Pfizer May Have the Edge Over Moderna In Vaccine Race

the disease per se, but progress towards a vaccine. Let's bring in some Faconalty, director of research for Bloomberg Intelligence, and Sam. You keep an eye on everything that's out there. You've noticed so that some companies do actually have an edge over others. Tell us what companies we should be

most closely watching these days. Yeah, hi, Bunny. Um, So you know a lot of this analysis and and conclusion is based on early data, and early scientific data has a nasty habit of changing when you get into bigger

trials and test your your product into in multi center trials, etcetera. So, with that caveat, if we look at the the on the effectiveness side, I think FIDER and Beyond Tech seemed to have the age at the minute with regards to both generating antibodies and also this other arm of the immune system that I keep talking about, the cellular immunity,

that seems to be the case at the moment. So um, you know, they beaten Maderna on the similar arm and on the on the antibodies, Astrotennics didn't quiet match up. Although it's not bad, it's just not as good as So that's where we stand today, although there's a whole bunch of other companies that have to still put out data with different technologies, and the ones that I'm particularly looking forward to seeing someone some of the older technologies.

The variety of vaccines that we have today don't use either of the technologies that moderna Fiser and Astrosennocrat using. And also there's one other version of these RNA vaccines that Fighter has got that is being tested by Imperial College and the company in the US called ARC Tourists, amongst others. I'm looking forward seeing from human data for those. Hey, Sam, you've followed this pharmer business and vaccine business for decades.

Help us understand that when and if we get vaccines plural. I'm assuming various entities will come out with various vaccines. Talk to us about how you actually get a vaccine discovery and then into mass production for I'm guessing billions of doses and then the distribution of that. How does

that all work? Yeah, yeah, interesting, Paul. And Actually, vaccines were really not sixty at all until quite a few years ago when we ended up getting some of the newer vaccines like gardensil from like shing gricks from from Glaxo and and exactly two point both of those products have manufacturing bottlenecks in them in that they can't make enough of the stuff to sell. So both collects are and work either under underestimated the demand or it's just

very difficult to manufacture these things. So to that point, there's a lot of steps required. And I think the one person who regularly brought this up was the CEO of some of you, saying, it's not just about discovering a vaccine. You've got to be able to first show that it is safe because you're giving it to a large population of otherwise healthy people who don't have a disease.

And then you've got to get the stuff manufactured, put into a vial, send somewhere in a cold chain often, so you need to keep it cold and maybe sometimes you're frozen. That's a that's an enormous challenge. But I think our government can rise up to it if if people are um, don't politicize this in again, but but it is, it is. It's definitely a hard and tough

mountain to climb. And one question is you know, how much do you give to other countries if anything, even though it would probably be in your interest to give this to the whole world, right, so yeah, yeah, yeah, but let me carry something. We've just added up all the doses that people have said they will be making. And this is only about twelve fifteen companies, so the

other hundred companies or more. I don't have numbers four and and we're at ten billion doses in one and even if you have to take two of those per persons, that's five billion people. Now, it doesn't matter how many doses you give to America. They don't. We don't need more than six seven million dollars in the US, right, So there's enough volume being pledged and being worked on that if all these vaccines work, that's the point, right,

Because they're all different vaccines. Then you have more than enough to vaccinate a lot the majority of people to get to that early immunity if they all worked. So, Sam, I guess the next what are some of the next mile post that you're looking at real real quickly here that you think you're going to kind of come across the tape. Yeah. So I'm looking forward to, as I said earlier, to data from some of these other technologies actually published data. Folks have said that their vaccines worked.

Some Chinese companies have said their vaccines work, but published data that we started to see yesterday with all the who harder we had yesterday. Um, so I'd like to see some of the older vaccines show some you know, just to see how they're doing. And then I'm really looking forward to seeing this new even newer version of our n A vaccines from Imperial College and our tourists and translate by or there's a whole host of companies

who got these class has got some. But I think we're expecting some news from Imperial and our tourists in the next few weeks months. That's what I'm looking forward to. Hey, Sam, thanks so much once again for joining us giving us your thoughts on this whole race for a COVID nineteen vaccine. Santa zelis Director of Research for Bloomberg Intelligence for all of Europe, but more importantly his day job as he's one of those top farmer healthcare analysts based in London.

Let's move over and now to Asia and talk China. China's market, the new jack MA and I p O has bypassed the New York Stock Exchange and has decided to list on the Hong Kong and Shanghai Exchanges. And of course after that the Hong Kong Exchanges and clearing stock surged as much as nine and a half percent. Let's bring in someone who knows a lot about this now, Brendan and hearn is c i O of Crane Shares. Brendan, why did jack MA decide to I p O almost

everywhere bots New York? Well, I think we've seen US listed Chinese companies reissue in Hong Kong as well as on the New Shanghai star Board in order to get a higher valuation. That US China political rhetor CRIC has depressed the US listed companies over the last say two years. So they're going to where they're going to be properly valued by investors. So Brendan gives a sense of this and financial A lot of people here, I think in the States don't have a real good understanding of what

Aunt is. Give us here your your overview of the company. So and and financial makes PayPal look like a rounding error. Uh, you know, it's it's it's mobile payments dominate the e commerce space in China today. Uh, you know, actually finding places that will accept cash or in some cases even credit cards. It's very difficult when you when you visit China because it's all all done mobile and so Aunt's

really been at the forefront. Um. You know, Ali Baba uh now owns about a third of the company and it's hooked in with their e commerce outlets team all and about. But it's it's it's really, it's really gone viral. It's ubiquitous in China today. Two hundred billion dollar valuation on that company. So pretty phenomenal. Brendan, What what do we need to know about China right now? And it's

aspect towards free markets. Seen for a long time that I was trying to embrace free markets more and more, and at a certain point, you know, I think investors turned their back a little bit on China, particularly as it was comping down on on Hong Kong and so on our investors back now, I mean, you can't ignore two hundred billion dollar valuation, you know, I p O s no no. I mean, certainly we've had a you know, the bowls are on parade in Hong Kong right now.

You had Ali Baba relist in November of last year, j D and Nettie's more recently. UM. But you're going to have a number of these companies relist and they're getting higher valuations. One of the rumors we heard I'll share just uh, just you know, Bloomberg Radio has been so great to us over the years. But but there's actually hatter there's rumors that d D is going to go public in Hong Kong. Uh. D D is the

Uber slayer. Uh. You know d D put Uber out of business in China, UM, and there was there's there's talk that they're going to come as well. So you know, you've got two of the biggest tech unicorns globally potentially going public into Hong Kong UM this year. So interesting. Brendon, give us a sense of just overall, how the markets are over there? I mean, you know, China was obviously the beginning of the pandemic and it really bore the brunt of it late last year but early this year.

Yet they've had some much better numbers over the last several months. How's the Chinese I guess just market in general looking over there. So so China's first in, first out, it's it's fifo so so they their worst economic numbers corporate earnings took place in in Q one, and we're seeing definitively a E shaped rebound. Uh. You know, some of this is the strength of the quarantine in China, and this is it's not it's not a China thing, it's it's an Asia thing. Unfortunately, we've seen a number

of pandemics in the last twenty years. If it's stars or H one N one um and when they say don't leave your apartment, it's taken very, very seriously. And I would point to Vietnam uh population of a hundred million under four hundred cases, zero deaths, Taiwan million people under five cases. So it's not a China thing, it's an Asia thing. And that's allowed them to go back to work. What's next four crane share is Brendan, what

are you looking at these days? Well, I think we're seeing you know, you know, we're in a growth geared market and that's globally, it's in emerging markets, it's in China. So so I think one, we're out trying to tell investors that buying broad e M which has a heavy, heavy tilt to value sectors. Uh, you have to piece out these these growth parts of EM and China. Um, I think you know, further afield, we are looking at this new starboard. Uh, this new board on the Shanghai

Stock Exchange. Uh, it's an area where we hope to come to market in in the coming weeks with a US listed ETF. Interesting, So interesting, Brended. So we've seen fiscal stimulus out of the US today, we had a big, big package announced out of the European Union. In China, what's the fiscal stimulus environment there for the Chinese government? So they've taken a very incremental process. The raw numbers showed that China, yes they're stimulating, but so much more

supporting it. They have not pulled the band aid and gone kind of two thousand nine debt driven so so they're doing very targeted measures trying to get credit to private companies, smaller, UH medium and small companies. So so they've been lowering some of some of the lending rates UM, but more targeted, more targeted exposure. I think they realize that they're not going to be immune to the economic consequence of global quarantine. So they're keeping a lot of

dry powder. Where do you think that dry powder will

end up? So I think ultimately if we if we hopefully we we get a Q three rebound here in the United States, I think that you know, as the number largest economy globally, it's very critical UM and I think I think what China is doing is you know, they've not cut interest rates UM and I think I think if if we have a negative outcome in terms of a quarantine social distance measures, you know, China will have to push further stimulus to offset um external weakness.

Hey Brandon, thanks so much for joining us. We always appreciate getting your thoughts on all things Asia, including China. Brendan her In, chief investment officer for Crane Shares based in New York City, And Vonnie, it's interesting to see kind of how you know the the of those Asian

um countries have done very well with containing the virus. Well, we've been talking about the cannabis market really for several years now as it continues to go not just in Canada, but now in the United States as well as a handful of states are more than a handful of states have legalized recreational marijuana. Matt Hawkins managing partner for Entourage Effect Capital. They're based in Dallas, Texas, private equity firm focusing on a number of sectors, including UH the cannabis

business as well. So let's get a sense kind of where things are pre and post pandemic in the cannabis business. UH. Matt, thanks so much for joining us here. Give us a snapshot, if you would, of the cannabis market place kind of pre and post pandemic here. Sure, happy to do so, Thanks for having me. Before the pandemic started, there was a downturn in the in the cannabis markets UH. In general.

It was driven by the public company and more the state operators in the United States that they're listed on the Canadian exchanges that were unable to meet their projections to to UH. A lot of factors of the first and foremost being their inability to convert a large number of the illicit market into the legalized market, so that the projections that they had come out with obviously weren't met. That trickles down, you know, following quarter to anything. It

also trickles down to the private companies as well. So there was a distress a moment in time board for you know, distress buying, and there was also a cash crunch in the industry. What's happened post pandemic is that in all the legalized states, um with the exception of Massachusetts for recreational, the company that cannabis industry was deemed essential.

So all of our dispensaries and and uh and and you know in in production facilities were all all remained open and in fact, sales skyrocket and have continued to do so. And so the pandemic and a you know, in a in an awful irony has helped the industry. And so excuse me, you still have valuations that are low, but you have companies that are in better shape. Are we sure? Go ahead? We'll just on that. Are we seeing deals yet, Matt? And if so, you know, are

they small deals? Medium sized deals? Is this one private equity goes notes well, again a good question that the private equity world and cannabis is small comparatively speaking. We we have no institutional capital in the industry and all of our investors we've been placing money in the industry since two thousand fourteen, we've made almost seventy investments, but all of our investors come from hind it worth individuals

or family offices. We don't have any true institutional quality investors because of the federal legality, and so until that changes, it's going to be small all comparatively speaking. But what's happening now to answer your question about deals getting done, is that the capital markets and cannabis industry have opened up a bit since the pandemic um started. Obviously, at the beginning, even though we were uh deemed essential, there was no deals getting done because money was on the sidelines.

Things are starting to pick up a bit. Anticipated by the fall, we're gonna see a lot of activity both at the private and the scale building deals to where excuse me, in advance of some type of legalization the next several years um. Those are the companies that are going to be in position with scale to attract big institutional capital, and that's when the way we'll really hit So Matt, on the on the credit site, give us a sense of how these companies are financing kind of

their day to day operations. Are banks lending to this sector? Absolutely not. It is a we have the sixties some odd investments we have they all have of making relationships where business services and checking accounts. I mean that that's been a bit of a missnomber in the industry and that there are following federal guidelines to provide services, but

they're not able to lend money. And so that that's what it would have been a disaster to the industry if there was a prolonged putdown because we don't have lines of credit, we don't have huge ballot sheets to the weather rainy day, and so that that intel and intil it becomes federally legal or federally quasi legal through the States Act or the Safe Banking Act. Um, it's going to remain that way, Matt, who are your competitors

in private equity? You know, there's a sense out there that at some point there will be two or three private equity firms that will own up all of the you know, the the cannabis facilities, particularly in states like California and so on. Who should we be looking at? Well, we we we like to say in the in the PE world in cannabis that we don't have any competitors because the industries there's such a dearth of capital that

we all work together. I mean we when we look at deals, we look to see who's in the who's in the capital stack, and we look for people that we've invested with in the past. There's there's very few organized capital groups like us that are in the industry. Um of course that will change. I think what you'll see happening, you know, as we get towards federal legalization,

that the opposite will happen. A lot more griffs will come in and they'll be backed by you know, Wall Street names, and you'll see, uh, you know, a large industry being you know, being owned and operated and invested in by the large pe shops. What kind of size of an industry is it right now in the US?

Um are It's hard to say because what's happened is, you know, we think it could be as big as a fifty billion dollar industry in the in the United States you know, by two thousand or twenty one, twenty two, But big portion of that include the illicit market. And because of the illicit market is what it is. We really don't know how big that is. But what we always say is that this is a conversion of a market,

not a creation of one, like for example, California. Well, actually not, We'll have to make you say that example for the next time. But you're leaving us on a sweet note there. Let's put it that way that as Matt Hawkins, managing partner of Entourage Effect Capital, great name for for accounabis capital business, coming to us from Dallas. Time now to get back to some market conversation. David Harden is CEO of some of Global Investments with one

point two billion dollars in assets under management. He manages the US Large Cap Equity Fund. And wouldn't you know what the U s art caps are rallying today? Not unusual, funnily enough, So let's bring in David to figure out why, David, why are we continuing to see just the market move higher and higher and higher in spite of so many challenges. Well there, thank you, Vannie, Glad to be on your show. Paul and excited to be here again and and appreciate

that the market is moving. And let's face it, a lot of that has to do with the FED. The FED put, the FED, zero interest rates, the system, open market accounts. UM, it's working and it is moving the markets forward, for sure. And that's a lot of what's going on right now. There's a little bit of euphoria as well. We have people using robin Hood, you know, and and buying stock, so there's a lot of speculation

out there. But in general I had attributed to the FED, so David, and when we think about the FED and the FED put, it seems like a lot of the performance when you look at the SP five hunderd is limited to a handful of names, those big tech names. Um, how do you view that? Is that a concern for you? Is it time to rotate out of some of those

winners into maybe some other sectors that perhaps have been lagging. Well, there's a little bit of difference between and and one of the things we look at a lot at some global is risk and trying to help manage the risk that is in the stock market without having negative surprises.

And when you look at these big names That's what's really different between the if you want to call it a bubble territory that we may be in right now compared to stay two thousand, is that in two thousand you had a lot of low quality, um call it junk, risky names. Now you have a very high quality Microsoft, up, Amazon, up Apple. These are very good, rated the most innovative

companies that we have in America today. So the difference I think that you can hold on to this and continue to hold these names is they're so high quality and such good companies that they deserve to be up. No one in Microsoft is laid off, so to speak. Right they can continue to work. Forty some odd million people out of work right now, but they're not off the internet, they're not off their technology. They're all still using their phones. So very important that these companies can

continue to execute. I know anothers actually, like is Walmart? Is that also a pandemic play um In some respects it is, but we held it long before this came about. But in recessions and periods of where people are unemployed like we are in right now, Walmart tends to gain market share. If you look at the past, they're up about twelve percent year today. But this is with really low risk. With the beta point five three, Walmart provides you good return with very very um low downside risk

and that's what we like alright. So, David how Abot, we just got through the earnings from the big banks last week, some really really strong trading results coming out of some of those banks. How do you look at the banks right here? Well, and that's and that's just if they can make money through their trading through other areas besides the yield curve, then that's worth looking at

and that's worth investing in. If they're making money from small business and the yield curve, that's something that I would want to avoid. So economic and monamental is disconnected. At what point do they reconnect? And do you very very quickly shoveled shuffle the playing cards in your deck at that point, well, you have to write, because right now the reality is weren't not We're not trading on

fundamentals as a whole. It is focused in a very narrow part of the market um, and it is focused on the FED and if the virus and the vaccine and everything else comes to play, where we can treat this and we can go back to quote unquote our normal lives. Well, then a lot of that fed and a lot of the stimulus goes away, and we're supposed to be able to go back to work. So it becomes somewhat of a good news becomes bad news, and

you do have to trade that. So our expectation is that the market continues, but don't be surprised if we have a big risk off scenario, a severe risk off episode, and I think it's very likely over the next year. So that kind of goes to the decoupling issue here. We've got a rising stock market, rising just kind of risk assets in general, yet the economy remains extraordinarily weak. We're gonna, you know, get a brutal Q two GDP

number shortly Jobe's claims coming out later this week. Are you concerned that at some point that that decoupling just can't last. Absolutely, it has to shift back to normal. The focus has to go back on these reopenings and how they're not working or being delayed, on the economic disappointments, which you just mentioned, and one that you haven't mentioned

is the election. So I think most people are waiting hoping that that maybe somehow the election can be in the favor of the market, but everything indicates that it might not be. What's the question you get most from your clients there in Salt Lake City and surrounding areas. I think most people ask what should I do? What should I do? Should I put my cash to work?

Should I sell out of the market? And I think they're looking for advice and in general, you know, as an institutional investment manager, we have those answers, but they're very specific to each person situation. So it's really important. I think that you know, you talk about essential workers and how important they are. Advisors and investment professionals are absolutely essential to help people understand what they should do, but that advisor and investment professional has to understand the

underlying um risk and characteristics and profile of that client. David, thanks so much for joining us. We really appreciate your commentary. David Harden, chief executive officer, chief investment Officers Summit Global Investments at one point two billion dollars under management, based in Salt Lake City, Utah. We appreciate his thoughts. Thanks for listening to Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform

you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn. And I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio four