This is Bloomberg Business Week. I'm Carol Masser and I'm Bloomberg Quick Takes Tim Stanovic. We're here every day bringing you the latest news from the world to business and finance, plus technology, politics, economics, all partnising the power of Business Week reporters and editors, not to mention our journalists and analysts in more than one twenty countries. You can download
Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube. Search Bloomberg Global News. You're listening to Bloomberg Business Week. Carol Masster, Katie Greifeld in for Tim Stanovic. Hey, Katie.
Some of the headlines that we saw when it comes to COVID today the President President Biden coming out saying his administration will double it's order of rapid test to send to Americans while also distributing high quality mass to help fight a surge of cases of the macron varying. Right. That's something I know. Mike and I were just talking about the quality of maths. It's a difference. It it matters. Yeah,
in my life. I mean, I would love to get my hands one of those masks, but I'm trying to order them off of Amazon, and it's it's you know, that's a chunk of change. Yeah, it's a chunk of change if you can get them. Hey, let's see what he is seeing when it comes to the latest headlines. By the way, China detecting O Macron in a second major ports city. So we continue to see outbreaks certainly around the world, and for them it's tougher ahead of
those Olympics. Dr Andy Pekosh, she's back with us, Professor of Molecular Microbiology and Immunology at Johns Hopkins University, Bloomberg School of Public Health, of course, supported by Michael R. Bloomberg, Founder, Bloomberg ALP and Bloomberg Philanthropies. He joins us once again on the phone from Baltimore. Dr Pekosh, good to have
you back here on Bloomberg with Katie and myself. How are you and what's the latest um from your perspective and the headlines that we really need to be paying attention to. Well, you can see that the case surges
with the Macron are still at you know, unfathomably high levels. Um. I know there's some parts of the country that are hoping to see a plateau, but at the end of the day, we are we are at a such a high level of Kate says that even if things started to go down, we would be at high levels of
cases for a week or maybe even more. Um. So it's really a matter of dealing with the surge that's ongoing right now and dealing with it with the lack of certain essential things that we need, like you were mentioning before testing, and various other things and dr I mean, it seems like the narrative around the omicron variant is that it's less severe. You know, you're gonna get sick, but maybe it's you know, equivalent to the common cold.
I know that hasn't been the case for everyone, but uh, I mean, my dad has been joking for weeks that he doesn't want to get a macron. He wants to get the variant that comes after a macron because it feels like it's been getting less and less severe. But does the science actually work that way? I mean, should we believe that the next variant that comes along will be even milder? Yeah? No, Unfortunately, the science doesn't suggest how the how COVID nineteen disease is going to change
in the future. You know, I think even with all macron if you're unvaccinated, I would be very concerned about getting infected with a macron if you were unvaccinated, because those are the people that are in the hospital right now that still represent the majority of people with the severe disease um you know, for the rest of the population, particularly because of our immunity that we have from vaccines um those vaccine induced immunity doesn't protect us from infection,
but it is preventing lessening disease, severity, lessening symptoms. It's very similar to what we talked about on an annual basis with influenza vaccines. The vaccines are not not preventing infection as efficiently as we maybe would like them, but they really are protecting against us against severe disease and and and quickening the course of the infection in individuals. So when you look into your crystal ball, I'm curious.
You know, we keep thinking, all right, it does feel like certainly better than where we were a year ago, but it still is staggering to think we are in year three of this, um Dr peckash. I guess I'm trying to get my head around that. Well, I always probably be living in a world with COVID, but we'll get to a point where I look at COVID just like a case of the flu. And I shouldn't say jas because the common flu every year kills thousands of
people too. Right, absolutely, But but I think if there is a sort of silver lining here, it's clear that people who are vaccinated and who have subsequently gotten infected have an amazingly strong immune response that's not only very high, but it's also broad, meaning that it recognizes lots of
different variants that have been through the population already. So this combination of vaccination and infection is going to put us at a place where severe disease for at least most of the population is going to be somewhat unlikely. You know, we'll need boosters periodically to maintain that. Um My real worry though, is, you know, we really don't know a about the high risk population. So we know
the elderly are more predisposed as severe disease. We know there's certain medical conditions that make you predisposed as severe disease. Those are the populations were really going to have to keep an eye on as we go forward, because we want to make sure that we're protecting them as well as as much as we're protecting the healthy part of the population. And after we don't have much time left.
But I would love to hear your perspective on tests because I mean, just in my own personal life, I've heard some mistrust about rapid tests, that you know, they're kind of faulty, that the PCRs the gold standard, that's what you've got to get. What do you think rapid tests work, particularly when you're showing symptoms, and so they'll help you know if you're infected with COVID nineteen or
if with something else. UM. Given the test shortage, though, I think a simple thing to remind people of is if you've got some sort of respiratory symptoms, stay home period. If you're infected. You may be infected with COVID, you may be infected with flu, you may be infected with something. So if you don't have access to a test, just keep the simple basic principles of it. If you're feeling ill, stay away. UM use the rapid anagen tests if you
have them. When you're symptomatic and then always with a positive rapid anagin tests confirmed that with a PCR test, because that means you have uh covid and you need to get your numbers into the public health monitoring system. All right, We always appreciate time with you, Dr Andy Pekash. She's professor of molecular microbiology and EMIL immunology at Johns Hopkins University, Bloomberg School of Public Health. And of course, as we mentioned, it is supported by Michael or Bloomberg,
founder of Bloomberg LP and Bloomberg philanthropist Katie. But quickly, you can call your dad Hopie was listening, because that was some good information there. We're gonna send him the podcast. You're listening to Bloomberg Business Week and this is Bloomberg Radio. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. H Katie, we talked about it. There's a bunch of Goldman stories on
the Bloomberg that are catching people's attention. I love the headline about the Goldman trading death. We haven't got their earnings yet, but they're giving us a little bit of a preview. I think, yeah, absolutely, And this is interesting because it's about commodities, which I know we're about to get into. But it feels like the bright spot for so long has been fixed income. But I don't know, we'll see maybe the leadership is changing. Yeah, that's a really,
really good point. We're gonna get into that with our own tree. Not AAJ and his financial porter at Bloomberg News. He's on the phone in New York City. UM, shree, great to have you here with us. We mentioned a most read it's a Bloomberg exclusive about their trading death, their commodities trading death. What's going on again? It's truly a window into the kind of success that Waltz trading
operations have seen in the last two years. The Goldman commodities business is expected to post the best performance in over the decade, and that mirror is the kind of excessive successive seen a Goldman Sex and other banks. But it is a little more special than that. At Goldman
Sex commodities business does have pride of place. It was the business from which you had senior leaders went on to run Trading Investment Management HR, and even all of the film including president and CEO, Lloyd Blankfine and Gary Cone all came through the commodities business, and in twenty seventeen through seventeen eighteen, there was a room worried that the business wasn't serious decline mirroring the what people felt
was a secular decline in trading across Wall Street. But much like everything else that these businesses have touched since the onset of the pandemic, you have seen a remarkable done around the fortune, and the commodities is just a microcosm of that. And so I love, I love the headline that this trading death the Commodities says it dodged the Acts, minting billions again. But I mean it feels very fickle that. Obviously we've seen a ton of just
chaos almost in the energy markets. But I mean, could the Acts come again when things inevitably slow down or does this the fact that they are so profitable right
now does not buy them time. Kittie, You're absolutely right about the whole idea of it being fickled, because remember when it was at its lowest point in twenty seventeen, the business was pulling in revenue that was less than ten percent of what it would normally do in its best years, they would say this worries and at that time the film like Goldman, Fax was also having a leadership transition where when s the traiders rule the firm, you had a bunch of advisory bank or suddenly rising
to the tops. And when those people look at a business like a commodities trading desk, basically something that's scary, complicated and volatiles that sucks up way too much capital, paltry revenues and return when equities that would antagonize and scare away a lot of shareholder, but those who wanted to stick it out and those who wanted to keep the business make the point that it is counterslick, circlical in nature. It has its best years and moments of turbulence.
The best performances for that desk was it's sort of in the two thousand, seven, eight nine ten period when not a lot of other things were going great in finance, and now since on set of the pandemic, when you have negative oil prices and then shooting back up to eighty dollars, you have a power grid failures in the US, frenzy price action in the European gas and power market. When you have a business that is able to participate in all those price moves, they will come out and
looking good. And that's where Goldman's acts will come UM. One of the longer term implications of this tree in terms of I'm thinking of other firms who are looking at this UM, I mean, I don't know what changes of anything. Much like we talked about how the commodities business is a microcosm what was happening across all of training, it's also a window into what the commodities business itself
is looking like. Goldman's in house animalst Jeff Curry widely followed Voice and Energy Markets came out and said that you know, we're entering another supercycle that could last another decade. Jeff Curry for rose to prominence in the mid two thousand when he called a bullmarket that was going to be in place and lost for a while because of the China driven boom, and he forecast all prices going above hundred dollars. Peoples Right ultimately went up to about
hundred and forty dollars. And when he says that this period of a lot of interesting price action will continue to take place for over a decade. You will be surprised if suddenly a lot of other banks are thinking about beefing up their trading operations, trying to become more visible. You have to be committed, and you have to be certain you want to take the plans because there will be a lot of courts associated with the business and a lot of capital charges, so you better be prepared
to guts it out. But the rewards can be plenty and pretty if you end up on top of the plan. And sure, we have just about forty seconds. But I am curious now. I mentioned fixed income trading that had been the bright spot, it felt like, through the pandemic. But we got those Jefferies results yesterday. You saw a big drop off there, at least for this quarter. I mean, are are the energy traders expected to be the all stars?
Look the energy trading this sits within six income. And when the Jeffreyes six income numbers came through, you saw what happened. They posted a slowdown in the sick business and the shares at one point put down ten prevents for the day. So when the bank's report on and over the next week, it will be a tale of two hubs. Everyone will look at a rear ru mirror
and will be very pleased with how they performed. They will be extremely keen to hear their forecasts and predictions for what lies ahead, because that's what is really going to say the stop price movement. They want to see if that brilliant action that we've seen over the last two months canned, They in place or we're a waiting
a soda. Alright, good stuff. Um. As I mentioned, there's like three stories among the top ten on the bloom Park among the most right, UH, and that includes Shere's exclusive and financial port Bloomberg News with the latest and comment sack Stock up about half a percent today. You're senaing to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio Katie. The Bloomberg
Business Week Your Head issue. It's out. They are looking at the trends, the companies, the movements, so things are really going to watch out for UH this year, and that includes a story on Hollywood heading back to theaters and really hoping that movie goers end up following That. New issue is out on newsstands online at Bloomberg dot com. Backslash business Week and also on the Bloomberg terminal. Let's
bring in Bloomberg business Week at or Joel Webber. He's on the Access line in Brooklyn along with Bloomberg News reporter Brian Eckhouse on the phone in l A. Joel, have you been back to a movie theater? I have, and it was like, uh, one of my favorite moments in that pandemic. It was like, you know, you know, I wanted to make sure that I saw done on
a big screen and it was totally worth it. I love doing it, um and you know, if it weren't for Oh Macron, I would be there like every week, I think, um so, so I'm bullish on on movie theaters in general. I think it's a it's a thing that people love doing and I want to be doing it again. And I think Hollywood feels the same, right Brian, Yeah, they do. Uh. It's definitely a big push to get big films established film names that Batman coming in March and others to write trying to make a event and
experience again. June was available on HBO Max. That's right, saw it. It was beautiful that didn't have the sweep that you would have seen on a big screen that Joel had. Okay, I'm curious to hear you haven't been, have you? I have not been. The last movie I saw in theaters January, cats have not been back since I heard that. Fitting I could have guessed that's what
you saw. Unfortunately I have a very defined brand. But in any case, Brian talked to me about, you know, the theater exclusivity, because you have sort of seen this trend emerge where Okay, a movie will get released in theaters, it's exclusive to theaters for forty five days. I think it's stat I saw, and then it's available online on streaming services. I mean, is that the way of the future. Our theater is trying to change that? Well, it's the
way of right now for the pandemic. You know, we would see films come out on streaming services three months after it hits theaters. Before then, it was a lot longer of a time period. Last year, some of the studios, including Warner Brothers, they put films simultaneously in theaters and on services like HBO Max. Uh. Theaters didn't like that.
It really crimp their there were seats, so sort of a compromise and experiment going forward to doing that forty five days thing you're talking about really have films and theaters if it hits theaters for you know, a month and a half, and then it'll hit HBO Max, it'll hit Peacock, Paramount Plus and others. So Brian talk to us about what it's going to take for you to get into a theater. Is it gonna be Tom Cruise and is it gonna be Tom top Gun or is
it gonna be Tom Cruise Mission impossible? That's the question before a macron. I was looking forward to seeing Lucorice Pizza, which is the theaters right now, the latest all tom Aul Thomas Anderson movie. I haven't seen it yet, looking forward to seeing it. I think The Batman in March might be what gets me out next. And what about Hollywood?
Like the first movie that we're really going to see this strategy come to bear on is going to be Ambulance, Right, that's one of the first coming out Peacock's film and sorry it's the universal film that will hit theaters in April and then four ane days later it will be on Peacock. Um. I think we're to see a film mcannel last week from Universal. Very similar will be on
Peacock probably in late February. You know, I do wonder too about the increased competition just for talent and content, right, the streaming services are still going to be competing for lots of stuff. Um, you know, what does this do to the price of things, especially as we kind of increasingly move towards normal any indications, I mean, it sounds like box office receipts are still going to be a little bit down once we get back to a little
bit more normal. Yeah, I mean, we'll see receipts be below where they were before the pandemic, although it'll almost certainly do nearly double what it was last year, So theaters are gonna see a bit of a return, not
what it was, you know, pre covid. Uh. In terms of streaming sites, you know, they're focusing really heavily, and you said on driving new subscriptions, on growth, and for a lot of the studios, they're focused increasingly on these services, even more so in some cases than when they put in theaters. And Brian, you mentioned simultaneous releases, you know, putting big films out online and in theaters at the same time. There's I get it. They didn't like that model.
Did anyone like it? Though? How did those films actually perform? A lot of the films had old box office receipts um King Richard was on HBO Acts in November around Thanksgiving simultaneous release. It was pretty well viewed online. It didn't get a great box office. Um, we've seen that in other cases as well. Matrix did okay last month, but again it had that release at home. In the case of June, again, I saw that at home. I didn't see that in theaters. Um, it may adult. You know.
The box office for seats or grows for these films was a particularly interesting case study, Brian, because it was like, you know, one of the things that I jumped out to me as we're looking at this lineup where you've got, you know, a Batman movie and Tom Cruise movies like these are like Avatar to which we haven't even mentioned, Like we've got we've got known entities and Hollywood always
loves the sure thing. At the same time, it's like I kind of want to go to a theater and just see a big, awesome movie that isn't a thing I've seen before, you know, Jurassic World being uh, yet another thing that's coming out. So it's so Carol. Katie, here's my question for you. Are you more inclined to go see something that's all, you know, a known entity, or do you want to see something that's totally new from Hollywood in the theater. And what's the thing that
brings you back? About you, Katy, I want to see my dinosaurs up on the big screen, just totally, but I think a known entity, I'm willing to be like, Okay, I know that's something I want to see on the big screen. What about you, Katie? Yeah, you know I would go in for cats too, but in terms like to get me into the theater again, I mean I was I'm I'm terrible at watching movies. I just fall asleep anyway, so I'm probably not the target audience that
these theaters are worried about. Anyway. What about you, Joel, Well, I'll go back, you know the moment that um, I can go into Date to Night and not you know, be worried about Omicron Like, I will take that option, please, Brian. Yeah, I mean I think what's really good for Hollywood this year is because of the postponment from COVID. You had
this really a strong slate of big movies. Uh, this is really gonna test whether people want to come out those theaters are not because you have such a robust lineup of well known content. Yeah, I'm missing those big, cushy seats. You now, you kick back if you go up, And I'm just gonna say, um, alright, guys, fingers crossed, we can get back to those uh movie theaters more so in Joe Weber, Editor Bloomberg business Week and Brian
Nett Cass, reporter at Bloomberg News. Catch the year ahead issue of Bloomberg Business Week on newsstands, online at Bloomberg dot com and also on the Bloomberg terminal. This is Bloomberg Radio. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. This definitely shut up on our radar today. It's about the many scandals over at metaformally known of course, is Facebook and Katie how some of this may be a bit
demoralizing for employees. Um when you think it's the case, especially as they're trying to recruit folks in it like what, I would think that's a pretty difficult on their recruiting team to catch my eye that it didn't seem like a lot of the disfaction had to do with COVID, which I feel like when we hear about employee morale has to do more with COVID than anything else. But
now with Meta, Yeah, it's a really good point. Hey, let's get all the details that Bloomberg News tech reporter Kurt Wagner, he put it out there on the Bloomberg He is on the phone from our San Francisco bureau. So, Kurt, what's exactly going on here? And what what's what's everything that's got so many of those Meta employees down? Yeah? Well, I mean this has been a couple of years in the making, as I'm sure you both know. I mean
you've seen stories, right. First of all, I think the most obvious is there's just a lot more leaks coming from Meta formerly Facebook these days. You know, that's usually find employees aren't super happy. I think a year and a half ago or so, we saw an actual walk out from employees who were not happy with how the company handled President Trump's post. And then this week, you
know what, what kind of prompted this. I wrote this in our newsletters and when we prompted this was blast door does this ranking of the best places to work, and Facebook is usually in the top ten. In fact, three times it's been the number one place in the world to work, and this year it was forty seven. And it was just kind of a reminder that this company that has historically been, you know, the dream job for a lot of people, is not really the case anymore.
And I think, you know, it's just proof that a lot of the drama and scandals they dealt with over the last couple of years is actually having an impact. And Kurt, that's exactly what leaped out to me that. I mean, Meta formerly known as Facebook, it was the number one company three times, to slip to forty seven. I mean, what happened? Is it just that, you know, Facebook now Meta is just a bigger, more publicly out there company. But I mean it's just an incredible drop.
How do you explain it? Well, I think imagine, you know what it's like to work there, and kind of every two months or so, it feels like you are dealing with some kind of scandal that you know, questions like am I doing good in the world, right, Like that is the question that a lot of employees have to ask themselves regularly, and I think that came to
ahead this year with some of the Facebook papers. You know, we had the whistle Facebook whistleblower who came out and released all kinds of internal documents, and you know, the CEO is often testifying before Congress, and it's just like a lot of heavy, heavy stuff to think about on a day to day basis when you're trying to do your job, and not a lot of jobs have that. And you know, to Facebook's credit, it's because it's very influential and that's why a lot of people like to
work there. They can they can have huge impact. But at the same time, with that impact comes a lot of questions about what that impact is. And I think people struggle with that well. And I also think about, you know, losing employees costs a company something, right, you you lose an employee who might have been pretty productive that led to top and bottom lines gains at the company. It costs a company to recruit, train, and all that good stuff. They're also those some workers, like I think
about engineers. We've talked about the tightness in the market. Everybody needs, you know, programmers, engineers. I do think about how that might ultimately impact if they can't get engineers. Do they care as much engineers about what's going on in terms of morale um and if so, how that might impact at his bottom line or the ability to produce new products. Yeah, I mean certainly, if you can't hire engineers, it's gonna be hard to grow, right, I
think that's pretty obvious. And I think stereotypically, you you often think like, well, engineering department, probably more than any other team at a at a tech company, is a little bit more heads down, right, like they're just building. They're they're focused on the code, and there may be less impacted by some of the cultural things that happen. But at the same time, I mean that's that's the stereotype and and and it's not going to be relevant
to every every person who's there. And if you have a chance to go build something cool at a company that also aligns your vision, of course you're going to go do that. And um, I think that's part of the reason we're seeing Facebook lean so heavily into this idea of a metaverse, right. It's something exciting. That's something future is stick and if you're an engineer and you want to be building, um, you know, products that are
on the cutting edge. While Facebook made a pretty public stand here's what we're building, you know, come join us. And I have to imagine recruiting with a huge part of that. And so Kurt employees a lot of discontent. They're a lot of existential questions there. But what about advertisers? Are they asking the same questions? And uh, have we seen any pullback in spending? We have not. And that's part of the reason why I thought this UM kind of angle or this anecdote about the glass door ranking
was notable. Was you know, for years, we have not really seen a whole lot of anything changed with Facebook because of all the stuff going on. Right you keep thinking, well, certainly advertisers are going to pull back, right um, or business is going to slow down as users lead the service.
But that hasn't really happened, right Um, despite all the bad things that have gone on around Facebook, And so the fact that you know, employees might be the one area where it's actually having an impact, I think was pretty notable, and that I should point out. I mean, Facebook, our Meta is huge. It has sixty eight thousand employees. It's not as if nobody wants to work there, right, It's just that at a certain point it becomes harder
and harder to recruit. Hey, Kurt, just real quickly, twonds here, does the internal management, the senior managers that they care, they looking to make it better? Just quickly? Yeah? Absolutely. I mean a bunch of people actually left last year, a bunch of high ranking folks. But this has been the fact that you can't hire engineers has been a big issue for Mark Zuckerberger for the last couple of years. So this matters to them immentally. I'm sure all right,
we're gonna leave it there. Hey, um, Kurt, thank you so much, really appreciate a Bloomberg News tech reporter Kurt Wagner on the phone from our San Francisco bureau. Shares of Meta uh down about one point six percent in today's session, but we've seen a lot of big tech under pressure stocks down about two and a half percent so far in this new year. You're listening to Bloomberg Business Week on Bloomberg Radio. Row. Yeah, but you let me drive Oh no, no, no no, no, all right, please
album of Bridey Gravels. I want to drive. It's a good question. This is good ride to be closed on radio. All right, just got a app not in a half minutes left in today's trading session, and we are seeing those major equity averages dive, just talking about them a few moments ago. They are at their loads of the session, so down about two and a half percent on the NAZAC.
Really feeling the under performance among those three major equity averages, but the SMP also down about one and a half percent. This is ahead of course of tomorrow's big bank starting to report earnings, will hear from JP Morgan City, so that will certainly help impact the tone of the trade. Let's get to the drive to the close. Kate Fettus is with us. She is president, chief investment officer at Grace Capital. They're a Boston based registered investment advisor. She
joins us on the phone from Boston. Kate, nice to have you here with Katie Greifeld and myself. So the market trade, I don't know it's a all to one safety say. We've seen some losses, we've seen some rallies. What do you think fundamentally might be the tone of the markets as we just get ready to kick off that earning season. I think, fundamentally, thank you for having me, Carol and twenty, But fundamentally the market is looking to take a pause. It's looking to take a pause because
we've had three very strong years. Last year, the market was up twenty nine percent. And what's fascinating about it is if you look at how it happened, the market was up. It did better than the Russell one thousand growth and better than the one Russell one thousand value, So that tells you that it was a very narrow market. The top ten companies uh playing an outside performance in the market. At the same time, even though the market is little worried, they're like, oh, we had a big year.
We gotta calm down. If you think about it, strifically, looking at the facts, the smp UM multiple declined from forty one times a year ago to eight times currently, So the earnings in the spire actually grew last year, so things are not quite as dire as if you look at what's going on today, it would appear so okay. To your point, you know, we've had three big years. For stop the stock market looking to take a pause. Now we're also cruising into the federal reserves lift off
from zero, potentially the first interest rate hikes. Since how do you position in that environment? What are you expecting? How how is that going to play out? You know, I think it's hard to guess what the Fed is going to do in a in a general sense. Um, So I am not someone who likes to make a lot of macobetts. Having said this clearly, I think the Fed directionally has been very clear with what they want
to do in a general sense. You know, the the the logic is, well, the head's gonna raise rates, therefore you should, you know, buy the banks and sell the text stocks. Bed's gonna raise rates, therefore the market is going to go down. Not necessarily in a general sense, the FAED has proven itself to be quite dubbish. I think, um, if you really look at the way it behaves, it's clear that it's not so much about its mandate of full employment and to percent inflation as much as keeping
the markets buoyant. So any time they do anything and the market looks like it's going to react negatively, they back down. At the same time, it's not clear that raising rates will be bad for the market general yelling raise rates from actually zero to about one five beginning in and the Dow Jones went up did extremely well. Only person with a better record was Greenspan, because what happens when you raise rates in the US. It's a
global market. You're gonna track inflows from Europe and Japan. Okay, I want to go back to something you said at the top to Katie and me, and you said performance. And I'm looking at some of the notes to you shared with our team and our producer um performance. You said so concentrated that the sp performance bested both the rust of one thousand growth and one thousand value industries you're talking about last year in particular. I just want
to confirm that. And then are you saying that that shows that there's a lot more room for gains by other equity plays, maybe not those big cap names, to continue the momentum there. There is a lot more room to continue the momentum at the same time, because remember at this point, more than half of the market is being invested passively, people just putting their money blindly into
the index funds. So that creates some vulnerability because you say, oh, I'm going to be diverse FI and I'm just gonna buy the SMP five hundred, not going to use the stock picker. And you don't understand really how vulnerable you are that thirty. You know, percent of your performance is being controlled by handful of stocks. So if that handful of stocks stumble, an in a passive index investor in
the SMP could will stumble along with it. An active manager like what we do, where you're actually picking stocks, you could actually have a very good year despite the market in an aggregate sense doing poorly. And so kate, as an active manager, where do you see the most opportunity right now? You know, on the single stock level,
but also on a sector level. What looks most attractive in a I'm going to answer that in sort of a long term and near term and you know, I'm going to contradict myself a little bit from what I said not that long ago, but hey, that's that's life. On a long term basis, technology is clearly the place to be. If you look at the market, it's very
dominated by the big tech players. And actually we ran this for our annual report of the s and P five hundred has its headquarters in California, another eleven percent in the Washington State. So technology is an outsize um part of the economy global economy, and that will continue in the near term. However, I think SECT energy is
actually interesting. We are also E s G investors, so in the general sense we shy away from most energy, not all energy, and the overall market is very E s G centric right now, and as a result, you're having an under investment in traditional energy. So when you have an under investment with the same level of demand you've always had in the end, globally we have a growing population India, Africa, right, you know, we got growing so energy. I think it's very interesting. We've got a
couple of names that we really like. Um just quickly, just got about twenty seconds, Kate, Oh okay, I'll go out, sir. I like Sneer Energy. A yields five and a half percent. What we like about it's take or pay contracts. They felt that you gotta go, Yeah, we gotta go. That means we're just gonna have to come and have you back because we do like talking names. Um, Kate, do have a good rest of the week. In a good week in ka Fatas She's president, chief investment officer of
A Grace Capital on the phone from Boston. 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 to Bloomberg Global News.