The Strong Dollar, Apple, And Oil (Podcast)

work from home. Vince. He's still bullish here. Yeah, I'm actually listening, you know, listen that when I see two year years about one year yels back to me and and the rest of the curve something similar. That's the fixed income market pushing back against these multiple aggressive FED rate heights. I understand the argument, and the argument is we go from eight percent to six percent, but how do we get from six percent to two percent in

in a in a short time? My argument against that is number one, why does it have to be a short time and why does it have to be two percent? The two percent level was something green Span just pulled out of the air. If we get to three or three and a half percent, that's where they said, guesses the neutral rate is so there's no reason that's not a good place to be. And if I think zero percent is a good level of inflation, that's just highway robbery. Dude.

I don't like it. You know, it's not a good thing, you know. So I do good grocery shopping usually, and my wife went last week and it came back with the sheer look of Carol and everything. I've been in there in a while, and you know, looking at the prices of a lot of things that doubled essentially. Yeah, yeah, I'd like them to get inflation down as quickly as possible.

But I guess you're what you're saying is, um, if they try and do that, they're going to cause so much pain that what there will be a backlash and riots in the streets, bricks through windows, and they'll have to turn around and and cut Yeah. Well, I mean think about it. You know, they're they're making statements, all of them basically saying we don't care. We're gonna put rates up and we're going to keep them there higher

for longer, and we don't care how that affects economy. Well, if you're in the one pent uh income level, believe for you, but for the rest of the breast of the world, that's gonna be very difficult times. If if the economy rolls over and goes into a recession, you're going to have people losing their jobs at the same time where prices are elevated. I'm not suggesting we're gonna have statifylation type of scenario for a very long time,

But how do they keep pushing aways higher? If we have negative growth and we've had two quarters of negative growth so far, we don't know what the third quarter is going to bring yet. They don't know what the third and fourth quarter is going to bring yet. So if we even have a slight positive growth in the third quarter and then negative growth again in the fourth quarter, what are they trying to accomplish. They're trying to beat They're beating back on price increases that, let me use

the word transitory. These energy increases are not going to be here to stay. I had a similar conversation last week with Larry Summers, and he was saying, you know, we're going to keep at these unemploy event levels seeing inflation until we're at five five and a half percent of unemployment basically saying that he's he thinks that to our nehru is um, and getting there is going to

be extremely painful. Uh. For for the U S economy, for US workers nonetheless, UM, it's tough to be short to be long these markets as they continue to fall, right, I mean, yes, we've turned around a little bit today, but we're at thirty nine on the S and P five hundred. Um. Where do you see it going in the short to medium term? Uh? Well, I got a dinner bet with a trader over by the end of the year, so hopefully that's where it will be. Um.

I don't mind buying dinner. I like them. UM. But I think for the markets in general, I think we see it harder because I'm just not convinced. And that's under consensus. By the way, that's consensus. We were checking yesterday's I think forty three seventy five right now. Yeah, so against the consensus, So I guess not this time. It just doesn't look good right now, especially after the last few weeks. Drops out of the last seven sessions

were down six of those. Uh. And a lot of times you'll get some turnarounds during the day, but we end up in the red by the time the closing bell rings. Yeah. I mean, look, I can tell you, in all my years of trading, I never made money on a real money on a trade. If I bought and it went up the same day. I was always layering into trades and it was always moving against me because I always thought it's better to be first than last um And I think that's going to be a

similar situation to this. I think once we get through September and we get into October and we see inflation numbers rolling over. We saw the I S M services prices paid dropping yet again this week. We at cp

I next week. That's going to be a really interesting number ahead of the ahead of the FED meeting, And I think just going forward, we're going to see inflation beginning to moderate, and that's going to give the Fed an opportunity to pause, and you know, if they don't, it's going to be what Larry Summer said, They're going to drive us into a recession and it's going to

be very painful for everyone. And then I'd like to see them stay there at high rates, Like what's going to be there argument to say we need to keep rates at three to four percent with negative growth in the US of company makes absolutely no sense. Vince, do you think we're going to get a rate hike in September? Then kind of the wait and see. I e. It takes a while for rate hikes to really impact econmy and I think that's really what they should be doing.

And they're going against They're going against seven or five points, right, I mean they're doing seven. Yeah, I think I think they're gonna go seventy five basis points. Um. Powell was very very hawkous the last time around. I don't think I don't think he wants to sacrifice credibility by by suggesting in any conversations coming up. I think he speaks tomorrow. Um, that's seventy five is not in the cards. I think that's a given. If they go less than seventy five,

the market's going to rally lot crazy. But I think you're just a pencil wins. Seventy five it's there. The question is what comes in October and November. And I'm going to stay on the argument that they do nothing after September because I think that the data just will not support Yeah. And the Journal already had a story this morning that they're gonna go set me five and

you know the journals where they leaked to that's right. Well, you know I'm gonna push back on that one because I worked at the journal the columns before coming to Bloomberg, and the hit and miss ratio for those guys who covered the FED was bel So we're getting leaked, all right, Vince, good stuff as always from the home office. Vince Signarella, Global macro strategists for Bloomberg News, former currency strategy It's just not happening. Someday we're gonna get him in here,

I don't think so. He looks perfectly comfortable, comfortable at his work from home office. He has completely made the evolution to work from home. Let's bring on our next guest, Mark Smith, Senior VP for Investments at Wells Fargo Advisors. Mark, thanks so much for joining us here. I'm sure your phone's ringing off the hook in this year two saying my stocks they're not working, my bonds they're not working. You know, maybe I on the dollar, I'm I'm feeling okay,

But what do you have? What what what the conversations like with your clients these days? Well, thanks for having me on it's always pleasure to be on Bloomberg. Uh, yeah, you're absolutely right. Clients are calling, um, but they are prepared for this. I mean that the FED has spoken pretty clearly about what they're intending to do, and uh, they carry a pretty large mic. Everyone's listening. They've heard

that the rates are going up. And so folks are my clients specifically, are expecting volatility because when you're having a FED that's tightening, quantitative easing is not gonna be there anymore. Everyone's expecting for there to be a little bit of pain while this happens. And so the long term investor is the one that's still in this. And I gotta tell you there's a lot of folks out

there there in this for the long term. They've been trained I think for the since two thousand and eight, two thousand nine, UM, going into the pandemic that if you kind of you know, buy and hold, good things happen. And so, um, that's what I'm hearing. A lot of folks looking for opportunities in this environment. You look at the tech sector, there are a ton of them. Um. There are companies that we all know and love that are down. Um, So folks are nibbling. All right, there's

dollar cost averaging. I think what's one term that investors need to write down put on their fridge dollar cost averages. If you see a bad day in the market by a little bit of some of those names that you've been hoping and praying that we would go down this much. Don't get nervous when fearful. When people are fearful, be greedy. I hear you, Um, you know that's uh solid investment theory and put to practice. I mean, if you step back and look at the charts over a longer term,

you have to admit that it always proves correct. What do you like right now? Mark? Where where are you seeing the best opportunities in this environment? I think the best opportunity is in the financials. And here's why since oh eight oh nine, they're really one of the sectors that haven't rebounded as much as everyone else. Number two. In a rising rate environment, historically financials outperform. You look

at the data. The financial sector is poised because of um that interest margin and because of dot frank what what the bank are forced to do into O A go nine to shore up their balance sheet to make sure we never see another great recession again and having a bank run. These banks, I think are primed for

this environment. They are lean and mean, they've been doing the right things because the FED made them do the right things in O nine And they're already undervalued as a sector compared to every other sector in this and five harnts you're coming out of eight O nine if you look at the charts. So I like the financials, the regionals specifically. I think they're gonna do really well in this environment. Um, But um, any of the large banks as well. I mean, you're going in there, who's

keeping their money in bitcoin? Right now? That that that story is over, people are keeping keeping their money in banks. Um, it's the safest place to be. And um, I think you're gonna see them do well over the next couple of years. Mark Energies, you know had you know, it's it's day in the sun, a rare day in the sun. Over the last couple of years, I'm starting to see a little bit of a pullback in in oil. Here.

Do you guys have an energy call there? Should I take my money and say all right, I've done okay? Where do I stick around? Look? Listen, I think if you look at where we are, because when you think about energy, you guys think about it globally, right, you can't just think about it here in the US. So if you look at what's going on, we still got lockdowns and the one of the largest economies in the world in China. Once they fully get back on, I

think energy is gonna take off. You've got a huge issue with Putin and Europe UM and going into the winter. These are all I think you a little brisks that are out there that I will could and could make energy go up. And I think until all this is realized,

I think you've got to have a position and energy. Um, given what you're seeing globally going on from Europe and Putin to UM to China and having them still being locked down when all these things kind of swash out, I think you can still see some upside there all right, Supreme Fish Delight. Where was that restaurant that was in Harlem? And thanks for bringing that up, although I like closed it down a few years ago. Um, that was the restaurant that I ran in Harlem for a couple of years.

I was a restaurant our owner operator and it was one of the hardest things I've ever done in my life. I give my I sit my hat to all the restaurant owner is around the country for the work they've done over the last couple of years, because it has not been easy. It's hard to find good workers. Um. I don't know what these folks are doing nowadays, but they're not coming back to restaurants. Yeah, interesting stuff, you know. It's just you know that you think about the restaurant business,

You've got inflation on your cost. Yes, obviously the restaurant very difficult. But you know what, I imagine being senior VP for Investments at Wells Fargo Fargo Advisors in this climate is also fairly tough because Mark, you've got to be fielding a ton of calls from people who are freaking out, especially you know, investors who are close to retirement. Right here, Um, we have seen in the last nine days, we've seen uh nine consecutive drops in global stocks and

that's the worst run we've seen in eleven years. Stuff all right, Mark, thanks so much for joining us here. Mark Smith's senior VP Investments for Wells Fargo Advisor's former restaurant owner Supreme Fish Delight in Harlem, formerly up there, so very interesting background. I'm looking at my phone, I phone model iPhone eleven. Dude, you really need an upgrade, do I? What do you got? I have the thirteen. Yeah, it doesn't look any different, a better, it's no, but

it's not the way it looks. I think, um, five G started with the twelve. There's a couple of things. Five G started with the twelve. The other thing is the mag safe thing started with the twelve. So I can just like my charge at home. I just stick my phone to it. I don't plug it in, I just slap it on there. And uh yeah, alright, this year's a good year. All right, we'll see what we'll see. I don't need an upgrade, it's probably the thing, but I do think you tell me a right Ed loud

Low West Coast, corresponding from Bloomberg News. He's all over this Apple event today taking place in Cupertino, where they're going to launch some of their new products, including the iPhone fourteen. Ed, what's the buzz in the valley about our friends and Cuppertino. There's this fantastic meme that someone tweeted this morning of Christmas Day, and this man wearing a red plaid shut opening a box and pulling out

the exact saying red plaid shirt that he's wearing. And I think that that's what you guys are kind of getting at, right, that these are incremental updates. But you know that that we get a new iPhone every year almost right, and between iPhone twelve to iPhone thirteen, which I also have, you know, the distinction in this day and age has been whether you get the sort of bog standard consumer model or the Pro model, which has higher spec camera and processing capabilities and is kind of

aimed at creative professionals. And it's much the same with the iPhone four team. We expect same as people who like to think of themselves as creative well yes, yes quite or who I guess work in the creative industries. But you know, that's what we expect this time. Four versions of the iPhone fourteen two Pro two Standard, no mini version. You remember. I know for some people that is a bummer, but Apple is kind of going in the direction the rest of the smartphone industry, including Samsung

is which is bigger, screens are better. Um. The key is in the hint of the poster for the event, which is called far Out. Have you guys seen it? So it is the Apple logo illuminated in the night sky as a star constellation. And Mark German, our Apple reporter, has this brilliant column and his newsletter talking about kind of what that could mean. It could be as simple as a wallpaper, right, and I know that sounds dumb.

Or it could mean a tease to satellite capabilities. And I think that's the next technology area that the analysts are looking to. I dig that just googled. I just googled the far out Apple and then you can see the um the sort of universe picture that Ed is talking about, very very cool um. And now I'm even more excited than I was before. What time five o'clock? Right? Is it five o'clock Eastern time? So two o'clock your time? Ed? What time do we start to hear these details? Isn't

it one o'clock eastern time? Hold on, let me look it up. Give me a second. You guys talk amongst okay, So I'll tell you while you look this up, I'll tell you. Do I get subsidized again? If I got buy a phone and my shell now a thousand dollars I think now on, you're just from now on your shelling out of that. Let's maybe you switch over from contract to contract everything about that. But what I'm most excited about myself is a new Apple watch because as

I get more um interested in the data. Are you talking to your watch? No? I don't talk to it, but it measures my heart rate and heart rate variability, and it tells me how well I sleep, or at least it tries to do that. It's not working quite as well, I think as some of its competitors, um Polar has a much better heart rate monitor whoop maybe is better at telling me how I sleep and my recovery time. And I think Apple could really up its game um in terms of the health functions on the watch.

ED what are you hearing about that? Well, good news. I mean we're expecting a new generation of Apple watches as well. It's interesting. I don't want to go in too much of a tangent, but there's been a lot of debate about whether Apple needs to buy Peloton. For example. You know, it's reports out there that Peloton is kind of shopping itself amongst its current difficulties, and a lot of the response from the Street. It doesn't need to. You know, it has hardware in the watch, it has

the content already, why would it buy Peloton? So we do expect a new generation of Apple Watch, and you know, much with the phone, the question is whether you go for the higher spec version of it with the larger screen,

or you go for the cheaper model. I think that the other big theme conscious of time is that you know, from an analyst and investor's perspective, you want to see how Apple prices all this stuff, right, because sales volumes could drop going into the end of this year the economy such as it is globally, so higher prices can maintain the bottom line. How about for some emerging markets

where a lower price phone would do better? And I know they had a model a couple of cycles ago that we're kind of targeting that, you know, whether it's India other merger markets. Where are we with it? Yeah? I think, well, I go back to the mini, right that that the mini and the non pro versions of the phone are aimed at. That that you look at a chart of ASPS average selling prices and they've gone through the roof towards dollars of these handsets, right, I

remember why. I don't remember. I'm not that old, but you know, when I was a kid, you could just about afford the basic iPhone. It was much smaller, lower spec It's the size and the capabilities that driven the prices higher in markets like India, fascinating market. You know Samsung does well, but you have to remember there's many other players in that market. Local players are the Asian

players who are much more focused at the lower end. Yeah, it'll be interesting to see what kind of a ray because at some points, at certain generations they do come out with like an R model or something which is I guess just as fast but doesn't have all the bells and we see, yeah, exactly. So hey, and where's Apple in terms of the whole supply chain discussion? Ease kind of the poster child. What do they say these things?

You know, Apple is the great bluffer, right, that's probably being a bit too stronger unkind, but often guides conservatively. I think back to fiscal second unders and over deliver. Yeah, they have said for a decade they said that supply chain issues. At that time, we were kind of in the depths of the Ukraine crisis, China zero COVID policy would cost them, or they'd leave between four and eight

billion dollars of sales on the table. What materialized in the fiscal third quarter was a number significantly less than four billion dollars, and they guided to the fiscal fourth courter the period where in now that it would continue to be less than four billion dollars with an improving supply chain, even with a worsening global economy. So I

think that that's well known. I mean, you guys know much better than I. They've done it a long time, guided conservatively, and you know, I'll leave the person un named but telling us that we're so old. Yes, no, no, I'm just saying Apple Apple, As someone who I respect and newsroom said, you know, Apple may go as far as to be sandbagging the cell siders, which I think is an interesting idea. And you're flying out here, yes you are you a United? Are you flying with United?

Because then it's kind of iffy if you're flying in a GfK with United area. Well, other airlines are available, but as people know, SFO as a United hub, and I have been known to fly United. So what are you coming here? Are you testing out some brand new ev Well, are you looking at a new rocket, I mean New York City? What do you do here? Well?

Do you guys remember a company called Nikola that has Yes Trevor on trial in the Southern District of New York three counts of securities fraud, one count of wire fraud. And I'd like to come to town to cover the trial. Wow. Well, I hope we can test drive some cars together. You know I got my truck right, yes, yes, and you if you have me on the show, I'll come sit next to you in person. Coming to the East Coast. Famous see your producer back in the day, he was

how bad? I have really fond memories of Matt and I cutting it very close to get to camera in Brussels because we were getting waffles. That is a true true story from many years ago. Alright, Ed, good stuff. As always, we look forward to see you here in New York soon. Ed Lulow, West Coast corresponder for Bloomberg News getting us the latest on Apple. They're having a product unveiled today, I guess is what they call out there and Cupertino always big news for the folks at App.

Right now is our weekly Crypto segment and to get started, I always just type in c R y P go our crypto currency monitor, seeing what's moving here. We got some weakness in bitcoin and ethereum. Today, Jordy Visor joins us. He's president and c i O of Wise Multi Strategy Advisors. Jordy, you guys recently launched an n f E n f T. Tell us about that, well, thanks thanks for having me on.

But in terms in terms of the n f T, we've been focused on crypto and I think more specifically on the blockchain and web three point oh and becoming more and more in the belief that it's going to

have an impact on all of our lives. But in particular since we're involved in the financial world towards the investment side, uh and so because of that belief, we wanted to make a move into it for the experiential side, the adapter die side, meaning we really need to If you're gonna believe in technology, you don't know what it's how it's going to impact your business. So we did this for a variety of reasons, but most of it had to do with our belief in the future of

crypto and specifically the blockchain. It seems hard to maintain that belief as we see um bitcoin stagnate at twenty thousand or below. Having said that, when I first started covering bitcoin, that was trading for one thousand or below. So it's you know, obviously it's made a big move in the last um ten years, but people seem to be paying a lot more attention to the move from sixty five to twenty than they are from you know, uh,

one thousand to twenty. Well, I'll just say I think one of the problems when people think about crypto is it just hasn't, in people's mind, become an asset that they understand yet. And I think it transitioned into an asset and had a major turning point in during during COVID for a variety of reasons. But the way that I think about it is just simply, there's about five

trillion dollars in fiat assets in the world. There's about a trillion dollars now of market cap withinside the crypto world, and the easiest way to think about when Bitcoin, ethereum and the rest of of the tokens would have a hard time, it would be number one. When the fiat assets are going down. We've obviously seen one of the worst years in both bonds and stocks and in quite

some time. But you've also had a situation where the innovation names, particularly technology, had a really uh you know, noteworthy fall this year. And I think if you were going to guess where you'd have problems for bitcoin and ethereum as an innovation side, it would be if all FIAT assets fell and if innovation fell. So I'm not surprised by the fall, uh, and I think people should be taking it in the context of what's happened in

the rest of the assets. The other hand, I was hoping we would see, you know, ten years ago, I thought, oh, this is a really cool new currency and I'll be able to buy and sell stuff. I actually lived on bitcoin for a couple of weeks back in two thousand thirteen. UM. But it hasn't evolved in that way. People aren't using it for transaction transactional purposes. They're using it, I guess, as a store of wealth, which is why the move

down is such a concern. Well, so again, I think that my evolution in this space was, you know, really transition from money to asset, like I said in UM, and now I'm more focused on it from the innovation side. I'm a macro person and I try to put everything in the context of how the macro world will will look. Uh. This at the end of the day is about less centralization, and it's about the users and creators having more ownership.

And so when when we sit there and talk about it as money, I don't think of it in that way at all. I think of this has asset and to a degree, every token outside of say ethereum and bitcoin, to me is more like a company shares, uh. And so I think it really depends on how you view

it into the listening audience. That's one of the big messages from this year for me was spending time on what n f t s. Last year, the whole explosion we saw on n f t S, what that meant, and for me, it transition for money, which is what it was in two thousand fifteen sixteen, to asset, which is what I think it was, and then in two thousand twenty one, I think it transitioned to something more like what the app store did the web two point oh.

So I've moved completely onto the innovation side, and I think thinking about it as money, I agree with you. We're going to have so many different ways of this being money, whether it's CBD, c S. I'm just viewing this more on the asset side and kind of a disruption to capitalism Johnny, real quick and as maybe unfair

given a time constraint. How do you define web three point? Oh? Well, again for me to make it simple, because I think it confuses people, I've called it the borderless Internet, which basically means it opens it up to so many But I really I think people should focus on this in less centralization, which I think is a dominant theme, you know, across the populist movement. I think it's a dominant theme right now in terms of trying to get people to

get back to work. So for corporates, obviously for banks, uh, the centralization really took an impact down two thousand and eight. But then you have the other side, which is wealth.

And if there's one message to leave with everyone on kind of where this gets more interesting, It gets back to that point that there's five trillion dollars globally of FIAT assets, and so if you're gonna have less centralization and the users and the creators are going to have more ownership well, right now, the top twelve percent of of people, uh or twelve percent of people of that five trillion dollars. And so we're talking about spreading the

wealth more and more. And that's why I think, whether it's talent going to cryptou and three point oh, you're gonna see more and more people focused on web three point oh as a less centralized world, which disrupts Web two point out, which is platforms, got good stuff, and Jordan, we're gonna get your back going. Do actually make this

stuff somewhat understandable for us? Luddite Story Visitor, President CEO of WIE Multi Strategy Advisers, talking all things crypto, including the evolution to web three point oh, you're talking prices, Madi's you've gotta have a demand call, you gotta have a supply call. It just feels to me that oil kind of the demand equations kind of pushing things around here. But let's bring in somebody who does this stuff for living. Julia fanzeris oil futures reporter for Bloomberg News. She joins

us live on our Bloomberg Interactive Brokers studio. None of this phoning and in stuff and quite I think You're gonna have more of these Bloomberg folks in studio going forward. I know that you've been pushing for it. I have been, and I mean, look, I think, um, well, Mike build multi we had great experience. It's great office in our offices around the world are incredible, and I think the collaboration side of it is key. But more and more, I think a lot of people are doing it online

in the what do you call that the metaverse? Metaverse? I feel like the metaverse is here, I think so. I don't know, but Julia is is live with us in the Interactive Broker studio on a day when Brent crude um is below ninety dollars, nime x w t I is off more than four percent right now. This is interesting, Julia, because we just had at the beginning of the week an OPEC plus UH production cut. I know it wasn't huge cut, but it was still going in that direction, and um another going the other way,

another lockdown in China. So is this really a demand issue rather than a supply It really does seem to be the case, especially this morning, because the demand coming out of China is obviously much lower with these new lockdowns. And also let's look at the fact that right now everything looks very bearish for oil. Sure, the bull factors of supply cuts and the possibility of the fact that the EU is also going to not allow Russian oil into the market. Sure, but that's further into the future.

Right now, it's not looking good for markets, and the liquidity is very low. We had the U S holiday earlier on Monday when the OPEC meeting happens, so that kind of got priced in that day, but then it really phased out and now we are at six month loads again. Basically, traders they're saying that there is no real reward for taking huge risks in the market right now.

They just want to pull out. And w h I just formed its death cross, which means that that means that the fifty day moving average fell below the two day moving average for the first time since twenty and so that's a barrish technical signal. There is no reason for traders right now from what they see and from

what they're telling me, to buy in right now. And as we all know, Chinese demand is a huge factor for the crude markets because they are such a large importer of crude with this COVID zero policy, it's really not looking great for the markets. Don't know how we get out of this China situation in terms of the COVID zero policy. It just seems like they're gonna have

fits and starts for the foreseeable future. And I guess you're just if I'm going to be an oil trade I just can't take on that much of a position assuming demand is going to come up from China, because you can't, I don't think exactly. And it's been so tricky obviously in these last couple of months with the Russia's invasion of the Ukraine. But oil has really given up all of those games, and so right now it's a tricky place for people to be trading. And we

see that people have really backed out. Liquidity is still at six year low, so people are not really pouring money into crude at the moment. I wonder what you think about the spr draw down that that UM President Biden administration authorized that really brought down gasoline prices, but it leaves us kind of vulnerable if there's any big problem. I mean, UM is OPEC trying to give us a

message with these hundred thousand dollars. How there a thousand barrel production cuts or what was the point of that? Was a message opaque earlier, and Saudi Arabia is the first one to say, Look, OPEC might cut because there is this disconnect from the crude markets and the actual products that are on the market. As we know, we've

been talking about tight supplies. There is not enough actual crude barrels on the market for the high demand in the summer, and then the crude market because traders don't want to be putting their money and kept tanking and taking despite the fact that supplies were still tight. Fundamentally, the market was still tight. So OPEC said for this not to ocquirk because obviously they don't want prices to tank. They said, we're going to cut supplies in hopes of

really helping the market meet the physical picture. How about our good friends down in Texas and Oklahoma. They never really ramped up their production, did they. I mean I kept hearing they yeah, I kept hearing stories that they don't. They really couldn't, and they didn't want to, you know, upset their shareholders and bondholders. So they said, we're going to keep our keep the cash fload going to you guys, and as opposed to putting it in the ground. Where

are those guys? What's the question is it is it too expensive for them to boose production or are they hesitant because of the regulatory environment in Washington. I think both. I think at this point the margins were much better earlier in the summer, but as they had mentioned, it takes time. So even though the margins were incredible for the money that they were going to put in right, absolutely in that moment it would have made sense, but it takes time to create those so they didn't know

if long term it was a good investment. They just had their quarterly earnings. Obviously they've done very well for themselves. But at the moment, it does seem that if there is another spr release that could also really bring prices lower, and people are worried that there's just not going to be a supply buffer in the market for when we really need sound like there needs to be another prices coming down. I've got the daily national average gasoline prices

here on my screen. I do three A G S, P R E M, so I can see what the premium prices. You do the premium because that you have to fill up with one at least, right and technically I think you do too, yes, so even if you puts worth of repairs, I just had four dollars and fifty one cents is what I'm looking at right now. And by the way, the gasoline price also went into a death cross at the end of August. It's been coming down, uh pretty, but diesels still very pressibly. Diesel

is still very high. Gasoline obviously came down. We've been trying to track these demand numbers with the e A seeing how much, and there have been they've been a little bit funky these past couple of weeks, you know, with some demand numbers saying, oh, it was lower than

twenty and not all these treators are actually believing that. So, but prices have really come down, especially as people weren't driving that much, and we know that people didn't drive that much as summer because of high gasoline prices, and now obviously the summer season with labor Dagon over pd S one is the ticker for diesel generic first and blah blah blah blah, it's something that's still high. I mean it's just a month contract. Yeah, yeah, So it's

a fifteen dollars fifteen cents. You know, started a year ago we were down below eighth, so it's had it hasn't really come back down that much. So diesels, if you're driving a diesel vehicle, that's tough, right. Well, and well that's because Russian oil, for example, is a grade that they used to produce diesel, right, and that's not getting in here. Um, and the stuff that we produced in Texas, Um, it's not it's not heavy enough. Is

that the case? Yeah, I think so. And also let's think about the fact that American drivers are so focused on gasling. But for Europe, as you mentioned, diesel is still very high, so they're still feeling that crunch as we go into winter, and there's going to be more fuel switching from natural gas to oil because natural gas prices are very high. So the market's murky right now. People really don't know which direction it's going to take

in the upcoming months. All Right, it's gonna be I tay that that story coming out of Europe is gonna be really brutal. I think you know, it sounds like it's getting a little bit better that they've did. Your putin this morning. No, he said, just give us our propellers, you know, and we'll continue to pump oil and gas. Sorry, through nord Stream one. He said, it's really the European sanctions and regulations that are doing this now. Whether or not you want to take Ladimir Putin at his word

is your own decision. But he also said nord Stream two is ready. We'll open it up as soon as you want, all right, Julia, thanks so much for joining us here. Julia Friends Sarris, oil futures reporter for a Bloomberg News joinings here. 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. Pet On Ball

Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio