Musk Thinks Tesla Robot Could Eclipse Car Business

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. Alright, so a bunch of things going on. Fiser's covin I team, PILL receiving backing from the European Unions Drug Regulator UM offering a tool to manage coronavirus infections at home. Really eas the burden in hospitals. We're seeing that go on. Tim, here's something else that's really interesting, Denmark saying the virus is no

longer a threat to society. God, that's really good. Germany they still saw another surgeon cases. I think they're thinking the peak happens into February. It's all about people learning to live with it. Yeah, exactly, and but tracking it so that we know what we need to do and when we need to kind of step up some of measure some of the measures against it. Hey back with

us again is Rupa Rupalli LeMay. She is Director of Behavioral and Implementation Science at the International Vaccine Access Center. She's also the Associate director for Behavioral Research at the Institute for Vaccine Safety. It's all at Johns Hopkins Bloomberg School of Public Health, supported by Michael R. Bloomberg, Founder, Bloomberg LP, and Bloomberg Philanthropies. Rupolli on the phone in Falls Church, Virginia. Hey, nice to have you here. How

are you. I'm good, Thanks so much for having me. Well, it's good to have you back with us. I'm exhausted by COVID. I'm sure you guys are do I do. I love that we though have more tools and we can figure out how to read the data and what it means and how to maybe you know, impact the data by wearing masks or social distancing and so on and so forth. What's front and center for you right now? Roupoli?

I think what's really been key here is, as you know, There's been a lot of chatter because of omicron and what's happening. And I know that we're plateauing in many parts, especially here in the Northeast, but in other parts of the tree we have not plateaued. But I think the

key here is really not to let up. And I think that is my concern is that in many school districts they are lifting mass mandates for example, we're thinking about other loosening, I would say, of different types of multilayer strategies, and that's not really what we should be doing right now. Um, And so that's a little bit of concern for me. When do you think we can

start doing that? If? If not now? When you know it seems to be the really highly contagious variant is on its way down in many parts of the country. What's a realistic time frame for us to think about this stuff. I think a more realistic time frame is that, you know, I think if we can even wait for another month or so, this will also coincide as we'll start to get a little bit warmer, which naturally allows

for more people to be outdoors. We see drops in respiratory diseases in general, not just st our school B two but like RSB and flu activity for example. So I think that if people can hold on for another month or so and continue to wear their masks, I think that that will help a lot in the long term. What we've seen in the past is that as soon as we start to see cases go down, we start to loosen restricttions, and then we go right back into

another surge. Right, So I'm really hoping that, you know, people are tired of living this way, and I get it, but I think that if we can minimize really morbidity and mortality related to respiratory diseases in general, then that would be the way to go. Well, is this just going to be a case of like a year from now, we'll see another spike, could be a new variant or whatever, and we'll like throw onto masks again, but go go that our merry way. Like I'm curiously, do you have

any eye on the trajectory here? Yeah? No, one's a really great question. And there was one estimate that came out just like last week that essentially indicated that perhaps two percent of Americans have now been infected with COVID at least. I assume that numbers under reported right, then we have a proportion of the population that has been vascinated. So with those two numbers kind of combined together, I think we're getting to the point where there's not going

to be as many susceptible individuals to severe disease. And that's what I think we can live with, right And so I I really don't know. I know there will be a new variant simply because we have not vascinated the world yet. Right in other parts of the world, less than five percent of populations are vaccinated, and so

we will continue to deal with this. I think the bigger question is when does it become less severe for individuals here in the United States, And when do people really become more comfortable, I would say, and that will also go hand in hand when there will be a vaccine for kiddos under the age of five, because, as you know, parents have just really struggled how to protect their children. Right him is one of those parents waiting.

So I have two children under the age of twelve, and I can't tell you we were just waiting and waiting for the eu A right for that age rage. So it's I think it'll be a game changer. But again, I think it's just something that a lot of people are struggling trying to figure out what they're comfortable with with regards to risk, right, and Hey, what's the data that you need to see for you to say, Okay,

now we have left the pandemic stage. It's gone endemic. Yes, Um, So part of it will have to do with just the amount of transmission happening at the community level, right, we want to see it drop to a specific level. Once it drops under that level and we start to see, hopefully with at UM, subsequently we will start to see a decrease in hospitalizations as well, right, and any sort of severe COVID, that's when I think we will start

to feel a little bit more comfortable. And as I said, with the warmer months coming up, this is really a nice time. I don't know if you all remember last summer was actually like really nice for most people. A lot of people in excavated. We kind of felt like we were going back, right, we were returning a little bit mac But yeah, I mean I'm hoping that this we were in a very different space than we were last year. Right, we have we have way more tools.

I think it's just being able to follow the evidence which we have seen that obviously this is a politicized issue. Another problem you gotta ask. You just got about a minute or under a minute left. We've got a Bloomberg opinion piece that's out there about mr Anti micobial resistance or infections that don't respond to drugs. Our headline on the story this opinion piece the world's next big health emergency. It's here. It's about resistance to a lot of drugs.

Do you guys talk about that? We talked about it all the time, Okay? Um, And this will really has to do with this issue of sort of over prescribing of antibiotics, right, which has led to this In addition to that, but then as you know, virus has changed in the utade and then in addition to that, we're starting to see essentially more pathogens than we did even

twenty years ago. Right, So, I think the environments has changed with regards to just, um, how many essentially pathogens are floating around, but also just the over use, unfortunately of antibiotics. And I do think it's going to be a huge challenge coming up here as our next major global health challenge to I'm not ready to I'm not ready for the next major global health challenge. I'm still

dealing with the current major Happy Thursday. Everybody, Um, we probably we really appreciate it and love of the insight you give us, even when it's a bummer Rupoli LeMay. She's director of Behavioral and Implantmentation Science at the International Vaccine Access Center that's over at Johns Hopkins Bloomberg School

of Public Health. You know it. It's supported by Michael lar Bloomberg founder, Bloomberg LP and Bloomberg Philanthropies could claim ten million lives annually by Mr Happy Friday, I mean happy you wish it was Friday and then ah under the covers. You're listening to Bloomberg Radio. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So check your pantry or your spy Strawer, you know you have a bunch of McCormick

spices there. But did you know about the company's big move into the hot sauce space. We know because we actually read a great Yeah. I didn't know until I read this story today. It's a fantastic one. It's by Austin Carr, technology reporter for Bloomberg News. Joel Weber, editor at Bloomberg business Week, joins us now along with Austin Carr.

Austin's on the phone from Boston, Joel on the access line from Brooklyn, Joel Austin, Um, Joel, how much how much hot sauce went into the production of this piece? Oh man, Uh, I'm gonna I'm gonna guess Gallan's although I don't I can't give you a real number. You're not joking, by the way, because this is not because there are a lot of Photo Photo company's Austin story. Is this fountain that we made? Uh In the photographer pumped a bunch of hot sauce through it. It was

kind of a disastrous experiment. Um, And I wouldn't recommend that anybody ever feel a fountain full of hot sauce unless you really want to make a gigantic mess that leaves permanent stains. But the story that Austin did to a company that photo was a legendary one. Um. You definitely know McCormick because they make all the spices, the red Cat spices that are probably in your spice road right now. But as Austin found out, they found growth

in another area, right Austin, where'd they go? Well, they've gone deep into beyond seasonings, into the sauce game, specifically with Hot sauce Um. You probably know McCormick as as Joel said, from their Red Cap seasonings, paprika, cinnamon and so forth. But they also owned Frenches, Mustard, Stubbs, Barbecue Sauce Old. But they and then more recently they've really been diving deep into the five billion dollar worldwide hot sale hot sauce market with the purchase of Frank's Red

Haunt and Cholula Hot sauce Um. And it's this booming market and the story is about how they're sort of going after the taking on Tabasco and some of the biggest names in hot sauce UH, to sort of transform from this you know, old world spice maker into a sauce giant. And is it working, I mean in terms of getting notoriety, getting shelf space, juicing the bottom and top lines. It's they just reported earnings this morning, which for record uh they beat the street uh for and

for their year end earnings. And you know, while the market's been been roughed. They they're actually near an all

time high right now at seven percent, nearly seven percent today. UM. So they were actually soaring throughout the pandemic partly because people were running to stock their their kitchens, their pantries, not just with all types of seasonings and spices, but with sauces because you have so many grub hub deliveries home cooked meals, and people are looking to spice these hub and that's why we've seen the global hot sauce market grow about fifty since UM and in the US,

the specif sically it's actually on par right now with ketchup sales. Wow. I mean we use so much more hot sauce in my house Cholula. By the way, can I just say that earlier we did a taping with Joel for a weekend show about this story, and I just lost, like Joel and Tim playing off on there. I don't know if the tape was rolling when we when we just started talking about hot sauce. Um, it

was after them, it was after the conversation. Yeah. But I mean, just to fill you guys in, Joel and I kind of grew up with tapatio, which isn't is a competitor to Cholula, which you you dive into in the story a little bit. Austin, get some commentary from one of the family owners that company. Hey, um, how

important is is Hot Sauce to McCormick's future. And I want to I want to try to understand, like how the company changed and adapted during the pandemic, because there's some great detail in your piece about that, the great tumoric shortage of and then and then how does it transition from being known as a spice company or perhaps one that is more focused on on these condiments. Yeah, so let me start on the first first side of

things with the pandemic. Um. You know, this was a puny that at the same time as their their sales were rocketing, they were having trouble with as was every sort of physical good company with keeping up with with manufacturing, um, with with freight, um with a sort of shipments and retail and restaurants business. Um. And how they overcome that

is is just by being as adaptable as possible. I mean they when you noted the tumeric shortage, uh, you know, people were rushing out to buy everything from from powder to America, which which has become a big health food. UM to the stuff that is actually used to America, is used in French is yellow mustard. That's what gives it. It's it's yellow color um, which is sort of radio active and UM. And so they were actually you know,

juggling various sources. UM. They actually chartered a plane with an emergency payload full of tumeric for French is that actually arrived at the wrong airport. They had to have sent trucks overnight to get it to the Frenches factory uh in Missouri on time for a production run. We almost the US actually almost ran out of mustard during that time frame. So so thank god we survived that. UM.

But since then they've really been pivoting. And I'd say just on the earnings called today the big the big word is cholula chilula chaluo because it continues to really boom. I mean, it moved up from the number three Hut Sauce to the number two. They have the number one hot Sauce and Frank's in between the two. Together in the US they own about a third of the market just in the last couple of years. I've laughed quietly to myself about fifteen times since I last spoke in

this conversation. What what's next between them and world dominant condiment dominance Austin. You know, I think it really comes down to making sure they let the brands and products speak from themselves. You know. You know, I think some people thought, oh, when they bought these companies like Frank's Red Hut Chu Lula, would they replaced that those bottles with their traditional red cap seasoning. And what they've done is actually just let these products sell themselves on the shelves.

You might not realize it, but but as as we said, you know, they own all this this arsenal of sauces, and they're going up against Kraft Hinds, which you may not realize also owns Great Poupon a one Miracle Whip Whist sauce from Leon Purren's and you know Lever with with Hellman's and Sir Kensington's and all these big sauce companies are trying to have this arsenal, this sort of alliance of different sauces to sort of corner the market.

Every time you go to to Walmart or Whole Foods, and and you know, so every time you go out to buy something just to recognize that you're all you're not just choosing a flavor, but you're you're sort of choosing an allegiance to one of the big sauce brands. You've got Big Hot Sauce, Big Sauce. Uh, there's also Big Mayo, Big catch Up. Who's the biggest of them all? Mayonne is surprisingly worldwide, is the biggest um you know.

I've gone into the story thinking catch Up would would would beat them by leaps and bounds, But actually, uh, Mayo is about eleven billion dollar market. Uh, catch Ups about seven billion worldwide, Hut Sauce about five, and then Mustard is actually in the last place among that set with about two billion dollars. But but Big Mayo remains the biggest player out there. And I think that's just because so many, so much stuff mixes that I love

to mix Cholula and Mayo. It's it's an excellent combination. Uh. I really appreciate how much research you probably put in on yourself on your own time. So I gotta ask Austin to close this out. Would you rather have a Hot Sauce Mountain or the Dakar machine that I know you have from your last recording, I would say, put your hands together, Joel, I I want to both. I want a spicy Uh. Okay, all right, there we go. Alright, good stuff, Austin, Austin, great stuff. This was such a

great piece. It really was a lot of fun. Austin car He's technology reporter at Bloomberg News on the phone from Boston. Catch his story. It's in the new issue Bloomber business Week magazine. It's on newsstands on the Bloombergin at Bloomberg dot com. Uh slash business Week in our thanks to Joe Weber, editor Bloomberg business Week on the

access line from Brooklyn. Catch more on the whole issue of Bloomber business Week that's coming up in our weekend show you and catch at eight am Saturday on Bloomberg Radio. Also pick up this issue of Bloomberg Business Week. Uh. The photo of the fondue fountain full of what appears to be some mixture of concoction of Frank's red hot based on of the sposity that I can see, is absolutely worth it alone. And Austin's stories just fantastic. Coming

to a wedding near you. Just do this, alright, You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. He definitely on our radar today is Tesla. We've seen the stock under pressure once again. Let me just pull it up on the Bloomberg and it's down about almost eleven percent here. This is after the company pushed back introductions of new

models to next year. A lot going on. Meanwhile, we do have Elon Musk laying out what he says maybe the most important product that the company is working on, and it's probably not what you're thinking. So let's get to it with Bloomberg News Technology reporter Dana Hall. She is on the phone in San Francisco. Hey Dana, nice to have you here with Tim and myself. Um, what's

up with Ellen? So? Elon Musk was on the shareholder call yesterday and he had promised that he would give this updated product roadmap, so investors, customers, analysts, journalists, we were all expecting to hear cyber truck, semi truck, roadster, the future car, and in a nutshell, he basically said they're not making any of those vehicles this year, and that the most important products that they're working on is a humanoid robot that he unveiled um a couple of

months ago, um, which is fine, but I mean I think you're seeing the stock really kind of sell off today as a reasult. I mean it's down almost eleven UM. I mean, I think the concern is that, you know, TESSELA makes cars. People want to hear about the cars that are coming. Big competitors like Ford and Rivian are out with their trucks, and the cyber truck is the next vehicle in the in the Tessel lineup, so we

were hoping to hear a little bit more. I think, like I think a lot of investors were hoping to hear more about the cyber truck. But basically it's off the table. So you know, I think you're just having a bit of a reckoning today. Was that the white person the person in the like white right, It wasn't even a road, It was like a person dress like

a robot dancing on stage. Remembered it correctly, Yeah, yeah, okay, more on cars and just those you're watching on YouTube right now are so they can see as a person that in like a white Leodard definitely not a robot, Dana, What is the point of this humanoid robot in terms of what it can do and what it can do for Testla's business. If this is the most important product in development, what is it? Well, it musk. I mean, basically,

it's gonna it's gonna come for your job. I mean Tesla's factory, particularly the one here in Fremont, employees over ten thousand people, and a lot of people have jobs like material handler, whether they're literally like moving parts from one side of the factory to the other. I mean,

it's still a very human, labor intensive job. And I think what he said on the calling yesterday was that, you know, the first place that they'll use this robot is in Tesla's facility, so you could see these you know robots, you know, moving packages, delivering things across the factory,

moving parts, um. And that all sounds very fine and very futuristic, but you know, a big part of Tesla's growth has always been premised on this idea that they were going to compete in every segment of the vehicle market market. Now, what they're basically saying is, well, there's no point in making the cybertruck because we're still building with all the supply chain issues and we have all

these parts problems. So we're just going to focus on the Model three and the Model Y and this robot and you know, we're going to continue to work on these vehicles, but they're not coming out anytime soon. And so, you know, I think that's just worris. I mean, the cyber truck was first unveiled over two years ago, and uh, you know, I think people were thinking that they'd at least see a couple of them maybe by the end

of this year. Well as don is this you know, Ellen being Elan, and he does it really well in terms of you know, if you've got questions over here, don't worry about it for now. But here's the other, you know, shiny new thing that I want you to focus on. And this is gonna be the real growth engine going forward. Like is that what we're doing or is this just een? Like? Yeah, I mean, I don't know.

There's a point where he talked about the Tesla card we all didn't believe him, and look where we are today. So I guess I don't know how you understand this company, you understand how are we supposed to think about this robot. Is this a real thing? Well? I think that. I think that what Musk does does he he he brings up products. I mean he introduces products before they really exist, and he's done this over and over again with you know,

the solar roof. I mean, now the solar roof is out there, but I mean when he first unveiled it, it was like just a concept, didn't and so, but what you're seeing is that for a company that is an automaker, like when you unveil you know, the cybersruck. I mean, the semi truck was first unveiled in twenty seventeen, I believe, so that's like five years and that we we have yet to see that vehicle in any high numbers.

So I think maybe people are just getting a little tired of it, um, I mean unveiling these products that never really come to market. That said, I mean, does Tessa have a division that's working on this robot. Absolutely, but it's like yeah, like now we're focusing on the robot and not the vehicles. I do think that people appreciate Musk's transparency. I mean he's frank in that he like, yeah, we're not going to make any other cars this year.

But that's not what people wanted to hear. I mean, and you can see it in the share price, right, you can really see it. It's taking a beating. Yeah, they're they're about to they're on paste to wipe out like a hundred billion of their valuation in a single day. Yeah, it's uh, you know, at it's you know, if you look back on where Elon Musk actually sold Tesla shares late last year, it turned out to be a good time.

It's having it's at the lowest level since October four of last year, Dannis, So, so help us make the connection to you know, what's going on with the share price, because it still is a company that's valued at over eight hundred billion dollars despite the fact that it sells the and look, I know it's all based on future uh. And that's what I've told on Twitter every time I try to talk about this, you are too even too

more of an extent um. But to help us reconcile why there is such a sky evaluation for the company, h well there, I mean, you know, to be fair to Tesla, they are still seen as being in the pole position in terms of the brand that consumers most associate with electric vehicles. They had fairly I mean their their actual earnings report was strong. I mean they have really strong growth margins, record profit. Uh, they've paid down

a lot of their debt. But you know, the earnings call itself is really this opportunity for Musk to talk about what's coming, and the fact that he talked about humanoid robot and not a vehicle just I think concerned a lot of people. Brian Johnson and Barclays put it really good in his note today. He was like talking product pipeline must pivoted from future vehicles rotexta humanoid robots. Concerned about the lack of a physical product pipeline. Well said, Okay,

gotta run, Danna, thank you so much. Denni Hall, Bloomberg News technology reporter on the phone in San Francisco. This is Bloomberg Radio. Yeah, but you let me drive. No, no, no home please, I want to drive. It's a good question to drive. This is the drive to the clothes. Let's get to it. Just got about tennis left in today's trading session and it is time for the drive to the closed. I'm exhausted area. It's been a it's been a busy weekend. It has been a really busy week.

Busy week for traders too. Yeah, right, and FED meeting and all that good stuff. Let's say what Hillary Kramer has to say, President and Chief investment Officer at Angie Campitell Research. She's on the phone in New York City. Um, we always like to talk names with you, but it is a week where it is also smart to talk macro, especially coming off of that FED meeting. How has what we got from the FED UH and f O m

C Hillary chained at all? You're thinking about strategy for this year when it comes to the financial markets, Carol offense been still way too accommodative. We really didn't hear anything from Powell. It was a matter of fact, many of us found it somewhat of a confusing speak from both of the mouth kind of speech. We're looking at a one point six trillion dollar budget um, that budget for the three fiscal year, and that's without there being

a COVID, without there being an Afghanistan. All of this is very serious. Are buying just just a discretionary budget alone? So ordinarily, you know, I count with my names, and I'm excited, and it's all about making money. But I am a macro investor and I am looking at the macro and that's why right now we're very just were very very careful with what we're buying. You know, we're really looking for the right places to go in. There's still a lot of fluff in that market. You know,

Testa did okay, but you know they're down. They have to they have to. You know, there's a lot of a lot of high stock price that has to be worked off there. Uh. You know Netflix has come back, and that's in its own world, Rightflix. Netflix has its own is phone deal. But let's talk Hillary about some of these names, because you know, I want to make

sure that we get these in um there there. I think a lot of people would agree with you that there is a lot of fluff out there and that you know, some of that fluff has been or that oxygen has been removed in recent days, in recent weeks. Peloton, though you call Peloton a steel right now, it's trading blow typo price down another three percent today. Why is it a steal? Because of acquisitions, money is still cheap.

Someone could still come in and pick up Peloton, even if it's just for for the name alone right as they say you're fifteen minutes of fame. I mean this is a cheap stock. Now it's going to get cheaper and get there's still there's still might be some value there. I mean that being said, of course, so are you saying it's so you're saying it's an acquisition target or what it would be an acquisition target? It would be an acquisition target. Management team has been beat up, they're tired.

They would get let's talk tired the people, you know, I think that should be the theme of the day is tired, How tired? So many people are really right now and uh and and have written so high and then have have come so low. So that's why we're looking at the end game for a lot of companies. You know, there are very few companies like GM, for example. Like we like GM for its fundamentals. We think that

GM can have a chance. It's down twenty percent year to date, it's still a strong um you know, well liked company, and or Otto is doing well, and Escalades and gmc s and I know what you're thinking. The price of gases, you know, just horrendous through the roof. But we're looking for companies like that. There aren't many. We don't want to be buying companies simply because Peloton could could get scooped up by someone once it gets cheap enough, because it's a dangerous game to play. Uh

you know how cheap does it have to get? Did anyone ever? You would not? I would, it would, but not unless you're doing what we do, which is we're sitting you know, we're looking at uh you know, we're looking at the technicals when it comes to that, you know, how how many shares seem to be accumulated? What's the right timing there? Uh? What we really have its basically a liquidity event thing that you're you're betting on that

they're going to do that, something's gonna happen. Tell me about the robin Hood because they're going to report after the closing bell. We're going to be all over. This stock is just decimated. It's been an amazing first year right as a publicly held company, roughly not even a full first year, right because it was late summer that

they went public. You say robin Hood is dead money, You wouldn't touch it, wouldn't wouldn't go near it, No way, not when you have too many discount brokerage firms that UM took the best of what robin Hood had to offer and made sure to integrate it into their own into their own business models, whether it be Schwab or a Merry Trade or e Trade, UM even in Vanguard

for example. So UM and then plus let's let's keep in mind what robin Hood told us all, which is that there's a that the deal flow is sold and uh and too many people have lost too much money. Uh. And then of course, or even though I'm a big advocate of UM, of all, I'm a big big advocate of crypto, but more for when it's going to be on exchanges, when it will be so you like coin, then yes, yes, so I so I do like that. But I think everyone needs to be mindful and realize

that we're we're going into a time period. You know, you know things are bad when stocks like Hormel start to go up. You know when everyone suddenly uh you know, wants to own this is bad? Or is it bad? Is to be fair, Hilary, is it? Is it bad? Or is it just a little bit of rotation, recalibration and away from some of those names that you just couldn't do anything but share and higher. So as we kind of recalibrate what economic growth and earnings growth, which

we will have, but it will be different. And so you play around with those names that have been left behind. It's not so much recalibration as so many of the individual investors have been knocked out of the game, knocked out. And then you have the big hedge funds which have liquidated, right they've they've sold into rallies. Okay, so that you have you have the combination of those two and that's been you know, it's been pulling the market down. So we all have to be mindful. Look, we've got to

keep our eye enterprised. And that's going to be Apple tonight. You know. We we have to see big numbers in hardware. We're going to have to see that the market is still embracing and loving Apple. But but there's a lot of concerns. So and I think the other the other point. I always talk specifics, but it's just quickly, yeah, go ahead, yeah, yeah, very very quickly Apple. I ordered. I ordered an iPhone thirteen Promax in November. Was supposed to be here within

four weeks. Instead, I get text messages. Are you enjoying it? Are you enjoying and enjoying it? I searched the house, they searched them. They start where. Then at the end of the day, guess what I call Apple? Oh no, you never got it. You want her and your money. Those kinds of trips. All right, I'm gonna say that We've got a new laptop in our house, and I've got new earbuds. So I think maybe it's like we're all contributing to Apple's most recent court exactly. Hey, Hillary,

we've got to run. Hillary Kramer, she's president and chief investment officer at a G capital Resource on the phone in New York City. 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.