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On Today's Bloomberg Intelligence Show, we dig inside the big business story is impacting Wall Street and the global markets.
Each and every week we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.
Today, we'll look at why US Vacation has planned to increase travel spending in twenty twenty five.
Plus, we'll break down my Micron Technologies revenue forecast missed analyst projections.
First, we begin with earnings from the biopharmaceutical company Pfiser.
This week, viser forecasted twenty twenty five sales and earnings in line with analyst projections.
It's a step towards offering relief to weary investors that feel the drugmaker is being mismanaged.
For more, we are joined by Zam Fazelli, Bloomberg Intelligence, Director of Research for Global Industries and Senior Pharmaceuticals, and we first asked Sam about Pfizer's guidance for investors.
Look, this is the story about a company that didn't disappoint. I think, having seen what happened during twenty twenty four, this is the company that people were a bit worried about. You know, is it going to come out and give us a whole bunch of guidance that is actually below consensus? And here we are with something that's in line with consensus pretty much mostly. There are some moving parts that's you know, to think about it if you want to get into the nitty gritty, but at the end of
the day, it's pretty much in line with consensus. And that's a sigh of relief for a stock that's pretty much close to I don't know if it's an all time lobe, because this company has been around for a long long, long time. But it certainly is a very weak share price compared to where it's been before, especially in the heights of the pandemic with COVID sales and everybody think it's going to be one hundred billion dollar market a year. So U that's where we are.
Speaking of vaccines for a second. We were watching the Patrick Stewart Scrooge movie. We like to do Christmas movies, and my daughter goes, when was this set like in the eighties? Right, so to the point we're like, no, honey, like it was, it was a long time ago, and we will I'll be dead at this point if we learnt that time. Okay, But I guess my question is, how do we have conviction on what these docks are
going to do next year? We have no idea what the administration is going to be like or what their relationship with drug companies is going to be.
Like, Yeah, but Alex, you know the government can't change things overnight, right, so by the time they take off is by the time they start putting new laws into play, which, of course one of them is possibly going to be some way of trying to rain in the PBMs. The pharmacy benefit managers, the middlemen who take the big fat chunk of a profit out of these high drug prices. By the time that happens, it will be twenty twenty six or something like that. The reality is that it's
all going to be about rhetoric. Right, So are we going to have a health and human services run by RFK anti vaccine? Is you're going to tone down his anti vaccine? Is he going to get confirmed? So it's going to be all about the optic optics of it, and it's also all about the rhetoric no real impact. But investors don't look at what's happening next year. They always look at two or three years down the road. Now here we have a company and that's dealing with IRA.
I think it's the first farmer company has put out their guidance and they're saying that the changes in the IRA, which are good for patients. By the way, I have to say that right up front, is going to hit them about one to one and a half billion dollars. I think the number or a billion dollars, so one and a half percent hit right. So that's because they're going to be having to cover the catastrophic.
Pay that.
In terms of the part the medicare coverage, and of course they've got drugs that are high priced, so that sort of thing I do expect. And of course, you know, sentiment is all in our world, so it just tells you where we are in some of these names.
One of the great new functions on the Bloomberg terminals MODL for financial models, and this is where Bloomberg Intelligence and Bloomberg have compiled a lot of the earning estimate models from a lot of the leading Wall Street and analysts. And what you see there is for a company like Pfiser, they got a lot of drugs, and investors really focus on the various drugs and how they're growing. What do you focus on for Pfizer, Sam.
Yeah, Sozer's twenty twenty five is about execution and getting this new company that they bought Sea Gun. It's now that new anymore. It's a while ago they bought it fully integrated, and managing those if you think about it, a lot of what they've said today with regards to the growth on the EPs line is due to managing costs. So they've come below some Wall Street expectations in terms of sales and marketing costs and you know with within even R and D costs. So but that's been the case.
This is a company that's trying to find its new world, in the new world of COVID. How much vaccine am I going to sell? How much black Slovia that I'm going to say? I remember, that's a nine billion dollar line or so, right, that's not a you know for a company that's guiding into six sixty one to sixty whatever the number is here, sixty one sixty four billion
dollars sales range. So that's where there is. There was a lot of sensitivity here and worry and of course they've said, I think we're on a straight line from last year to twenty twenty four to twenty twenty five, so that's where they worry was. And frankly, new drugs and stuff. It's always important, but we need City Day to come through.
Our Thanks to Sam Fazzelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceutical scentalists, we.
Move next to commercial real estate. This week, we focus on a story titled office real Estate is facing a year of reckoning in twenty twenty five.
You can find the story on Bloomberg dot Com and The Terminal. It discusses how commercial real estate is bracing for losses in twenty twenty five as lenders run out of patients and borrowers struggle to refinance loans for more.
We were joining by Patrick Clark, Bloomberg real estate reporter. We first asked him why commercial real estate may suffer next year.
These things take time. It's like a slow grind down, just in the way that post GFC. You know, the delinquencies in default really didn't spike until or didn't peak untill twenty twelve. It takes time for the stuff to work its way through the system. Everyone's running out of patients a bit like on the lender side, you know, the extensions no longer come free, and they might not
come at all at this point. So part of it is that I think the one thing that's changed is a year ago people might have expected we were going to get six or seven rate cuts this year, and now that's you know those Not only the does not happen, but we don't expect them next year later. So you can no longer sit there hoping and expecting that interest rates are going to save you. So you kind of got to make a decision.
So how does this come about? Is it in terms of, oh, my goodness, the equity folks have to write down the value of the building. That only or usually happens when I've got a loan coming due and I've got to renegotiate it, and then I've got to get a determination of the value the building or the lender will put evaluation of the building. Is that typically the precipitating factor.
Yeah, I think it's you know, it's the maturity wall. As you're you know, it comes time you have to pay off that there's a big Almost all these loans have big balloon payments at the end of them, and you got to pay them off. That means you've got to get a new loan. And the new loans have not really been available, and we're certainly not available at pricing that would be tolerable. And so that's where that's
where the negotiations come in. And I think the again, the way those negotiations have played out over the last eighteen months have been the can down the road, extend and pretend, or sometimes the cleaned up version of that is amend and pretend, which means you actually have to
put something in to get the extension. But again, it's like the extensions are a little they become harder and harder to get over time, particularly as this hope that there's going to be an event which makes all the problems go away and dissipates.
When is the maturity wall sort of coming up? And I appreciate it's probably property by property and who takes.
The hit the maturity wall is you know, it's permeable, right, things pass through it. They in some ways, you know, there's there. The one thing that happens when you extend loans is that you add them to next year's maturity wall, and so the more the more loans don't pay off.
And I saw stat I don't think we got into the story, but something like, you know, it's only like a quarter of Central Business District office buildings that are financed in the CNBS market have paid off at maturity over the last three or four So it's like a lot of them are pushing out. They're pushing out, and that just makes the maturity wall go higher. Now they
can continue to be pushed out until they can't. And we don't know exactly when that moment will hit or with what force or with with what volume?
Right, a sprinkle of companies are coming sing we're getting people back five days a week. And I wonder if that's being perceived by the commercial real estate market is all right, maybe the worst is behind us in terms of vacancies and that kind of thing. Is there any any discussion of real estate business that maybe just the business fundamentals have bottomed.
I think yeah, sure, yes, and I but in some ways I think that is more of a catalyst for resolution of these situations. It's sort of like, we know what it is now. It's not great. It's it's great if you own one Vanderbilt or you know, a brand new high tech office building seven thirty one les. But you know if you own commodity office and in you know, in the garment district or something, and that's you know what it is now, and it's not great.
Right.
I'm just wondering, is it big banks that have a lot of these loans? Is it small guys, Like where do we see the ripples?
Well?
I think that one of the things that I think we've seen happen is that the bigger banks that are in you know, better situations across their business have been able to and have been reserving at a you know, at a faster at a higher rate. So they are you know, they've been quicker to acknowledge the issues and to prepare themselves to ultimately realize losses, whereas smaller banks
we've seen much less of that. You know, we're starting to see smaller regional banks modify loans at a greater pace, which again I think we see as like they're pretending less.
They're still they're extending and pretending less.
No, no, well they're pretending less anyway, like they're acknowledging. Yes, okay, like more stuff is still yet to happen. We can't just push these things out. We have to get ourselves in position. But nobody wants this all to happen at once, right, I mean, it's in everyone's interests for these problems to be realized, you know, gradually and at a pace where they can kind of be controlled our Thanks to Patrick Clark, Bloomberg Real Estate.
Reporter, coming up, we're going to dig deeper into a retirement crunch that's haunting Americans nearing sixty years old.
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We move next to the travel and leisure sector. According to a Bloomberg Intelligence survey, US vacationers plan to increase travel spending in twenty twenty five from last year.
And for more on this research, we were joined by Jody Lourie, Bloomberg Intelligence Credit Analysts.
We first asked Jody to walk us through some of these findings from her survey.
I have to say, as a credit analyst, and I've mentioned this a few times on your show, we get uncomfortable with the amount of optimism, and we got on. I was uncomfortable personally because we did our credit outlook and it was a bit too optimistic for my liking. That said the data doesn't lie. And when we surveyed vacationers, seventy two percent said that they're willing to spend more
in twenty five versus twenty four. Now you compare that to last year, where it was only sixty seven percent said they were planning to spend more in twenty four over twenty three. So it's a pretty big bumb.
Where are they spending? How are they spending?
Sure, so, Paul, I mean, I think if you think of the average person, going on vacation is.
A big thing.
We zeroed in on people who are planning vacation as a priority for next year, and for those people, they are actually saying seventy nine per center saying that they're spending more on travel overclothing, and that was compared to seventy percent last year. Now, where they're going is also interesting because we saw a big spike in vacationers who are planning on going on cruises that's thirty seven percent,
as well as on all inclusive vacations. And we did see a pullback in theme parks, We saw a pullback in casinos and race tracks, and so what we're seeing is a lot of I guess set in and forget it type vacations, vacations where people can do these big, luxurious things, and also in hot places like the Caribbean, Italy or Mexico.
Oh, that's interesting. And also then in terms of budget, like you said, set it and forget it, like you get the budget, it's done, like you know exactly how much you're gonna pay, you don't have to think about it. That's quite interesting. Is there what's taken a hit like you mentioned, maybe where they're not spending money as much?
Right so, I think what we're a little bit concerned about, Alex and we've been expressing this for quite a few months now, is in theme parks. You know, theme parks had a very good run in twenty twenty two, and the question is are they going to see that same run in twenty and twenty five, And so far the data is saying no. It's it's a little bit hard to say, but I would suspect that a lot of people are getting sticker shop for the destination theme parks
and then the regional theme parks. Of course, you know we had the big merger between six Flags and Cedar Fair. We of course have United Parks formerly SeaWorld, and I don't know if people aren't necessarily either counting that as a vacation because their one day trip, or if they're choosing instead of doing these one day trips to do these big lavish vacations and that's where their budget is going.
That's interesting.
How about Europe because you know, you hear stories about how Europe was just overrun by American tourists over the last several years, and after September is my Europe. That's our new thing. So we do in Europe in September last year, we did Ireland. This year, I think we're going to do Italy. Confirming that to tomorrow with Kelly with Hawaii talk to us about Europe Americans still going to Europe because I mean, I get the euroed almost parody.
Oh yeah, Paul, you are going to be one of many people going to Italy next year. It seems we had a big bump from last year, so people who are going to Italy. Last year was only about eighteen percent and now it's twenty five percent of our vacationers. So that's pretty big spike. Now putting it into context, Italy isn't quite back to where it was pre pandemic in terms of vacationers or travelers into Italy, but they
are getting there. What we are seeing is, you know, Mexico, the Caribbean, it's it's very, very high, and it's going to get higher. Places like Italy, Portugal, Spain, those are going to do very well next year too. Whether or not we get back to pre pandemic levels for some of those countries remains to be seen. But you might
see that you're a little bit crowded. Paul, and perhaps the government of those countries they've been talking about limiting cruise lines, for example, in terms of docking and so interesting. You know, it might be a little bit harder to get there. You might have to be a little bit more creative.
Going to September. Yeah, he's going in September. He doesn't have kids like he's septembery.
You'll be fine.
I'm the one with the problem. I'm planning a Scotland trip in July. That's going to be something. So yeah, okay, yeah, So let's talk about individual companies. So your credit analyst, which kind of companies are going to win from this.
We're suspecting that Royal Caribbean and Carnival in particular, are going to do quite well from this. You could also say a Viking would do well because the smaller vessel cruise ships are going to be able to access these
small islands and you know in the Mediterranean. But companies that that also could potentially do well, we think is something like a Marriott or a Hyatt in terms of you know, publicly traded companies, I should say, and the reason being is, you know, Hyatt, for example, they bought Apple Leisure in twenty twenty one and that gave them a bigger footprint into Mexico, into the Caribbean. These companies folk have been focusing a lot of their dollars on
the Caribbean. But also something interesting is Marriott announced an acquisition of a company that focuses on wilderness and sort of these natural cabin type places. So really really getting a big kind of mix of things competition with I guess you could say the Airbnb or the outpost airbnbs.
And we are seeing that a lot of people are preferring domestic vacations next year, you know, it's spiking to ninety eight percent or planning or going on domestic vacation versus ninety six I believe it was last year, and international is staying flat at about seventy eight percent, so people are looking domestic. We might see more national park spending or national park visits than we saw, and Marriotte's taking advantage of that.
Our thanks to Jody Lorie Bloomberg Intelligence Credit Analysts.
We move next to a Bloomberg Big Take story we focused on this week, titled need to Grind Retirement crunch haunts Americans nearing sixty. You can find it on Bloomberg dot Com and The Terminal.
The story looks at how Generation X face's significant financial stress as they approach retirement age, with many feeling they won't be able to afford to retire comfortably.
For more, we are joined by one of the story's authors, Suzanne Woolley, Bloomberg Personal Finance reporter. We first asked Suzanne to break down what she found in her reporting.
Yeah, there's a lot of stress about it because, you know, as the oldest exers become sixty, I mean they were
sort of the guinea pigs for four one k's. The boomers had pensions, you know, and the four one k on top of that, and now the exers are sort of looking at their balances and looking at the news about maybe Social Security having to be reformed within the next decade, and looking at the money that they're spending supporting their adult children and possibly also their parents aging parents, and it's just leading to a lot of concern about how the heck are you going to be able to
retire in comfort anytime soon?
Right?
So, I was struck by it, was it forty three percent say they can't afford to retire at sixty five. That is staggering.
It is staggering, you know. It's it's just a combination of a lot of things. I mean, housing affordability has been an issue, you know, the high cost of living is an issue. These are sort of the peak earning years for a lot of exers, and they're hit with the pandemic, which a lot of them say was a big blow to their savings, you know, and then just
the cost of groceries, the cost of housing. Everything has been going up and up and up, and it's harder to save and it's harder to see, you know, how you eke more out of an already stretched budget to put away more for retirement.
So is the expectation that since we're living longer, we're just going to have to work longer.
I think that's part of it, yes, because exers are obviously going to live longer.
You know.
The truth is really that a lot of people, at least boomers, have a lot of challenges when they retire. You know, they feel sort of rootless. So in a way, maybe it's not so bad if we can work longer. There's this epidemic of loneliness in America. It gives people a sense of purpose. But the fact is, you want to have the option to retire when you want to, or.
To work differently. Right, so maybe you're working part time, or maybe you're working at a job that you work maybe eight hours a day versus like fourteen hours, you know, like it's a different kind of environment and pace. Like Paul wants to be a Walmart greeter in his third career. Like I'm not entirely kidding about that, but we don't support that part.
No, no, I mean, but that is, you know, that is sort of the reality. You know, in your later years, you may not want to grind away at the same job you've been doing for you know, the past couple of decades, but you might do consulting in your area, or you know, at least you'll make some money later in life. It's not just like you'll turn the switch a sixty two or sixty five and then all income
coming into you is over. But I mean social security makes people a lot of nervous because that's something it's sort of the one thing in our so we can sort of depend on, and something's going to have to happen.
What is it?
What is the feeling in with your reporting here about social Security? I mean, do we I'm not.
Yeah, it's not good. It's not good, Paul. People are really not feeling that social Security is gonna be there for them in the way they need it, and you know, unsurprisingly they place a lot of flame on that in politicians.
I mean, I'm gen X and I'm assuming I'm not getting Social Security. If I do, that's super like benefit go me. But that would be like extra stuff. So like, my whole life is revolved around how do I put my money in a way that will make me money later in some kind of tax free way, because that I've seen with my parents how difficult it is to pay taxes when you don't have any income. Except for like attentionional or social Security.
Yes, and for most people, you know, eighty five percent of the social Security benefits are taxed, which is bananas exactly. Yeah, that's my personal fing Yes, yeah, I like that formal assessment the bananas.
Yeah. So what what's a solution?
I mean, there are a lot of ways you can sort of, I mean, obviously you can. If you're over fifty, you can contribute more to your four one K. You can contribute next to seventy five hundred dollars a year if you have it this this coming year. There are ways to you know, increase your savings. They're you know, side hustles. It's really hard to come up with an answer to that question because it's different for every person.
You know, what they can do. I guess just like smarter savings and making sure you're doing everything you can to optimize your tax advantage savings if your four one K and maybe I mean roths are something I think younger people should really look into.
Our thanks to Susanne Willie Bloomberg Personal finance reporter.
Coming up, we're going to break down some of the challenges that could be faced by President ELEC. Donald Trump's nominee for Treasury Secretary.
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We move next to the semiconductor company Micron Technology.
This week, the largest US maker of computer memory chips, game a revenue forecast that missed Anamal's projections by about one billion dollars.
The company was hurt by sluggish demand for smartphones and personal computers. So for more, we were joined by Jake Silverman, Bloomberg Intelligence semiconductor analyst.
We first asked Jake for his take on Micron's earnings results.
Yeah, it seems like there might be a trough in fiscal two q which is next quarter. It will kind of depend there was an inventory build up, so it kind of depends on how fast those tories deplete. Because while demand isn't particularly strong, it might be kind of weak. It is somewhat stable for the most part, So in terms of unit demand, when we think about end markets, smartphones doing a little bit better, PCs definitely doing a
little bit weaker. But you know, on the other hand, as we think about the second half of the calendar year, we might see seasonal demand pick up. We might also see some content expansion opportunities for Micron. When we think about AI smartphones and aipcs, we're not exactly sure what the demand will look like yet there is you know, we do believe that there will be some uplift from that.
So as Micron is a company that does have an AI, angle doesn't have what would like to develop one, how do you guys think that has the stree think.
Actually, if you look at their data center revenue, a lot of that is coming from AI right now. So they have a number of different products that are actually benefiting from AI. I think the one talked about the most is high bandwidth memory, but that's still very nascent. We think it's only going to be about ten or so percent of sales, maybe a little bit more now after the recent guidance for next year, so it's pretty early. It's growing off of a low base. But you take
a look at some of the other products. They also have high capacity dims with your DRAM modules that go into servers. They have lpdd R five similar style product, and then they have data center SSDs, which a slightly different story. We're seeing a little bit of a demand moderation right now, so things are maybe cooling off, but could re energize.
Later in the year. So that's what I'm wondering. Do you feel like the stock reaction then is overdone based on their AI of potential.
It's I think right now. It's just expectations were pretty high. A lot of it was based on AI. I don't think there was a particularly strong expectation for traditional markets. But at the same time, the weakness in those markets was more pronounced than expected, and so you're starting to see.
The sell off.
High band with memory really hasn't quite inflected yet, so we're not really seeing those results when I was seeing that in their results yet.
How much of this is a sector issue PCs no handsets versus a Micron issue, because I like this story and it's like back in the day when I was actually running some money there, I'd be like, I take a look at this name here in this pullback Today?
Yeah, look, I mean again, I think it'll come down to how much traditional demand sort of re emerges in the second half of the how much seasonality really exists. I think there are a few catalysts to re energize that, one of those being PC refresh cycle. There's also been a push towards a more premium tier mix of smartphones, people upgrading say from just the iPhone fifteen to the iPhone sixteen pro.
Or iPhone twelve. But whatever, that's not me, not me, I'm not that actually.
Six I do ever iPhone twelve, so.
I can throw shade. Where does this is a supremely silly question, but where does Microns sit in the AI world? Like their customers are who they get product from? Whom?
Yeah, so some of their customers, including video. They now have three high band memory customers. I think one of them is a MD and another one might be Google. Given that they have such high demand for their TPU and that's partially internally, but they also you know, that's for high bandwith memory. But then also some of their other products that I mentioned before, like lpdd R five, their high capacity dims, those are being sold into AI
servers as well. But then you know, you have to keep in mind that some of that revenue, in fact, the majority of that revenue right now, is coming from the traditional compute side, if you think about servers that are based on the Intel and AMD CPUs.
All right, thanks to Jake Silverman, Bloomberg Intelligence Semiconductor analyst.
We turned now to a Bloomberg Big Takes story we focused on this week, titled Debt Risk that Lord Bessant to US Treasury now Loo Large.
You can find it on Bloomberg dot com and the terminal, and the story looks at Scott Bessont, President elect Donald Trump's nominee for Treasury Secretary.
The story focuses on how Bessont faces the challenge of reducing the US federal deficit, which is projected to exceed six percent of GDP in twenty twenty five.
For more, we were joined by one of the stories authors, Victoria dend Renew Bloomberg US Treasury reporter.
We first asked Victoria to break down some of the findings from her story.
What we were trying to show is that the dead outlook, you know, a lot of experts ad looks quite challenging. And Scott Vesant, if and when not confirmed as Treasury Secretary, is going to have to deal with the challenges that the outlook poses while also trying to execute the Trump administration's economic vision. And he himself has spoken about the fiscal outlook in the past. He said he wants to bring the deficit down to three percent, essentially halving it.
So we basically take a look at how possible that is, how budget and markets experts think, how likely that is based on, like you said, the drivers of the deficit, like for instance, interest cost has become a key driver, particularly in the year that just passed. So it's you know, all of the experts were most of the ones we spoke to talk about quite how halfing it to three percent will be quite quite tricky.
So the US government's debt load, to put a nice round number on it, is now over twenty eight trillion dollars. I don't know, it seems like a big number to me. Is there political willpower on either side of the Aisle of Victoria. Have you learned to address this at all?
Well, it's tricky because you know the new administration, they're going to have to face this issue quite early on. Obviously, the tax cuts that expire at the end of next year are going to be a very big part of the debate, and Donald Trump and his administration has said they want to extend those. That's obviously. That obviously means that a source of revenue is not going to be
there if the tax cuts are extended. They do think that that's going to boost the economy in a way that's going to reduce the deficits, So that could help. But it's hard to know. I mean, there are fiscal hawks in Congress right now. You know, the Republicans. They control the House, So on the one hand, it could it could be that they it's easier for them to
pass legislation, but it is a very thin minority majority. Sorry, So it could mean that actually congressional deal making when it comes to the fiscal issues is going to be much harder than it looks.
And not only is it twenty eight trillion, that's up from seventeen trillion, or less at the end of twenty nineteen, and as a share of GDP debts on a trajectory to exceed even World War II levels. The idea is that you get these blowouts when you have a war because you need to fund it. We're not at war in the same kind of way, and that's part of the issue. Talk to me about issuance. We've seen Janet
Yelle and Treasury Secretary issue a lot on bills. Do we think Scott Bessen is going to do more on the long end or going to stay on the bill side.
Well, that is a great question, and that's when a lot of market participants are going to be looking to get hints or answers to I think when we talk about, you know, the US debtload and issuance, I don't think anyone is saying that the US is not going to be able to find buyers for instead. But as we saw last fall when heels were up, it could get a bit more expensive for the US to borrow. So that is a consideration because it weighs so much on
you know, the overall spending of the government. In terms of Scott bessin we don't have too many clues yet as to how he would proceed with issuance, But what we know is that he was critical of the current treasuries and of Janet Yellen's treasuries strategy to issue more on the shorter end of the curve, which was, you know, at a time when heels were very high. So I think part of that strategy was to you know, essentially
whether the higher interests at the time. So if we're going by what Scott Besson has said or other people in the kind of Trump economic orbit, we could see a shift and focus to longer treasuries. But it's always different experts, sellers when secretaries actually become secretaries and they deal with kind of a more holistic view of how issuance works and the feedback they get from markets as well, which is very critical to this.
Our Thanks to Victoria Dendrinu Bloomberg US Treasury Reporter, we move next to m and A. The impact of US elections reverberated across sectors and geographies with respect to M and A in November, and a.
Crucial catalyst for much of the deal making globally is future tariffs. This is according to research from Bloomberg Intelligence.
And for more on this, we were joined by Andrew Silverman, Bloomberg Intelligence Senior policy analyst.
We first asked Andrew what his expectations are for M and A in twenty twenty five.
So it's actually really interesting. For the past year, we've seen basically the same pattern. Month after month. We've had tech companies being acquired. That's sort of like the leading target tech companies. Then we have financial companies, and then in normally in the third place, we see traditional energy companies. Right,
But in November we saw this really interesting development. We saw a lot of We saw a big spike in basic materials companies being acquired, and we also saw this increase in telecom companies being acquired, and we saw an increase in media companies obviously earlier in December. And I think that that companies are positioning themselves after they saw what happened in the election and trying to proactively protect themselves for what might come in a Trump presidency.
Do we think that these will be transformative monster deals we talk in like small Bolton's.
Oh yeah, these are big deals like one.
OK.
For example, it's an eight point seven billion dollar deal for end Link. Now that's a traditional energy deal. It's sort of it's interesting companies are coming up with with different sorts of conclusions about what's going to happen in Trump presidency. We see these sort of traditional energy companies still doing these big acquisitions. But then Blackrock did an acquisition of HPS Company, and and that company is a
big credit investor in clean energy. So obviously they think that either the Republicans aren't going to be as hard on clean energy companies as people might think, or maybe
even there they're going to be good for clean energy companies. Obviously, you know, if he puts tariffs on on on you know, foreign investment in the United States, then you know, clean energy is a place where we might say a lot of it because a lot of the the batteries and a lot of the solar cells and the even the minerals that we use in our and our batteries are coming from China. So if what's a sixty percent tarif on China, not so great for a clean.
And yeah, another reason to maybe get some deals done now before the tariff's kind of money up the situation. Perhaps, I remember Paul Talbot, one of the leading M and A bankers on Wall Street formerly Morgan Stanley. Now is he has his own firm. He's out there saying they're hiring investment bankers now in anticipation of deal activity really picking up. One of the areas I think should be
better is just the regulatory environment. It seems every time over the last three, four or five years that we saw a deal announced big deals, the Federal Trade Commission would have her problem, the Department of Justice would have her problem. Now, I think the expectation is that's going to ease up a little bit. Is that what you're hearing out there.
Well, certainly with Lena Congan, I think that's the single most important factor because.
She's head of the FTC right exactly, very tough on on consolate.
Yeah.
Actually, Jen Rey and I have done some research on this, and we think that that the perception is that it's going to be a much better environment for M and A. But not so fast because there's also that strong populist stream to the Trump administration. In fact, you know, his Vice President jd. Vance is a big fan of sort of some of these progressive pieces of legislation that are trying to make you know, that's some P five hundred
companies taxable when they do the organization. So it's possible that even though people are very sort of optimistic about what the environment is going to be without not only in a con for example, it may not be as spectacular as they think, all right.
Thanks to Andrew Silverman, Bloomberg Intelligence Senior Policy Analysts.
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