Markets, Oil, And Green Hydrogen

read that every day? Paul? The Daybreak News like yeah. Um. They feature different charts in macro views, and one that I saw was going back twenty years. Whenever we go into a rate rising cycle, you start to see the yield curve go down or tighten so um for example, the spreads between spread between twos and the tens just starts to tighten up and maybe even at some points invert. Every single rate increase cycle that we've had over the

last twenty years. Now, that maybe is bad news for the economy because of what it signals, and because of the fact that we're already looking at a yield curve that's going down as the fed um is expected to raise. For some people saying now five times this year what does that mean. Let's go to Jay Hatfield right now. He's the CEO uh Infrastructure Capital Advisors. They have a number of funds under management, but he has a long career on the street as well as uh NBAS from

Wharton and U. C. Davis. He worked at S A. C. Capital. He was a principal and investmentking at Morgan Stanley. Incredible really, c v J. So I appreciate you spending some time with us. What do you think about the economy now? It looks like, uh, we're trending down in some ways at a time when the FED is about to tighten. Well, first of all, Matta and Paul, thanks for having me on your show again. We think the critical judgment is

whether the FED is going to overtighten. The data is that in the nineteen I'm sorry, of the nineteen tightenings, eleven have ended up in recessions and eight in a mid cycle soft landing. So that's the critical issue. And I think the minutes really disturbed the market because there was a lot of discussion about quantitative tightening, which is

a disaster. But we're more optimistic to the market because we don't think they've focused on the fact that Biden will have that pointed five out of the seven f o MC members soon when they get approved. But that doesn't mean that the market won't weaken you know, obviously weakened from here is a critical area, and I would note as well. Alright, so, Jay, I guess the issue

for this Federal Reserve. It seems to me, and I'm just a novice here, that the signaling the communications been very good, Yet the market, as you noted, has maybe even thought about the Fed might go even further than what they've signaled. How do you think this Federal Reserve will proceed from here? Well, I think that what you could see, which would be the bowl case, is that they go and correct a little bit of this what

we believe is a misconception about the minutes. Keep in mind when the minutes say certain participants, but we don't know who those people are. They could just be the regional FED governors which tend to be more hawkish. So there could be a correction in the communication. Because we do believe, like you're one of your prior guests, that

financial conditions have tightened. Mortgage rates are at basis points higher than they were prior to the capitulation on transitory so it's possible that Powell tries to soften the message and maybe take quantitative tightening off the table, which is horrendous for the market because liquidity is what really drives the market, not interest rates. So if there's more reduction in liquidity, then you know, we think there could be a crash and Bitcoin and some of these other momentum

type investments. That's a great point. I was just reading a couple of days ago Muhammad al Arian's column where he asked, um, when FED tightening is going to hit financial conditions or why it isn't now, And one of the reasons that he stated is it's really about the liquidity and not about the flow. Um, what what do you think about the levels here you mentioned and the

market just started. I guess it's been kind of in a downward trend today, um since the open, and then it bounced off of basically forty nine and is now coming back up pretty dramatically. Well. Yes, the other easy rule is to be long during earning season, at least

when the economy is strong. So typically we've had a few misses, obviously Netflix being the poster child, but normally earnings are good and the companies retained their their best releases for actual earnings call, so they're they're good news. So usually it pays to be long. Journey are in season, so it makes sense it's bouncing. But if we violate the two hunter day, then usually there's a lot of hedging activity that occurs, so it's a risky level in

the market. What's your favorite sector here that you and your team are working on right now. We really prefer um are focused on preferred stocks. We think that not just value, Like there's been some discussions that even you know, value stocks are revived, so we always if we're thinking about value, we always want to get paid to weight and have income. So preferred stocks were not that bullish

about the market this year. They have high dividend yields and low volatility like today most preferred funds are sort of flatished down like twenty basis points, so you get high income and low volatility. But we definitely think this year is going to be adult swim. So if you buy stocks, don't just buy value, but also by income, so you get paid to wait, so even if the market is down, your income is still stable. All right, Jay,

Thanks so much for joining us. Really appreciate getting your thoughts. They're like getting paid to weight. That's a good feeling. I think Jay Halfield, CEO, founder and portfolio manager of Infrastructure Capital Advisors here, all right, let's talk energy. I got w T I crew eighty five bucks of barrel. Where is this thing going? I mean, if I'm gonna fill up mats, you know, four D f one fifty,

it's going to cost a pretty penny. Regina Mayor, she is a principal Global sector head for Energy for KPMG, and she was a former officer in the U. S. Army Reserve, which is very cool. We appreciator service their Regina. Where is oil going here? I mean, I've got some demand picking up. I have OPEC saying pretty disciplined. Is this going higher? Well, it's really all over the map, and the predictions are starting to indicate that it will

go higher. We think triple digit prices are in range because we see more upward price pressures versus the onward price pressures. UH supply is constrained. I think OPEC plus is not necessarily being disciplined. I really think they're at near or at capacity that we don't have a global safety valve. Yeah, yeah, I think that's partly why they're appearing to be so disciplined. Is the word on the

street is they can't make any morggling. It's it's by the way OPEC go on the terminal, you know, of course, a great function and you can see that what Regina is saying is spot on correct. I mean there are very few members of OPEC that have any spare capacity. There's a graph in the lower left corner is very cool that shows you, UM, So it's interesting to me the demand side Regina is telling in terms of the

global economy. Everyone's worried about um, the yield curve coming down and you know, oh Macron plus tightening of the FED. But if if the market's willing to bet so big on oil, it's got to say something about global growth, right.

I think that's fair. I mean there's pent up consumer demand for consumable goods for travel, and a lot of those consumable goods have components that all come from hydro carbons and from a barrel of crude, and with supply constrained and demand expected to increase, that's why you're starting to see triple digits potentially come into the frame. And then you add into that the inflationary pressures, increasing cost

of capital some of the geopolitical hotspots. It all leads to potential upward momentum for oil price, at least in the near term. Regina, how about our good friends in Texas and Oklahoma, the shale patch folks. I kind of expected them to not be as disciplined as they have been. I expected them when they saw seventy start, you know, putting some holes in the ground. I think you're right,

it's definitely coming um. And also our friends to the north, like Canadian rig count and one week went up fifty rigs. The US is up thirteen week over week. We are in the range where it will spur marginal production, and that expectation is that US, Canada and Brazil will start to help fill the gap. We've seen so many headlines about the popularity of e vs, especially in Europe. The growth in sales is that making a dent at all

in demand? No, no, not yet. It's so marginal. It's such a it's such a blip in terms of overall fuel consumption that it cannot yet make a dent in liquid fuels demand. How about Russia, just real quickly, what should we expect from Russia in terms of their discipline? Well, how are they going to disappear? They're at capacity to um. You know, they may say other things, but what we're hearing is they would pump more if they could. All right, Regina,

thank you so much for joining us. We always appreciate getting your perspective on these global energy markets. Again, w T I crew to oil eight five bucks empower. Whenever I see that, I just expect those wildcatters down in Texas and Oklahoma and it started drilling. But they've been pretty disciplined to date. Regina mayor Use, a principal Global sector head of Energy at KPMG, giving us the thoughts here again raising the specter that we're gonna get you know,

triple digit oil. It's been a long time since we've seen that. But you've got rising demand on a reopening global economy, and then to date you've had this supply pretty well fixed by OPEC, OPEC plus and even by the U S producers. So there you go. It's a commodity supply demand. All right. Let's talk supply chain. We talked about that a lot. It's an issue for so many companies, really on a global scale, And I think

about supply chain concerns. I think about big cargo ships starranded off the coast of l A waiting to get into port. I think about not enough truck drivers to get the stuff out of the ports. But it's also that last mile getting the stuff to your door and questions, you know, when can technology do? How can technology help this whole process? Pain Hunter, he's a CEO and board member of get Swift. Pain thanks so much for joining

us here. Tell us just a little bit about what debts swift does and how you kind of work with the supply chain. Good morning Matt and Paul. Thanks thanks for having me on. So get Swift we operate in about seventy countries across almost seventy verticals, so different different industries. And what we do is we provide assess softwares and service um automation for last mail delivery, including a workforce

automation in a series of other kind activity services. So you could say that we touch everything from your local mom and pop store at the corner all the way to large multinationals. Now, what I have to do point out is what we don't do is we don't actually provide drivers. So what we do is effectively partner with the companies and the service providers to automate everything. We have technology. So how hectic had the last two years

been for you? Um? Think of it this way? I would put it by saying that two years have equated to probably ten to fifteen years in normal times. Everything kind of got hyper compressed, to put it mildly, And I'm not what was it? What was it like? I mean, talk to us about March um of was it just all of a sudden business is going bananas? It's more than going bananas. Really, what you had is I think

you had to breakdown what I call organizational inertia. Right any time you would try to talk about how the market is changing, consumer behavior was changing, you would invariably encounter resist. It's not in organizations, but some all of a sudden, literally in a period of a few months, um consumer behavior didn't just expect they demanded it. And for a lot of our customers and a lot of I would say businesses out there, the realization was a

very simple real station. Either you evolved and change and you provide the service, or you're going to go by the way of the dinosaur, and it was really something to behold. I haven't seen anything like it probably since the days of the you know, the dot com one, you know, everybody started going onto the what do you call world what web bin? You know, we as we think about the supply chain challenges here and again it's a global issue. Does this call into question the whole

concept of just in time inventory? Yes, it does. And I think there's a very important lesson in all this, you know, and I'm going to use in an analogy, and the analogy is that, you know, the lack of pain does not mean that there's not a fundamentally something wrong underneath it. You know, you're still have some form of disease. So what really the pandemic in the last two years have done is they have stress tested the system.

And what has come out as a result of that is that first of all, one, it's not unified to um it's it's really not being managed effectively from like call it a risk horizon aspect of it. And the third aspect that I would also point out, it's disjointed. Technology is really not unified. There's not visibility in the full supply chet system. And that's exactly what we're seeing right now, both in terms of you know, what we see on the shelves and in terms of the cost

of goods going up. What is the future bane of your industry? I mean, is there a blockchain involved somehow? Um? Is there drastic change coming up? Yeah? I would say you would have to kind of you know, segmented a bit. The first one is workforce management, right, Um, there has to be fundamentally a change in terms of the way you know, we are evaluating and we're managing the workforce

in terms of the supply chain. The second is I'm a huge believer in automation, and I'm a huge believer in emerging technologies, whether there be green I know, you guys were talking about hydrogen, you know, and e V vehicles and what have you not. I think that is a very important component. But together with that, I think the other component is going to be a I uh and or machine learning in other words, what portion of

what we do can be automated? And then the last component is, uh, you know, let's call the future modeling. What does technology to tell you what the upcoming needs for the supply chain aren't. And then how do you manage that to the full life cycle, whether it's farm to table, whether it's managing something from overseas or dealing with you know, your basic obstacles that you have, wants, you're good to land at the port. All right, very cool stuff. I find it fascinating. Paul and I have

been talking supply chain. Yeah, a lot about the supply chain, obviously everyone has over the last two years, which is why it's so great to get some time with you. Bin, thanks so much for joining us. Baint Hunter is the CEO of get Swift, the ticker g S. W Andy Marsh joins us. He's the ce of Plug Power and this is a company that is innovative in terms of alternative energy sources, specifically hydrogen and fuel cell technology, and

he thanks so much for joining us. Um it has been an amazing time for your company and for alternative fuel sources. But you know, you know a lot of people here hydrogen fuel cell and they think, isn't that you know? And also ran, isn't that done? Didn't batteries win? What do you say? Well, I would step back and say, you know, we've been Plug has been doing this for twenty five years. UH, we have fifty tho UITs out

there were the largest user of liquid hydrogen. And I think when you step back and you look at Walmart distribution centers, in those distribution centers and around the country, the food that got on people's table were in COVID somewhere along the line touched the plug power product. And you can't say the same for listening batteries. When is though,

you know? UM I started out as a cover reporter in and Frankfurt and around that time BMW had these hydrogen fuel cell seven series running around Germany, UH, and they said, you know, in giant letters, hydrogen fuel cell on the side, and I thought, man, that's got to be the future. They're not doing that now, though, how

come we don't see it coming to you know, consumer vehicles. Well, I think we're you're going first hydrogen, you know plugs, learning that hydrogen really has its greatest value in commercial activities. And we have a joint venture with Renault you Inferrance, for which is the second largest battery electric vehicle commercial vehicle company in Europe, and we're putting on the road this year three fuel cell power vehicles UH for moving

goods for moving people at airports. And by the year we expect to have about a hundred thousand of these vehicles on the road. The developments happening, the technology is there, and PLUGS been deeply involved in all of it. So andy hell supportive is US policy to date for hydrogen fuel and hydrogen use? Is there some things need to

change or is it pretty accommodative supportive? You know, one of the advantages I've seen in the United States that PLUGS worked closely with people like Senator Schumer for twenty years in setting the setting the policy in place in the US for fuel fell tax credits. You know, at the moment we're building the largest green hydrogen network across the country. We have one in Alabama, New York, one in California, one in Georgia. And with those hydrogen plants.

You know, if you look at the what was in the Build Back Better Bill, and I think you saw have been seeing that the climate provisions are still strongly supported by Senator Mansion, who has been deeply involved in writing the green hydrogen aspect of that bill. With that built passes, the US will have the leading policy in the world of support the deployment of green hydrogen. And no company is going to be in a better position than Plug because quite honestly, we're building it now and greener.

I imagine you know there are I guess, different kinds of hydrogen when you look at the production right, Um, is there a greener way to do it? A better way to make hydrogen? So? Plug absolutely, and that's why we're building the first nationwide network and even in Europe we're doing activities today. Maybe take a look at the plant we're building in Alabama, New York. It uses hydro electric power. If you look at the plant we're building in Texas, it uses wind power. It's a feed stock

with plug power electrolyzers to create the hydrogen. And in California, the facilities running off solar power couple with plug power electrolyzers. That's the way to do it. I was over at cop and even when you talk to utilities, they know ultimately the hydrogen needed for the world needs to be green, and that really gives PLUG a differential advantage. So, and I'm looking at your stock, it's off on a trailing twelve month basis. About what's the market concerned about with

your company? Well, I think that when you you know, take a look first, I want to take a step back and say, when you start thinking about a world where the world's going to be renewable high hydrogen that look, there's ups and down, there's issues with the FEDS, but long term, this company has an incredibly strong balance sheet that can execute on its business plan. With the balance sheet it has today, we ended the year with over

four and a half billion dollars in the bank. I think, uh, you know, we're feeling some of the impacts of the down downward spiral in the market. We believe it's going to recover soon, and we believe that, uh, you know, as many analysts. I had an update call him update call on Tuesday, and the analysts, you know, thirteen analysts came up and said said, plug Power as the stock you one I owned in this space. And that I think is because we've been doing it so long. People

know we're not an overnight success. We know how to make fuel cells, we know how to generate hydrogen, we know how to put vehicles on the road. Yeah, I'm looking at the in our function met on the Bloomberg terminal twenty buys five holds in one cell. So still Street pretty supportive here of this story. But is there a path to profitability? Andy? Oh? Absolutely, you You're you're going to see late that the company will be profitable.

All right, We appreciate it. Andy, thanks so much for taking the time to get on the phone with us. Andy Marcy's the CEO of Plug Power. It's a publicly traded company symbol p l u G. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three. Put on fall Sweeney. I'm on Twitter at pt Sweeney

Before the podcast. You can always catch us worldwide at Bloomberg Radio.