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Well, day one the government shutdown, Day one of the fourth quarter.
As well, and it's been an interesting one.
How long is it going to happen? How long is it going to go on?
I think it's a big question, right and I think the duration of this shutdown, you know, that is going to be a big deal in terms of the impact we will certainly see. And I think we're all waiting and watching because the concerns have been whether or not we start to see workers being cut as the President has said he would do.
Yeah, the President well rather, White House Judge Director Russell Vote is planning to swiftly dismiss federal workers, with layoffs to happen within two days imminent very soon. According to White House Press Secretary Caroline Levitt, We're going to continue to bring you the latest from Washington, DC, and that includes checking in with Nathan Dean. He's Bloomberg Intelligence senior
policy analysts. He joins us from the nation's capital. Nathan, you were I don't remember how optimistic you were yesterday. To be honest, I have to be honest with you. I feel like you were optimistic in the early part of the day, and then in the later part of the day you got less and less optimistic. And certainly what ended up happening was the government did shut down. Is there any is the daylight decreasing between Republicans and Democrats right now.
At the leadership level.
Look, they're both in the pasture right now where they're trying to blame the other. And yesterday it was two forty one when I told my first client that I thought it was going to shut down. But I still feel that it's a little optimistic to say that we think that this shutdown is going to end probably within
ten days. Now polymarket has it eleven point five days, So that's the general can you know consensus out there, But we did see the first time today some bipartisan senators, not at the leadership level, but at the working level. I would call it gag on the Senate floor to potentially talk about a short term CR combined with maybe some type of effort on Obamacare subsidies. Now they left for today, they're out for Yamkapor. They won't come back
until Friday. I think that you're going to see more political rhetoric take place on Friday, and you're not going to see serious negotiations till over the weekend, because I remember the House Republicans are still aren't here.
They come back next week.
But all that has to happen and keep the government open is five Democrats need to go and support this. Because yesterday's vote three Democrats or two Democrats and an independent that caucuses with the Democrats ended up voting for this. So Senator Schumer only has a few more days until I think the pressure for more Democrats will be to go and say we're going to reopen the government.
You mentioned CR. Of course that's a continuing resolution. Nathan. What I'm wondering is are the democrats?
I mean, what are people saying or what do you think as you watch the government whether it would have been democrats or Republicans. Are democrats in this case in this instance kind of right to put their foot down on an issue that's very important to their voters or their constituents in terms of healthcare. And if they don't put their foot down and they say, all right, let's not shut down the government, let it go, you guys
say you'll talk to us. Are they silly in not kind of getting a deal or you know beforehand, you know, getting some kind of commitment. So an issue that they say is very important to their American voters. And let's remember go back to the election. You know, half voted for the president are a little bit more than half, right if you look at the popular vote, and the other half did not.
You know, shutdowns occur when both parties think that it's politically advantageous for to shut down to occur. And I think that's the situation we're still in. There's a lot of folks that blame Republicans for this. There are a lot of folks that blame Democrats for this. But from the democratics perspective, there were two goals I think going
into the shutdown. One was for Senator Schumer to rally the troops to be seen fighting President Trump, and the second was to bring attention to the issue of the Obamacare subsidies that expire at the end of the year. Now, Senator thun has said that there's going to be no negotiation on Obamacare subsidies, at least resolving that issue while the government is shut down, and I believe him on that.
But the Democrats have achieved their first goal, or will within a few days of being seen as combating President Trump. The challenge for Senator Schumer at this point is what is the exit strategy? How do we get out of this government shutdown? And that's why I think that sometime next week you will see, like in an unofficial agreement, unofficial handshake, if you will, that there will be an
effort to deal with these Obamacare subsidies. Because I think there are some folks in the Republican Party, President Trump included, who recognize that it may not be beneficial in an election year for Obamacare subsidies to go up for average Americans. But let's also remember that the bulk of the Republican Party most likely wants this to go away. So even if there is an agreement that says we're going to kick the candidate till November, these shutdown fights are going
to continue. Probably into the beginning of next year.
He is into the beginning of next year. Does it affect the mid terms? I was talking with some colleagues earlier today, and it seems like voters, like anecdotally, they don't really remember shutdowns.
Now, they don't, especially not this far out from November. I mean, look, it's October first, and we have a year and some change until the midterms. I don't know many people are going to go into the voting booth and say, hey, remember what happened back in October of last year, And remember the Tea Party somewhat did this back in twenty thirteen, and the Republicans ultimately ended up gaining nine seats in the following midterm election of the following year.
But I will say is.
That it's a certainly about momentum. And the Democrats right now have a very poor approval rating, It's around thirty percent. And so from the Democratic perspective, why don't we shut this down? Why don't we rally the troops and rally the progressive support. Let's support our base, and then we'll spend the next year in change actually trying to build some momentum.
So I can see the case for.
Why the Democrats would want to shut the government down because there is plenty of time for them to come back and get messaging onto other issues.
Hey, Nathan, what about you know President jd Vance's downplay plans to use the shutdown to slash services. He says Republicans don't want to lay anybody off, and that Democrats would be held responsible for any negative consequences of the government closure. President Trump has come out, He's been very clear right talking about, you know, the ability or you know, to cut some of the federal government jobs. Russell Vote has certainly we've seen that as well. So are we
expecting that to happen? And if it does happen, you know who is responsible for that.
So I think you're going to see signs of that.
You know, Russell Vote even said just in a House Republican caucus earlier today that layoffs are and I'm paraphrasing your imminent in the next day or two. I think there's some probably some truth behind that. You would also see additional cancelation of projects. The eighteen billion dollars the earmarked for those who in New York City in terms of infrastructure projects, but ultimately it's going to be President
Trump that makes this decision. And I think that President Trump realizes that widespread layoffs of government workers, it's such which a broad nature, is not going to be popular with the American populace. You know, Joe Matthew in Balance of Power has had several Republicans on this week where they've asked President Trump to bring a scalpel to this as opposed to a sledgehammer. So you'll probably see a
notifiaications go out and you'll probably see signs. But as of right now, I still think it's political posturing not so much actually a real layoff threat. But again, time may change, and if this is the if it does happen, I think it actually could push parties further apart and potentially extend the shutdown even long.
Well, we did a deep dive yesterday, as you know, on Russell vote and his role at OMB and the DNA that he brings to this role. Does he take a scalpel when it comes to laying off federal workers?
Not if he gets his wish.
I mean, obviously this goes back to Project twenty twenty five and this idea that where the government is extremely bloated.
And you know, former.
OMB director mcmulvaney was on Balance of Power a couple of weeks ago, and he was jubilant and saying, look this, I'm excited for RUSS vote because you're going to be able to dismantle a lot of apparatus of the government. I'm paraphrasing his works there. But I will say is that it's not easy to do. Both sides will often come to Washington and saying, look, there's bloat.
There are things that we need to cut.
But it's not easy to do so because there are things like regulations and statues and laws. And if you end up cutting folks like we saw what happened with Doge earlier this year, and you break the law, or at least you're breaking regulations, or you're breaking what the American people want.
You to do, you have to end up hiring them back.
Hey, Nathan, really quickly fifteen seconds. I mean, who is President Trump listening to in all of this?
Jd.
Vance was very much out front and center and very much in command earlier today talking about the shutdown. This is RUSS vote. Just got about ten seconds. Who is the president listening to?
Very quickly I think the President is listening to himself, and I think the President's going to make the decision that he wants to make.
All right, kind to leave it there, you rock. Nathan Dean, Bloomberg Intelligence Senior policy analyst jointing US from Washington, DC.
Stay with us more from Bloomberg Business Week Daily coming up this.
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Bahrain has emerged as a key economic and security partner for Washington, hosting several US military assets, including the US Navy's fifth Fleet and the Branch's Central Command. And you might recall over this past summer a meeting at the White House where Bahrain's Crown prints pledged seventeen billion dollars worth of investments in the United States. While our next guest is focusing on bringing investments into Bahrain. Joining us is her Excellency nor Bent al al Kulaif.
She is CEO of the Bahrain.
Economic Development Board and also the Kingdom's Minister of Sustainable Development. She is in our Bloomberg News La Bureau. I'm so delighted, your excellency that we could spend some time with you. Bloomberg has reported a lot about the Middle East at large, how it's transitioning, taking moves to broaden out the region's economy, making investments in sports, tourism, technology, and a lot more.
Tell us about for Bahrain, about attracting investments in the digital and tech world, your mission, who has invested so far, give us some size and scope if you would.
Absolutely. First of all, Carol's exciting to be with you today and looking forward to the conversation as well. So thank you so much for hosting me today. And I always find it very helpful to start with maybe a thirty second elevator pitch about beading. For those that are not familiar with the country. Bahrain is a small island
part of the Golf Corporation Council. As a country, historically it's been a strategic maritime state, so it was always considered as a transit, as a hub, as a gateway to the region and a transit for trade growing east and west. And that's also started because of the perling industry in Bahrain. But fast forward till today, we still readin that role and that really underpins our ethos or our DNA of being business friendly and we need to cut our economy today people think Bahrain it's an oil
exported country. In reality and on the ground, our GDP is eighty five percent non oil. Financial services sector is the largest contributor to our economy, followed by manufacturing. But our other strategic sectors that we focus on our tourism, logistics, technology,
but also we have the education and the healthcare. So you can see that diversification was achieved through attracting investment into the country, being very open and allowing investors to come and take advantage of the region and what's happening, and using Bahrain as their testing ground as their base. So it's been really interesting times, especially with the growth that is happening in the region at the moment.
Well, you're in our Los Angeles Bureau now ostensibly in Los Angeles to help attract investment to the country. Can you talk a little bit about who you're meeting with the type of investment that you're hoping to attract.
It's been a variety actually of companies and sectors that we've had conversations with, and I have to say it's been very, very interesting. We've always in Bahrain admired specifically if the technology sector of the US and having direct conversations with theirs, innovators, with the founders or the people that are really close to not just what's happening at the moment and what consumers have, but really also what
is expected to come going forward. So a lot of discussions about technology and how Batratan can support that, but also we've had discussions on manufacturing. We've had discussions even on the film industry, and we do that. And the way we look at Bahrain and that we were able to talk about those different industries is because when we assess our market in Bahrain, we look at various things. We look at what is the infrastructure that I have at the moment, what are the regulations that I have,
what is the human capital that I have? And how can that serve international companies in various sectors is and what would be beneficial for them to come and take advantage of the business environment.
Is it a difficult thing to do in a world that is increasingly going I don't want to say the world's going America first, but countries are increasingly looking inward. You mentioned the film industry and meetings that you're having out there. Just this week, the President said he's imposing a one hundred percent tariff on foreign made movies. How much more difficult does that make your job trying to attract those folks to Bahrain.
Look, we acknowledge and we see the President Trump is doing in terms of attracting more local investments. And actually, if you look at the region and Betting and the rest of the GCC, we actually mirror that sentiment. A lot of the countries are trying to bring in investments into the region. But we also believe it's not as
zero sum game. Some companies would need to have presence in both regions, not necessarily just one, in order to achieve the results that they want, even locally here in the US, and we're talking to some of those companies
that need the input. Other companies actually need to be closer by nature to their consumers, and giving the growth in the demand and the growth in the consumer base in the Middle East and specifically the GCC, a lot of the companies would need that presence closer to the consumer. So we're having a lot of conversations with companies about that, but we very much understand what is happening here in the US, and we try to do our best to
support those companies. The first thing we do with companies is ask what are your growth plans, what are your strategies, how can we support you in the region, and what can Barin do for you, Because we honestly believe that their success means our success. So their success in the region means they will stay here for the foreseeable future, which means they've become part of our ecosystem and part of our economic development.
Your excellency, I'm curious to what's the competitive landscape as you buy for investments in capital. I mean, yes, your country versus other Golf nations, they've got similar ambitions we report about all the time.
So what is that competitive landscape like?
First of all, it's absolutely exciting to see all of the countries having their Vision twenty thirties, Virgin twenty fifties, really focusing on economic development, and the region really has complementary economies, certainly for betraying the way we see ourselves and view ourselves. It's economy that complements what is happening in the rest of the region. We very much look at what's happening and we invite companies to come and use Bahrain as a base to test those concepts and
those ideas that they have. Again, it's a small country, you can do our country wide roll out really easily. But also we always look at our competitive advantage. For US, cost competitiveness is really important. We continue to monitor how much it costs not just to set up your business, but also for your moving people internationally, how much does it cost for them to live there, to put their kids in school, to use the health system and Bahrain.
The other thing that we have is connectivity. So speaking of the US, we have a free trade agreement with the US. We have this a seput agreement, but also we have free trade agreements and investment agreements with about thirty percent of the world GDP because as a small country, we have to make sure that companies can reach wider consumer base. But we also what's really important for US is that we work very closely with the private sector.
So the government and the private sector works as one unit in Bahtray and we have that ethos off the team betraying concept. And as I as I said, we always start with what do you need and how can I support you? And we have examples of where we've introduced a new legislation or a new regulation in response
or request by the private sector. And maybe AWS is a great example in that case because they've said, what can you do for us in terms of the regulation, and we said, how about data jurisdiction law where the data hosted and behraanustrated as an embassy, so me as a better I cannot access that data and it actually could only be accessed by a US court request.
You mentioned Amazon, and I'm looking at a report coming from mortor Intelligence talks about some of the big tech companies in Bahrain. Oracle, Amazon, IBM, Microsoft are among them. Here in the US, we've been thinking a lot about immigration with regard to the H one B visa issues that have come up in recent weeks and the confusion here in the US about that, and I think one piece of the conversation that has been lost is certainly the US wants to make sure that it employees or
that companies are paying for it. Sounds like paying for these visas. Is there an opportunity for Bahrain to come in and take some of that talent that could work at a US tech company that would be from outside of the US, and instead work at a US tech company in Bahrain.
As I've said, our human capital for US is really really important. So we not only invest in the human capital in Bahrain, and we have a lot of programs we subsidize training for Bahrains, but it's also very important to US as a country in economy to bring in
international talent. So a few years back, coming out of COVID, as part of our economic recovery plan, we've launched our Golden Residency Program, which allows investors, retirees, entrepreneurs, talent to come in betterin stay for an extend period of time. It's ten years, renewable automatically for them and their families, and that allows a lot of international companies should they
wish to do. That's but also a lot of individuals to move their people into beatying and take advantage of not just the program, but also all of the other business benefits that you get by being in Hey.
One of the things I want to ask, and I know high tech and technology is certainly of interest and I'm just curious when it comes to big AI data centers. I mean, as you would imagine, your excellency, we spend so much time talking about the build out, the investments, the money flowing into anything and everything data. Curious if you guys, if the country and your office are considering backing AI data centers such as what we've seen and cutter that they've done with Blue Owl.
Yeah, absolutely, it's important. I mean it's coming, it's not it's already there. So we've had a WS set up the first hyperscale data center in the Middle East in Beatty in a few years back. And again, as I mentioned, the reason they chose better is because of the regulation, but also the strength of the human capital you mentioned Oracle.
But we also have some regional and local investments for data centers, so we're definitely seeing growth in that region where international companies that wish to use that and take advantage could come and plug and play and take advantage of the data centers already available. But really because of the demand, there's a lot of potential and opportunities for companies that still wish to have data centers in the region to come also and take advantage of that.
So I am curious. You said very optimistic. What's the biggest hurdle obstacle right now in you attracting further investment. What's the thing that's difficult in terms of what you do.
I wouldn't say difficult, but we have to have a lot of conversation to explain the business environment and talk about their characteristics, what makes us different. But it's all very very exciting, So we don't mind that at all.
And I also do think about you know, something that's certainly been front and front of mind for us excuse me, and certainly coming off the UN General Assembly, and you know, watching the turmoil that we've seen in the in the in the region, how important is that to the folks that you're talking with. It's companies, big name companies that
we know other investors in terms of investing. Obviously not every kingdom or area within the Middle East is the same, but you know, the turmoil and certainly the war that we've seen between Israel and Hamas, how much of that the political situation sometimes slows things down.
You absolutely need safety and stability for companies to thrive, for the economy to grow, and for us in Betty and the region as a whole. We've always advocated for a piece, We've always played a part on a regional level, on an international level to advocate for piece and stability,
and we continue to do that. At the same time, the countries are very much focused on their economic strategies, economic plans, and we continue to have conversations with companies and for those that have any doubt, we just say come and talk to us. We will show you, We will explain to you that the current business environment, but we are blessed to have to have a very stable and a safe business environment.
I have one last question too, and I'm just curious when you do have questions with investors, obviously well known companies, big companies. I'm sure folks do their homework, but what is the thing that you think they don't really understand about Bahrain And in terms of the economy and what you guys are doing.
I think how diversified the economy is something probably people do not realize. And given the journey, and we've had a long journey off reform, our journey in reform, in achieving the diversification that we've achieved today with eighty five percent of the economy being not oil, with a large manufacturing sector in nuge for financial services sector and others
as well. It's something people do not realize and what that means is for years and years, for decades, were built knowledge and know how in our people, in our infrastructure, in our regulation and the way we do business and the way we work with the private sector as well. So that's something that I think always surprises people when we talk to them.
Well, we're so glad we could get some time with you. We know we had some technical difficulties earlier, so we really appreciate you sticking around and so that we could have a conversation.
Thank you. Thank you again.
Her excellently nor bent Ali al Kulaife. She is CEO of the Bahrain Economic Development Board, also the Kingdom's Minister of Sustainable Development.
She's joining us from our LA bureau.
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five ys During that listen on Applecarplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.
Wall Street had long feared that President and Trump would follow through with threats to impose aggressive drug pricing policies, eroding the pharmaceutical industry's profitability and depressing share prices. Those fears, though largely laid to rest this week after Pfizer cut a deal with the White House, the company negotiating a three year reprieve on drug import tariffs in exchange for a promise to reduce what it charges Medicaid. Here's why.
As your CEO Albert Borla at the White House yesterday alongside President Trump.
The big winner of this deal clearly will be the American pace.
There is no doubt about it.
They are the ones that will see significant impact in their ability to buy medicines. But I would argue that it is not the only winner. I think who else is a winner here? It is American innovation and American economy.
We're going to have another meeting next week on this.
We have another great company coming in similar kind of numbers, but we're going to show you some one thousand percent drops in prices.
There has never been anything like this in the history of medicine.
That was President Trump you just heard, and Pfizer CEO Albert Borla at the White House yesterday. Pfizer shares surgeon close to seven percent yesterday. They're up more than seven percent today. I just hope my high school math teacher is not listening about one thousand percent drop.
Yeah, because we're not going.
To get into for another day the math mathing there, but it's for another day.
I want to bring in drugstocks overall in the last two days, not just Pfiser up about ten percent in the past two days, the whole group.
Let's bring in Damien Garde. He's Bloomberg News health reporter. He's been very busy. He's taken some time to join us here in the Bloomberg Interactive Brokers studio. Are drug price is going to go down as a result of this.
For the vast majority of Americans. No, I sincerely doubt it. There's no reason to conclude that based on what we learned at least yesterday from Albert Borla in the Oval Office and the promises that Pfizer has made. We can get into the nitty gritty, but I think the main thing the promise to Medicaid. An important caveat there is that that patients on Medicaid, Medicaid already pays the lowest price available in the United States. It is legally obligated
to get that. So the notion that Pfeiser making a commitment to lower that further would change the out of pocket costs for patients, I just don't think there's much there. And furthermore, in terms of Pfiser's business, only about five percent of that business accounts for doing business with medicaid.
That's where business probably too many times. And I think the main thing that should drive the reaction here is that in this announcement, Pfizer, which has a fiduciary duty to maximize its profits and to update shareholders on its guidance, did not update its guidance. The company said this thing that ostensibly means we're going to make less money, at least that's how the president characterized it, but didn't actually say we're going to make less money, which of course
legally they're required to do. I feel like that through line is maybe the lens maybe not cynicism, but the lens of reality that people should look at these announcements.
Look no further than the share price reaction.
I said, yes, sir, I'm like, why is this stock rallying They're going to make less money? I just made no sense everyone's like, well, it's all about the tiiff thing, and I'm like, true, and that is certainly a part of it.
But I'm like, they're going to make less money. How can this be a good thing?
Right? So, I think the relief that you're seeing in the share price reaction is twofold or maybe even threefold one. It alleviates the threat that the Trump administration was really going to come down hard with an aggressive policy that would be on the books, that would really constrain what
drug companies could charge. Instead, we get this voluntary, relatively vague promise from Pfizer that is expected to set a template for the company's peers, Eli, Lilly, Murke, etc. They will probably all have their day at the Oval Office to do a similar kind of dog and pony show. And then furthermore, what's established is that if you make
those promises, you get a reprieve from tariffs. Which is the other kind of overhang for the entire sector, is this fear that the import of medicines from Europe would face levies. Of the President has said one hundred two hundred percent. The notion that if you just go out there and say we're going to follow what the administration wants on drug pricing. We get that alleviation.
DEBI just quickly, just to be fair, I mean, viser come back and said this is going to impact us financially or it's not going to haven't gotten any clarification from the company on this.
They have not. There hasn't been a follow on filing with the SEC kind of making clear that they're restating any guidance. And furthermore, what they've said is that the terms of their agreement with the White House are confidential, so respectfully, we can only conclude what's been said publicly.
Damien, sit tight. We're going to bring in Angie Frank. She's CEO of the private health company calder Rose. The firm does drug discount management. It uses AI as well as communicating with different parties involved in the negotiating process to get consumers the best prices. She joins us from Wisconsin. Angie, I'll ask you the same question that I asked Damien, because you're right in the middle of this drug pricing thing.
Are drug price is going to come down as a result of what we saw at the White House yesterday.
I think what Damian said there's some truth to that. I think at the end of the day, we won't all feel it immediately, but I do think drug prices are going to come down. I think the announcement yesterday is a big change to this system, and it is the first step in what I think will be multiple steps. We're certainly opening up more channels for patients to access their drugs at more affordable prices. And I think the underlying the medicaid price that states currently pay is going
to come down. Based on Pfizer's announcement yesterday.
Well, that's interesting. What would the mechanism for that be, because that's what I found myself wondering even yesterday in the announcement, which granted was lacking key details for obvious reasons, is very new, but why would this kind of set in motion a snowball that would end with patients paying less at the pharmacy count?
Yeah?
Yeah, so I think, you know, if you look at the overall list prices starting to come down to an MFN like number, and that opening yes most favored Nations exactly, and that opening up more channels for patients to access
their drugs at lower rates. I do think the direct model that the website that was also announced yesterday, which opens up a channel for patients to be purchasing directly at lower costs, could really have a ripple effect on the way benefits are offered and how employers and self insured employers start constructing benefit plans that give their employees access to drugs which may bypass other players in the system, the traditional players in the system, middlemen that have been
making money off of off of drug pricing and discounts and rebate models that really didn't benefit patients directly. So I think I think the new channels being opened up and the new price point at Max's most favored nation will over the longer term, have a pretty significant impact.
Nothing confuses me as much as like picking up prescription and q pons and pharmacy benefits. And I don't know, it's just kind of crazy, Damien. The PBMs pharmacy benefit managers, they are being looked at closely like another layer that drives up costs, and so that is certainly part of the narrative here.
So does that potentially.
Remove that in what we heard from the President and the CEO of Pfizer yesterday, But then throw in this trump OURX, Like what role is that play.
That we need to see play out. But I think through the eyes of Pfizer and certainly people in the pharmaceutical industry, there is an optimism and maybe a hope that the agreement announced yesterday, if in fact it's a template for other companies, will shift the White House's attention away from pharmaceutical manufacturers and toward the PBMs and the other middleman that you mentioned. And I think to Angie's point, there is a potential that trump our X, this sort
of direct to patient offering that we've heard about. You know, there are arguments is suggest how popular that might be, How many people who don't have insurance would be willing to pay out of pocket hundreds or even thousands of dollars a year for a medicine.
Is that what trump our X would offer is an insurance like this is not covered by insurance.
It would be a cash pay business. And so we assume that the majority of customers for it would be uninsured or underinsured, because otherwise they could get the drugs much cheaper through their insurance carrier. But the opportunity, and I realize we're getting kind of in weeds here. The opportunity is that if one of those direct offerings were selling instead to employers rather than patients themselves, then they would be truly bypassing the middlemend that exists. This is
sort of the Mark Cuban model that's drugs exactly. So if Trump and you know, I'm using my imagination here there, this is not something anybody's announced. If trump Orex, the website that has not yet launched but has been described, were to expand its aperture to include employers, then we could be talking about legitimate savings for all parties involved and a huge change to the way it's done.
Now, Angie, come on back in here and talk a little bit about the innovation side of things, because Albert Gourla at the White House yesterday said it's not just the American patient that who will be a big winner, but it would also be the American innovation and the American economy. Perhaps there are those out there who might say, okay, well, if companies drug companies aren't able to make as much money from the drugs that they sell, R and D
in this space might suffer. We know it's expensive to run the clinical trials and to do the the R and D. What do you think it means for American innovation when it comes to pharmaceuticals, well.
I think it was great. I agree with Albert on all points. I think it's great for America that we're moving manufacturing and that level of innovation, job creation, et cetera to the US. When you when you simplify the supply chain and the pricing mechanisms for our current you know, drug pricing model. When you simplify that today, there's that we lack so much transparency and how prices are established
and who gets which price. And to your point earlier, Carol, where you mentioned you know, the coupons and the copays and all these things are so confusing. They're confusing by by design. People are making a lot of money off of that confusion and that opacity. When you simplify and I have more transparency, you have less waste in the system, and that waste will feed the top of the funnel.
That will be dollars that can go directly to the top of the innovation funnel and enable manufacturers to continue to work on and innovate more drugs and more medication therapies that help patients with life saving and life changing conditions. So it takes two and a half billion dollars to bring a drug to market, so every dollar of waste compromises our ability to invest in more and more therapies. So I think it's going to have a tremendous impact over the long run.
And you just got about a minute left. I mean, just talk to us about what you do. It's a data engine, it's information you have. It looks like a couple of different constituencies that you work with, But just give us an idea and what that tells you about kind of the drug industry and drug pricing industry what you have been seeing.
Yeah, we really have a technology platform will re ingest you know, large volumes of data. We apply logic and rules around various pricing programs and discounts and rebates, and then we ensure price integrity that the right price is going to the right set of patients and the right for that particular therapy. So we're really driving quite a
bit of price integrity in the system. The constituents that we work with include both pharmaceutical manufacturers and providers, and we really believe fundamentally that ensuring that the providers and the manufacturers can work more closely directly together, benefits Americans, benefits patients, benefits innovative.
Ten seconds, Damien, who we're going to hear from next? What's CEO?
The expectation is that Eli Lilly will be the next company to take the stage. The President has said their name constantly without totally giving it away. But like I said, the expectation also is that all of the major peers will have their day at the OLAL office.
All right, well, we will be watching, listening, reading your reporting. Thank you so much.
Angie Franks. Of course, CEO of calderis joining us from Wisconsin. Damien Gardey, health reporter at Bloomberg News. Here in our Bloomberg Interactive Brokers studio, this is Bloomberg Business Week Daily.
Stay with us. More from Bloomberg Business Week Daily coming up after this.
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Live on YouTube. Stock's hire A bit of a rally underway. We're staying near our highs of the session. On the equity side of things. We've seen yields move back a bit on expectations that yes, indeed, we'll get another FED rate cut later on. This month, we did have some weak private jobs data we're talking about ADP, those numbers coming in definitely below estimate street estimate.
So shedding of thirty two thousand versus estimates of a gain of fifty one thousand.
That's a bit of a reverse.
That's exactly where I want to start with. Alexis Brown, Robert's COO and portfolio manager at Alexis Investment Partners. They've got around one hundred and eighty five million dollars in assets under management. She's back with us from Montgomery, Texas. Alexis, welcome back. I want to start with the labor market and your view on it. Thirty two thousand job shed in private payrolls today, fifty one thousand added was the survey. Is the labor market cracking?
Well?
Hi, First of all, thanks so much for having me back on.
No, I don't think it's necessarily cracking. It is definitely weakening a bit, but we're heading into a different seasonal period once we get through October, so it'll be interesting to see what happens from there. I think the reason why job numbers were being a little bit more looked at today is it because of the government shutdown and the probability that we won't get a job number on Friday.
But I think there's a lot of other factors happening in markets that are going to affect things more than necessarily the job market death.
And we'll have to see what.
This spurs the FED to do, and if this is just a little bit more fuel to the fire for the FED to continue cutting rates.
All right, So let's talk about those factors.
And I guess what I'm always most interested when we talk to somebody who is managing money, big or small, if you will, is what their clients are saying, what investors are saying.
Are they giving you new money to.
Invest or they're saying, let's back off, let's put something in something safer. Are they buying gold, because it seems like everybody's buying gold this year. So give us some color about what you are doing or what your clients want to do with their investments right now.
Yeah. So we're tactical managers, so a lot of our clients and all of our clients really have a lot of trust in us to make the changes necessary in their portfolios and really adapt to changing conditions. So we have seen clients adding new money to portfolios, especially as we've worked through the low's last April and continuing onward.
For example, in our tactical portfolios, we've really changed our equity positions throughout the past year, going from over over lead on in equities slightly getting all the way up to almost ninety percent on a seventy percent benchmark equity portfolio to now being slightly underweted about sixty five percent, and within those having a lot of fluctuations as we've seen markets change, and respecting the fact that we're up four percent in the past month, seven percent in the
past quarter, fifteen percent year to date, and just law of average when we're aiming to do like a ten to twelve percent on that seventy percent benchmark equity exposure. Having that ability to change our equity as well as diversify. We do own gold, in fact, that's our largest position. We're at just under nine percent gold right now in that tactical portfolio.
I want to understand how much upside you see in the S and P five hundred right now or US stocks, I guess more generally, Bank of America out with a note that it says the sentiment indicates that it's hardly euphoric. They essentially have this indicator, it's the cell side indicator. It retracts recommended allocations to US equities among different Wall
Street strategists. It remained flat in September fifty five and a half percent compared to the dot com bubble in two thousand saw cell side equity allocations search above seventy percent, and then in two thousand and seven clearing sixty five percent. So essentially BAA saying there's more room to run? Do you agree?
I would agree. I do think that there is a lot of cash on the sidelines. When you talk about sentiment, that's a really interesting story. We tend to look at the AAII Bull Bear sentiment ratio survey, and while there has been an uptake in bulls, there has actually been even more of an uptake in bears compared to historical averages.
So there is some room to run on that front. Now, we aren't necessarily euphoric at this point, Like I said, we're about it in neutral allocation, just respecting how far we've come so far this year, so we are looking
still to participate in future gains. Heading into this year, we did a Fibonacci retlacement just simply looking at the breakdown in April to the lows and if we were to have an equal move back up, and that got us to about a sixty four hundred to sixty seven hundred range on the S and P. Obviously we're knocking on that sixty seven hundred today, but I did also look at potentially reaching seven thousand and coming back. So I think it'll be interesting to see from here where
we wind up. But there are a lot of reasons to still be positive on the market, but perhaps not quite as strong as we were heading into this year.
All right, So what's your biggest worry in this environment?
One of the things that we talked with when we began our show, and we had a conversation with yes Alan McCartney over at UBS. She actually has alignment partners at UBS, and it was like, the complacency that we're seeing the market is really low, and that doesn't need to be certainly the indicator that tells all, but there is feels like there's a lot of folks thinking that
this momentum will continue. What is the thing, what is the thing that you keep your eye on that says that, well, maybe there is problems like the you know, today's labor data.
So I would think that the main thing that we're looking at right now that gives us a little bit of pause is just valuations being a little bit rich and once again just respecting how far we've already come in such a short time period and just recognizing that perhaps that means that we'll have some room to pull back. And honestly, there's a lot of strong parts to the
market right now, though, as you pointed out, momentum. We are strong believers in momentum and innovation, and it tends to be that if there's a strong Q three which obviously this was a very strong Q three in markets, that that momentum tends to carry forward through Q four. That being said, we are still watching evaluations and the different moving factors, for example, federal reserve policy, seeing how
that affects things going forward. If there is a pullback heading through Q four, we're probably going to be biased to actually buy into that, although more patient than we have been prior to reaching these valuations, but if we run up a lot through Q four. That would probably be our indicator to pull back exposure a little bit.
Hey, one last thing, just got thirty forty seconds here, Alexis, what about that AI trade? How much are your investors saying, yeah, give me exposure or and if so, how do they want that exposure?
Just quickly. We like AI, Like.
I said, big big proponents of innovation. We're not in the business of finding the next Apple and Google. We'd rather go ahead and invest in those strong fortress balance sheet companies. But really the exciting part of AI to us is how it will affect the market in general and all these other companies, say a Walmart, a Caterpillar, that will use AI to boost productivity rather than specifically trying to find that sexy AI play it.
SAP, all right, Going to leave it there.
Hey, good to check in with you, Alexis Brown Robert COO and portfolio manager at Alexis Investment Partners around one hundred and eighty five million dollars in assets under management, joining us once again from Montgomery, Texas.
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