult
for them to do business. What they were told was,
and this is the US Commerce Department was actually, look
these licenses, these applications that you've put in to for
(01:40):
permission to ship some of these chips to China. Guess what,
We're going to take a positive look at them. So
this was really kind of a pleasant surprise if you're
a shareholder, where the expectation has been that this situation
was going to get worse and worse.
Speaker 4 (01:54):
A pleasant surprise and somewhat of an about face. Right
when it comes to the presidential administs policies here, what
does this about face really signal about the negotiations going
on between China and the US when it comes to SEMIS.
Speaker 3 (02:11):
Yeah, I mean I think you nailed it in terms
of negotiations, because as we've seen from senior administration officials
who've been on our TV and been on other media
sort of talking about this issue today, they've said Oh yeah.
We sort of made this deal a while ago when
we were asking the Chinese to give us access to
rare earth minerals and magnets, and we sort of told
(02:34):
them that this might be a thing. So what we
were kind of learning here is is clearly a quid
pro quo type situation and obviously implies it going forward
if we're going to see more of these trade type
deals and perhaps AI exports to China are on the
table in a way that we thought they perhaps weren't.
Speaker 2 (02:53):
At issue, are these H twenty chips. You mentioned different
officials on our air. One of those officials Treasury Secretaries
Scott Besson. He was on Bloomberg Surveillance a little earlier today.
Here's what he said about those Nvidia H twenty chips.
Speaker 5 (03:07):
The judgment that the Chinese indigenous manufacturers already have an
equivalent chip. So if there's an equivalent chip, then the
Nvidia H twenty could be sold. One thing that we
do not want is.
Speaker 6 (03:23):
A digital Belton road springing up around the world because
other countries or China are substituting for our American chip manufacturers.
Speaker 2 (03:35):
Those Treasury Secretary Scott Besson on Bloomberg surveillance earlier, I'll
repeat a little bit of what he said. He does
not want a digital Belton roads springing up around the world. That,
of course referring to what China has been able to
do physically around the world when it comes to trade,
when it comes to ports, when it comes to building
roads throughout the entire world, or almost the entire world,
(03:55):
much of the developing world, i should say, and exerting
its own influence on country around the world that way,
is there already a digital Belton road initiative that China
has been exerting on the rest of the world.
Speaker 3 (04:06):
In in this particular area in AI.
Speaker 1 (04:11):
Not yet.
Speaker 3 (04:13):
But what Jensen Wang, the CEO of Nvidia, has argued,
and some of his peers have argued, is like, look,
if you don't let the US technology become the absolute center,
the base layer of this giant AI built out around
the world, somebody else will. Who will let somebody be
most likely China. Right now, they're not as good as
(04:34):
we are right now, they're way behind us. But guess
what if you give them the chance, they'll catch us up.
That's been the kind of Hey, you need to let
us be out there and propagate ORAI kind of argument
that they've made. And this is clearly something that we've
seen administration officials kind of parrot or adopt, if you like,
in terms of their explanation of why they're going to
(04:56):
let in video and AMD sort of play in to
a greater extent than we thought they would.
Speaker 4 (05:03):
I'm wondering how this development, well, I guess what it
means for US tech and AI companies now versus companies
I'm thinking deep seek in China that are also trying
to kind of get ahead in AI arms rates. Does
this level the playing field?
Speaker 3 (05:22):
No, it doesn't. I mean, you know, there's still a
very distorted, if you like situation. US companies are not
going to be allowed to sort of absolute free access.
You know that the US administration officials were very clear
to point out that, hey, we're only letting them have
(05:42):
these access to these older chips, right that nothing new,
nothing state of the art, is going to be allowed there.
So those Chinese companies that are actually developing, they will
have access to some perhaps US technology, but nothing state
of the art. So they've kind of got to make
their own ways still, and that's a lay a hard road.
Speaker 2 (06:01):
How are they doing in that.
Speaker 3 (06:03):
It depends who you speak to. Those that want to
argue for more freedom, that want to argue that the
US is at risk are saying, the Chinese are finding
a way, while Weet's doing really well, Deep Seek is
doing really well, and they're making doing men with very little.
So guess what if they over time, they're going to
get better. Others are saying, now now they're way behind
(06:24):
us here, this is our chance to really hold them back,
and the US is forging ahead. So you know, the
argument tends to shift according to who's making it and
what the motivations are. What the reality is will be
determined by the market and the use of these systems worldwide.
Speaker 1 (06:40):
I e.
Speaker 2 (06:40):
In just ten seconds on sort of the next question
when it comes to what in NVIDIA and AMD and
the like cannot still export.
Speaker 7 (06:49):
What is it?
Speaker 1 (06:50):
Yeah?
Speaker 3 (06:50):
I mean the next question is how many of these
licenses are they going to get and what does that
mean materially for them, And the answer is, we don't
really know yet how quickly these licenses will come, how
quickly they'll be able to ship on, how much demand
they'll be, whether it'll restore the lost revenue that they've
already had to point to.
Speaker 2 (07:07):
Well, they're certainly demand for shares of these companies today
in video up four percent, AMD up six point four percent.
Ian King, Bloomberg News US Semiconductor and Networking reporter always
love it when you join us on Bloomberg Business Week Daily.
Speaker 1 (07:21):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eastering. Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (07:35):
So that's a look at three of the big banks
which we're interested in not just for their results, but
also for their macro commentary. J At Bardoise is also
watching this commentary closely. She's director in FX and EM
strategy at TD Security. She joins us here in the
Bloomberg Business Week Studio. I want to shift gears a
little bit in talk capital flows, because that's certainly under
(07:55):
your purview in this new Terra regime. We've got a
great story on the Bloomberg about the maker of Carrie
gold Butter, a favorite of pretty much everybody, has slowed
its US investment as it waits for more clarity on
President Trump's trade settlement with the EU. Just about an
hour ago, we heard from Embraer's CEO. He said he
may revisit its business plan due to US tariffs. It's
(08:15):
an evolving situation, certainly, but how do you see tariffs
changing the flow of capital big picture?
Speaker 8 (08:20):
I think the biggest thing is that they have injected
a lot of uncertainty to markets, and I think last
week was that wake up call because markets had become
a little too sanguine on Tara frisks and we came
back with multiple letters and that uncertainty crept backup, and
that's why the dollar is getting the bounce that we're seeing.
You're also seeing the change in capital allocation, which you
rightly mentioned. The biggest mover, and the first mover actually
(08:43):
has been Europe because they have been very quick to
repatriate and they've been very quick to bring money back
home into local equities, which is actually what's boosting the currency.
At this point, I.
Speaker 2 (08:52):
Want to jump in because as I was asking you
that question, we got a red headline cross in the
Bloomberg terminal. The President says that Indonesia will buy fifty
Boeing jets in a trade deal. How do you look
at a US manufacturer, a massive US manufacturer as a
bargaining chip when it comes to these negotiations.
Speaker 8 (09:11):
The thing is we've seen with Trump is that we've
seen a lot of frameworks or skeletons of a trade deal.
But right now, you know, we're still figuring out a
lot of the specifics. Even with the UK, we don't
know who the specifics are. That's why markets are in
a very uncertain mode. That's why you've not seen markets
rally on all of these trade deals the way you
would expect otherwise. There's still a lot of uncertainty, especially
(09:31):
to the degree that tariffs are being used as leverage
to extract a lot of concessions from the rest of
the world. The one interesting headline which came out a
few days ago is that the European UNIS is now
talking to its other non US trading partners to come
up with a joint trading alliance and take a stronger
stance to the US. I think those are also the
things which are interesting because while the US is a
(09:52):
very strong dominant power in the geopolitical space, it is
actually forcing the rest of the countries to step up
and you know, do a lot more physical spending and
also a lot more trade amongst themselves.
Speaker 4 (10:02):
Let's zoom out and talk about how all of that
impacts the direction of the dollar. We've seen a lot
of weakness this year when it comes to the dollar.
What do you see the catalysts next, at least for
the direction of dollar strength.
Speaker 8 (10:17):
Right now, I would say that in the very short term,
I think there is going to be a tug of
war between just short term technicals which tell you that
the dollar is very cheap from any historical standpoint, which
is why you will see sometimes when the dollar is
trying to bounce back higher. But structurally, I think this
is as convincing a time to sell the dollar for
more structural reasons than you would have received. For the
(10:39):
longest time, everyone would tell you that the dollar is overvalued,
but you could never come up with good enough reasons
or catalysts for that dollar weakness to sustain. After a
very long time, I can now come up with a
lot of reasons for why the dollar weakness will sustain
uni directionally in the remainder of the year. The capital allocation,
that's definitely one which we've seen in Europe. It remains
(10:59):
to be seen if other countries follow But another very
interesting bit is that the global investors of the world
have been overweight US equities, but they were actually doing
that unhedged. They were not hedging their currency risk at
all because currents the dollar would rally and give their
portfolio a boost. But that's changing, and that's why the
dollar is structurally seeing that pressure downwards.
Speaker 4 (11:19):
What about the FED here, If we only get one
cut this year, does that change the calculus of just
how much we see the dollar weekend for the rest
of the year.
Speaker 8 (11:30):
Not a whole lot, because actually what's interesting is that
the correlation between US traits and the dollar is actually
been broken. The correlation between the US toll and a
lot of factors are broken. You would see yields have
backed up, commodity prices have backed up, equities have backed up,
but the dollar is the only acid class unit directionally
heading lower. So that correlation, which you rightly pointed out,
(11:51):
would have been very strong at one point, it does
not matter anymore because the structural factors are at players
proving to be stronger a lot more than this correlation
to rates.
Speaker 1 (12:01):
JAZ.
Speaker 2 (12:02):
What happens to the value of the dollar if fetcher
power is somehow ousted.
Speaker 8 (12:07):
It is definitely a question We've been discussing a lot,
you know, and it's definitely topical with all the headlines. Uh,
you know, there are a lot of questions around the
legality of all of this, but it definitely is. The
more conversation you're having about this, the more I think.
Speaker 2 (12:22):
It's edging dollars market from the President.
Speaker 8 (12:25):
Yes, I think it's will definitely be injecting a lot
of risk prema into markets, and I think even Bessent
and Trump are careful about that. That's why I've never
there asked, but you know, straight up, are you going
to fire power? Till date, they have said no because
they know that the minute that answer shifts to yes,
markets will you know price in You know, treasury is
going to sell off and the dollar is also going
(12:46):
to massively sell off.
Speaker 2 (12:47):
So is the dollar a bigger guardrail or is our
treasury is a bigger guardrail?
Speaker 8 (12:52):
Treasuries are a bigger guard trail because still the date,
we've not seen any active signs of investors selling treasury.
So that's that has still been intact with treasuries being
the global safe fevan of the world. The dollar correlation
is already. You know it's scraping away already. So I
think Treasury is still the more intact one, which I
think you need to preserve it. And I think that's
(13:12):
why Bessent and Trump have been very guarded in their
comments about public.
Speaker 1 (13:16):
JT.
Speaker 2 (13:17):
Bardoise always good to see you. Thanks for joining us
on Bloomberg BusinessWeek Daily, Director in Fax and em Strategy
over at TD Securities.
Speaker 1 (13:26):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay and
Android Auto with 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.
Speaker 6 (13:44):
Well.
Speaker 2 (13:45):
He wanted to become an investment banker, but after arriving
at the University of Pennsylvania's Wardens School in two thousand
and seven, he realized he was lousy at accounting and
detested Excel, so we settled on startups. He eventually found
himself in the directing consumer healthcare business. We're talking about
Andrew Doodom, CEO of the telehealth company Hymns and Hers,
which for more than a year has been selling GLP
(14:07):
ones America's most coveted weight loss drugs. I'm reading from
a story in the forthcoming issue a Bloomberg BusinessWeek magazine.
It's the August issue, but you can read the story
now on Bloomberg dot com and on the Bloomberg terminal.
Madison Mueller and Devin Leonard wrote the story. We've got
Madison Mueller with us right now. She's a Bloomberg News
health reporter and she joins us here in the Bloomberg
(14:29):
Interactive Brokers studio. I think a lot of people are familiar. Well,
I would say there are two different types of people
who are familiar with maybe three with Hymns and hers.
There's the investing audience who followed the ups and downs
the roller coaster of this stock. They are the folks
who are customers perhaps of the company. And then maybe
(14:50):
there are the folks who are looking at the GLP
ones and looking for alternative ways to find this medicine.
How did he get on your radar?
Speaker 1 (15:01):
Yeah?
Speaker 9 (15:01):
So, I mean Hymns. We've known about the company for
a while because of their splash, very splashy advertisements, which
I feel like a lot of people have seen.
Speaker 2 (15:10):
I mean so it's not just us in the subways,
not just.
Speaker 9 (15:13):
New Yorker's in the subway. I mean, sure, I talk
about weight loss drugs a lot, so I do think
I get targeted ads. But like most people I talk
to have seen a Hymns and Hers ad on Instagram
or on Hulu. They advertise a lot, so people are
familiar with the brand. They had this huge Super Bowl
ad back in February about their weight loss drugs, and
so it's been on people's radars. But I would say
(15:35):
that the last year, after Hymns launched a compounded or
copycat GLP one drug for a fraction of the price
of what you know, the company's Nova Noordo skin Elai
Lily sell their drugs for it really put them on
the map. I mean, their stock rose a ton in
that time. They've experienced enormous growth. They're now worth eleven
(15:58):
billion dollars as of the last time I checked, and
that is like, really what got people talking about them
the last year. They are sort of unafraid to be
really loud and vocal in their marketing, sort of push
the boundaries a little bit. They want people to be
talking about their advertisements, be talking about what the company's doing.
(16:18):
So that's sort of like catapulted them, i think into
the conversation and obviously got them on my radar when
they started offering these GLP wan drugs.
Speaker 4 (16:26):
How did they actually manage to offer drugs in such
a competitive landscape? Would you say now that they're a
direct competitor to these giant pharmaceutical companies that are also
in on the GLP one space.
Speaker 9 (16:44):
Yeah, no, that's a really good question because these telehealth companies,
you know, we did see pharmaceutical giants like Eli, Lilly
and Nova Noordisk start to see some of these telehealth
companies like him as competitor, competitors because they were offering
their drugs at a lower price point when Lily and
Novo were struggling with shortages and patients couldn't get the
(17:04):
company's branded drugs. And then we saw these telehealth companies
crop up offering copycat versions that were allowed during the
shortages and really like start to steal market share from them.
And then we saw Novo and Lily, you know, a
few months ago, start partnering with these companies and actually
utilizing the platforms and the customer bases that they've built
(17:24):
to get their drugs out there to more patients.
Speaker 2 (17:27):
Wait a partnership, but then at least the Novo Nordist
partnership with Hymns, that kind of exploded.
Speaker 9 (17:32):
Yeah, that's been There has been so many twists and
turns and ups and downs with this saga over the
last few months. I mean, it was a surprise, I
think to a lot of people that Novo Nordisk, huge
pharmaceutical company would choose to partner with a telehealth company
that was selling essentially copycat or knockoff versions of their
brand name drugs for a fraction of the price alongside
(17:53):
the real ones. And so it was sort of a
surprise back then. But you know, the Hymn CEO was
saying that the two companies were really culturally aligned and promising,
you know, that he saw a future for them even
beyond weight loss. And then, you know, less than two
months after this partnership was announced, we saw Nova Noordisk
terminate the deal sort of accuse Hymns of some sketchy behavior.
(18:18):
And since then there's just been this public back and
forth between the two companies sort of playing out on
social media and playing out in you know, the media,
giving interviews to different outlets and sort of like going
back and forth accusing each other of different things. So
it's it's like a really unique situation where we have
these two companies duking it out like in a very
public way.
Speaker 4 (18:40):
You reported on this for months, said that you've been
working on the story for a long time and spent
quite a bit of time with Andrew Didom, the founder
of Hymns. I'm wondering if you could talk a little
bit just about kind of his his style as a leader,
as a founder, his background, and how that's helping him
(19:02):
to become like a legit competitor in this very high
stakes weight loss drug race.
Speaker 9 (19:08):
Yeah, I mean, so hims even though it's been around
for a few years. I mean the company started in
twenty seventeen, went public in twenty twenty one. And Andrew's
very young, he's been he hasn't really stepped away from
this like founder CEO role. He's still you know, very
involved in sort of the day to day. He's the
(19:28):
one that's coming up with new ideas for the company
to pursue, bringing him up in you know, board meetings things,
and like he is he is the one driving the
company and sometimes you know, we see CEOs like step
back a little bit at this point, but he has
three kids, you know, three little kids. He's still very,
very involved. His vision is sort of where the company goes.
(19:50):
And he has this interesting background as well, going to
Wharton where it was sort of like a breeding ground
for a lot of direct to consumer companies, and.
Speaker 2 (19:59):
He wasn't like World Parker.
Speaker 9 (20:01):
Yes, Razors. I think like there's a few examples that
we name in the story, and I don't think Andrew
was at school with them, but there we sort of
see this type of company emerging from Wharton, which is interesting.
And Andrew was involved in a lot of different startups.
He was at a startup incubator before you know going
(20:22):
into HIMS full time, so he has experience with launching companies,
sort of knows what it takes to do that.
Speaker 2 (20:28):
You know, you've been in the weight loss of beat
for what two years now, it's like what you live
and breathe essentially when it comes to your reporting, and
I think it's fair to say, based on what you've
told us, this is more than a fad, it's more
than just a trend, but it also is a huge
(20:51):
money making opportunity for a lot of different companies. Yeah,
that said, this stuff changes very quickly. A company like
Hims and Hers is you detail in the piece pivoted
over its history, what does it do now that is
sort of on the outs with Novo. There isn't the
shortage anymore, so they're not really allowed to compound anymore.
Speaker 9 (21:09):
Right, Well, so that's that's actually what they're betting on,
is that they will be able to keep compounding even
though the shortage is open. So there is this, I mean,
we'll call it a loophole. There's some argument over whether
or not it's actually a loophole in the you know,
the legend FDA legislation that says that these compounding pharmacies
can continue to tailor make or personalize, customize these drugs
(21:33):
for patients who can't take the you know, versions that
are commercially available from pharmaceutical companies. So essentially what HYMNS
is doing is they're tweaking the dosages, the strengths of
the drugs and giving patients lower dose version or tie trading,
you know, stepping up the amount of drug that they're
giving patients more slowly sort of to mitigate the side
(21:57):
effects that are quite common with these drugs, like nauseaving,
and so they're saying that, you know, these patients are
not available, you know, they're not able to take the
commercially available drugs because they have these side effects, and
so they need these personalized versions and by doing that,
they're technically allowed to continue compounding. But the FDA hasn't
(22:17):
really stepped in and ruled or said much about this yet.
So and we have a new FDA you know, commissioner now,
so we're kind of waiting to see what happens.
Speaker 2 (22:26):
Can you talk a little bit about how he's ingratiated
himself in the company with the Trump administration and with
RFK specifically.
Speaker 9 (22:33):
Yeah, So, Hymn's donated a million dollars to Trump's inauguration
fund back in January and since then has been making
you know, sort of broad appeals to the Trump administration,
to RFK, to Marty Mackeriy, who's the new FDA commissioner.
You know, their Super Bowl ad was very much in
line with some of the chief complaints that the MAHA
(22:53):
movement has about the healthcare system being broken in pharmaceutical
companies incentives, and they really tried to align themselves in
some ways with with RFK and with Maha, but there's
a fundamental difference in that Maha really believes that you know,
food and diet and exercise are sort of the ways
(23:14):
the you know, prime should be the primary thing in
the healthcare system that people are you know promoting over
pharmaceutical interventions drugs, and you know, that's what him does,
is they sell drugs. So at the end of the day,
there's a little bit of a disconnect.
Speaker 4 (23:28):
I think I don't want to spoil the whole story
because I definitely want our listeners to go pick up
a copy of Bloomberg Business Week magazine and read your article,
But you do start with this anecdote of the CEO
creating this donut, this very extravagant donut shop, And I
just have to ask, is this like a like a
(23:48):
dentist opening up a candy store, Like why does he
have this donut shop? Or is he just an entrepreneur.
Speaker 9 (23:56):
I mean, he's just an entrepreneur. And this is like
him and his wife wanted to create a space where
their family and friends could come, you know, in their community.
It's like pretty close to where they live, and it's
sort of a tribute to Andrew's grandparents as well, who
were local. You know, his grandfather was a local business
owner in San Francisco as well, and so this was
(24:17):
like sort of a passion project for them.
Speaker 1 (24:20):
But it is.
Speaker 9 (24:22):
I mean, if anyone's in San Francisco, they do have
good donuts. They have very decadent donuts, so it's worth
checking out.
Speaker 4 (24:28):
You eat your donut and then you take your.
Speaker 9 (24:31):
Exactly, that's America, Honestly.
Speaker 2 (24:35):
Elon Musk has posted about this. Really Yeah, he's posted
about like eating donuts and GLP one, So you're not
far off, Emily, Okay, people do it.
Speaker 4 (24:43):
Well, maybe I'm like just like Elon Musk.
Speaker 2 (24:46):
Check out this story. Check out this story on the
Bloomberg terminal and at Bloomberg dot com. It's also in
the upcoming new issue of Bloomberg BusinessWeek magazine. It's the
August issue. Be sure to pick up a copy of
that one when you see it at the news stands.
Speaker 1 (25:01):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five Easter and
listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (25:16):
Macle how about you let me drive?
Speaker 3 (25:19):
Oh no, no, no no, this is not a twenty alright,
please do travels.
Speaker 1 (25:26):
Wait, I want to drive. A good question God, this
is the drive to the clothes punks. The music, Well
run it on Bloomberg Radio. Well, TikTok, everybody.
Speaker 2 (25:43):
Ten minutes to go to the close of equity market
trading today, taking a look at how things are. Just
got an update from Charlie pellet Worth repeating the S
and P five hundred right now, down about two tenths
of one percent. The NASDAK is hired by four tenths
of one percent, the downdown eight tenths of one percent.
I want to bring Indavid George, senior research analyst at
a BIR. David joins us from Franklin, Tennessee. David, good
(26:05):
to have you on with us. How are you great?
Speaker 7 (26:08):
How are you good? Afternoon?
Speaker 2 (26:09):
Good afternoon. Let's talk a big picture here. We heard
from the banks three of the banks today. We'll hear
from three more tomorrow. We're sort of at the beginning
of earning season. I think a lot of investors were
expecting the last quarter to be pretty bumpy when it
came to the outlook for tariffs, we didn't necessarily see
that start to seep in to what extent right now?
(26:29):
Do you think the market is pricing in tariff risk?
Speaker 7 (26:32):
You know, that's a great question. I think relatively low.
I think that there's a lot of complacency. And this
is more of a market comment from my perspective rather
than the banks, But I think there's a lot of
complacency around tariffs that the ultimate rates that are being
discussed in some of these letters that have gone out
over the last few days are going to be something
(26:54):
on the order kind of in aggregate to them around
the fifteen percent area. So we'll see, use the president's term,
we'll see what happens. But as it relates to bank earnings,
it's not something that we've really seen have much of
an impact. I think in the last couple of months,
we've seen a pickup in loan demand, and I think
part of that stems from anticipatory buying of inventory, so
(27:19):
that has resulted in line of credit utilization picking up
to some degree. So there's been some impact there, but
we certainly haven't seen any of the negatives as it
relates to potential impact on corporate profit margins and so forth,
and that's something that will take if it is indeed
an issue, something that will take some time to occur.
Speaker 4 (27:40):
Have we seen any positives? And what I mean by
that is sometimes you know, when bank earnings roll around,
you often hear people say that volatility is actually market
volatility is actually good for banks. The traders, you know,
pull in more revenue because they're just simply trading more.
Did we see that in this current quarter that all
(28:02):
of the market volatility that had to do with tariffs,
did it help banks at all?
Speaker 7 (28:09):
Yeah, at the beginning of the quarter it did emily.
The volatility and currencies, commodities, and markets broadly throughout the
month of April in the beginning of May helped derivatives
trading equity trading during the beginning of the quarter, and
then as volatility calmed down, we kind of saw the
baton being handed off from vall related activity to capital
(28:35):
raising activity M and A. So we saw a number
of IPOs and secondary offerings throughout the tail end of
the quarter, as well as a pickup an m and A,
and the momentum of late seems to be more on
that end rather than volatility related activity.
Speaker 2 (28:52):
I do want to make a note that the President
is right now making comments at the Pennsylvania Energy and
Innovation Summit in at Pittsburgh. He made some comments about
the investments from tech companies he is. You can check
out live go. He's attending the Pennsylvania Energy and Innovation
event and you can watch and see his comments on
live go.
Speaker 4 (29:13):
David, I want to ask you specifically about earnings here
from JP Morgan, because you downgraded JPM to an underperform
You said the risk award is getting unattractive. Talk a
little bit more about that stock rating, that stock call
that you made.
Speaker 7 (29:30):
Yeah, the stock call really is just a call on
the stock itself. You know, many times the fundamentals of
a company and the stock aren't necessarily one and the same,
and I think that that's true in this case. We
have the utmost respect for JP Morgan. It's probably the
best company that I cover fundamentally. I just believe that
(29:52):
we believe that the market has priced it that way.
JP Morgan trades it over fifteen times earnings. It trades
it close to three times tangible book. If you were
to look on your Bloomberg terminal and run a historical
evaluation analysis on JP Morgan, it would suggest that it's
never been more expensive, and the market is pricing in
We think a permanent, a permanent improvement and profitability relative
(30:20):
to the rest of the industry, and banking to us
is a commodity and as great as JP Morgan is.
Word of the view that the excess returns that they've
been able to generate are going to be a little
bit more normal going forward, and we simply think that
the upside is fairly limited. So we're paid to have
an opinion, and we think that investors should sell the stock.
Speaker 2 (30:39):
Okay, well, let's talk a little bit about tomorrow and
Bank of America. You upgraded Bank of America in April.
What should investors be on the lookout for now? And
why are you bullish on the company?
Speaker 7 (30:51):
Yeah, so we actually downgraded BAA to neutral the same
day we cut JP Morgan to a sell. But that
stock was up over thirty percent just that couple month
period of time. I think BAA squarter tomorrow is going
to be relatively good. I think expectations around that stock
are not nearly as high as perhaps Wells Fargo today
(31:11):
as well as JP Morgan so BAA should should should
benefit from all of the things that we've talked about
as it relates to volatiley related activity in the capital markets.
And then obviously Merrill Lynch benefits from asset prices being elevated.
So we think Meryll's going to have a pretty good quarter.
And the bank is performing well at the same time,
(31:33):
and the stock has lagged peers, So we expectations are
low and we feel we feel okay about BFA going
into tomorrow. I think that the numbers are going to
be are going to be good.
Speaker 2 (31:43):
We have an interview with Brian moynihan tomorrow afternoon in
the two o'clock hours, so I encourage everybody to check
that out. David Weston, we'll be doing that interview with
Bank of America's Brian moyn Ahand. Okay, so you talked
about JP Morgan, you talked a little bit about Bank
of America. If you think about the broader group of
banks in the bro the banks as a broader group,
are you thinking that they're I don't know that this
(32:07):
you what do you think about in the context of
this raid environment, because nobody can really make sense of
the rate environment right now you hear one thing from
the White House, you hear a completely different thing from
the Federal Reserve.
Speaker 7 (32:17):
What's your view, Yeah, I think the answer is somewhere
in the middle. Like most things in life, I think
it's reasonable to expect that the tariff impact is likely
to be I'm reluctant to use a word transitory, but
is likely to not have a longer term impact on
(32:37):
inflation expectations. So I think it's reasonable to expect it,
and the curve is pricing this in even after today,
around fifty to seventy five basis points of cuts by
the end of calendar twenty twenty five. If the long
end stays where it is, which we think it's going
to be in that four twenty five to four to
fifty range for the foreseeable future, that's actually a pretty
(32:59):
good environment for banks. If you go back the last
three or four years, we've had a very flat, if
not inverted, you'll curve for some time, and that has
had a negative impact on the profitability of banks, particularly
the regional banks. So to the extent we can get
a sustained positive shaped curve, we think that's going to
actually have pretty positive implications for most banks going forward.
Speaker 2 (33:23):
David, thanks so much for chatting with us this afternoon,
talking all things and banks. We got to get you
back on soon. David George's senior research channelist over at Baird.
Speaker 1 (33:32):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
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