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Gonna right to Susan Spence. She's the chair of ISM Manufacturing. Susan talk to us about this. ISM Manufacturing came out at forty eight point five. The consensus was forty nine point five. Tell us what's going on?
Good morning, Thank you for having me on.
You know, unfortunately we have another month of contraction abouzero point two percent lower than last month, so forty eight point five.
We are absolutely under consensus.
What we're seeing and what our panelists are telling us, of course, is a continued issue with uncertainty in the market driven by terrorists. So this month, if I can talk about demand, outputs, and input, it's demand which is new orders, customer inventory, backlog, and new export orders. Three of those four indicators continue to contract. Backlog and new orders contracted a bit slower this month at a slower rate.
New export orders.
Not surprisingly took another plunge in an accelerated reduction at a three percentage points lower. So, in our view, the lack of new orders driven by that uncertain demand from the marketplace demand, the conflicts of who's going to pay for the tariff costs. The customer index for inventories does remain low.
We always consider that positive.
At some point customers have to reorder, and so we're hoping to see that.
But that continues to contract.
So our in our survey, eighty six percent of the general comments from our panelists were about the terriffs.
It was eighty two percent last month. It just continues to grow. It's not gotten any better, and certainty is even worse.
Susan, Susan, do you get the sense that if some of the tariff headwinds were removed, things get better quickly or is this sort of permanent confusion in the manufacturing sector.
It's not permanent, but it's not quick.
So we think if tomorrow everything was settled, and of course it won't be.
We think we're in this for at least the summer. It's going to take some time. We already have.
Some inventory at the higher prices customers, again, is indicated by the survey results.
Are hesitating to order, and so that is driven down. Production, backlog is down, and I'll talk about production and employment as well. So we're in it for a bit. The best thing that could happen is certainty.
And then my personal belief is it's still going to take a few months for folks to not wait for the other shoe to drop.
If you will, Susan, thank you so much for give us a couple of minutes of your time. Susan Spence, Chair for Ism Manufacturing PMI, the Institute for Supply Management, joining us here. Weaker than expected manufacturing numbers coming out this month.
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The last time we saw Sam Fazzelli, who's the director of research and does some of the healthcare stuff for Bloomberg Intelligence, he was here in New York and he was on his way to Chicago to some conference where a lot of these healthcare folks get together and they talk about new drugs and new therapies, and he said, watch out, there's going to be some deals coming out of there.
Boy was he right.
Santa Fe buying immunology biotech Blueprint for nine point one billion, Bristol to pay buy in Tech up to eleven billion dollars for a cancer deal. Moderner is getting some new news. So we got to get Sam here. He's still in Chicago. He's at our Chicago office there, Sam, thanks so much for joining us here. We've had some deals today in the healthcare space. Help us think about this centi feed deal here. Nine point one billion dollars. That seems pretty substantial.
Yeah, well it's more than I have in the back of my sofa if you like, and you know the little change that you find there. But this sector needs these. I mean, we've had a drought of deals since Johnson and Johnson did interest Sellular Therapeutics, and then we've got this deal now. And the sector, as I'm sure you've talked about we've talked about, has been under pressure because of all the new issues that are being created for them with the current administration, and that really slowed down
deal making. So it's nice to see this deal happen. Not the biggest premium in the world twenty seven billion dollars. But still, it's nice to see some of these deals happen, and I think, assuming we don't get another round of tariffs for farmer drugs and most favored nation conversations turning up, it might be the beginning of a little renaissance in deal making.
What was the absolute coolest thing that you learned over the weekend?
I mean, I was.
Floored yesterday I was sitting and thinking of you and reading all these amazing articles coming out about these amazing new drugs that could have tremendous effect on cancer.
For example, what was the coolest thing you heard?
Yeah, so, Alex, there's been some continued evolution an increase in opportunities in breast cancer. So AstraZeneca had two presentations yesterday at what they called plenary sessions, and that's one of the key areas where I mean the room gets packed with ten thousand people or whatever the number is. So they had an update on a breast cancer drug which is continuing to further expand the options that patients
when it gets approved. If it gets approved, patients have in treating that disease, which has become something that a lot of people as long as they're lucky and don't get the worst kind of it, it can live with for quite a long time now. And then we had one also from them on gastric This the guest stories of digital junction disease, which is not one of the is a bad one and there's not been many therapies there, and so that was a really good, very good data set,
I have to say, practice changing. And there's a whole host of phase one, phase two early stage drugs that look really good. So I'm going to be coming to this conference for I don't know how many more years because it's going to keep developing.
Bristol paying Buy and Tech up to eleven point one billion dollars for cancer deals. What's going on there?
Yeah, up to is the operative word. The actually guaranteed cash is about three and a half billion dollars, so about one and a half billion right up front, and then when the deal closes, and then by twenty twenty eight another two billion. That's not contingent on any there
are just anniversary payments, payments. So that's pretty good given that they acquired the asset, amongst the whole host of other stuff from a Chinese biotech company acquisition by a theist only a few months ago, and it's in a new class of drugs that people have got excited about. There's Mark that did a deal, There's Summit and Akiso. Fizer just did a deal on last week, paying one point two billion dollars for a drug in development, which we quite like. The data for that was presented here.
So these are drugs that are trying to push the barrier of what we've been able to achieve, which with what's called immunotherapy, can you do better? Can you push more patients to survive longer using these drugs?
What about Oh wow, I just lost my train of thought.
Oh it was there, it was so brilliant, and then it went away.
Oh I know. Funding, here's my brilliant point.
Government funding for universities that have big medical units.
Like did What were people saying about that?
Yeah, they're not happy. I've talked to a lot of people here and you know, even my interestingly an uber driver that I had who does double just doubles up. She works in a lab that does genomic analysis for scientists at Northwestern University in Chicago. She said she's noticing a palpable slowdown in the request she's getting to do analysis of you know, laboratory analysis because people are uncertain. It's even got to yuber driver, which is which is
sad now it is it is a problem. People are worried and will We'll have to see whether philanthropists can fill the gap.
Sam, So from your conference there in Chicago, what's is the key focus still cancer or is there other parts of healthcare that are getting as much I guess attention.
Yeah, but so this is a cancer conference. This is the biggest cancer conference in the world. People come from and I have to say there's a palpable increase in the number of presentations by Chinese scientists, real and companies. Yeah, every year's got more and more, which is expected. They've been funding research significantly for the past fifteen twenty years and this is the fruits of it. The X conference
that's coming up is a also. I don't think it's in Chicago, but it's over here somewhere in the US. Is the American Diabetes That's where you get all the obesity, liver disease kind of data that that we're also looking forward to.
All right, Sam, thanks so much for joining us. As always, Sam Fizzelli, Director of Research for Global and Industries and Senior Pharmaceuticals Anels for Bloomberg Intelligence. He's based in London,
but he's in our Chicago bureau todays. He spent the weekend Eddie as he was just mentioning a cancer conference and where you know, a lot of the latest science is presented, so and in for investors, it's really important to think about how you know which things which I guess, therapies and drugs you want to finance?
Mean work?
Does Sammon have the coolest job? Like media is really cool to one of the people.
Energy is really cool. We all love it, but like his stuff like changes the world and.
He actually understands the science and can explain it to people like us.
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Deal and Paul Sweeney live here in our Bloomberg and Arrector Broker Studio streaming live on YouTube as well as John was just reporting SMP at fifty nine hundred. I mean, after all ups and downs this year, pretty much year to date, we're unched on the S and P five hunderd. It feels like a lot of effort for not a lot of payoff there. Shane Sissel joins US president and
CEO of ban Rion Capital Management from Chicago, Shana. How do you put twenty twenty five year to date into context for your clients, because boy, we were down twenty percent. Now we've retraced most of that from the recent highs. How do you position the twenty twenty five Well, I.
Went into twenty twenty five thinking it was going.
To be volatile.
It lived up to my expectations, so we positioned portfolios for volatility and did quite well as a result. Ultimately, what come down to is as more and more information gets out. We have this twenty four hour news cycle, and people get information in real time. The markets are able to respond to news quickly. But more importantly, we've seen that the retail advisor has been eager to jump into the market when it turns downward, which is unusual.
That's not normally the case.
It's typically the institutions, and we've seen that kind of reversed where the institutions are holding off while the retail investors are jumping in, and ultimately that's kept the markets from getting too far down and they're able to rebound pretty quickly.
Basically.
You know, if you look in the past, normally we look for the capitulation of the retail advisor, and we just haven't seen that. So for those reasons, that's why I think there's been such great volatility.
But on the flip side, you have to wonder, then who else is left to buy the rally? So where how our funds positioned institutional investors. Clearly retail has been buying the dip, so as you mentioned, there may not be an extension of that.
Yeah, but the institutional investors have sat on the sidelines, and presently they have the bigger money to put to work and more likely to move the market when they jump back in. There's still very much on the sidelines, so I think there is some opportunity to drive the market higher. It's just not how we normally would expect it to be.
It's also a little bit concerning.
Obviously, the institutional investor tends to be the more informed investor, so the fact that they have stayed on the sidelines can mean a lot of things, but it's not for lack of information on their end and lack of analysis.
But you know, if we talk about analysis paralysis all the time, there's a lot of uncertainty related to tariffs, related to the administration, related to monetary policy, and I think that in many ways the institutional investor is a little paralyzed by the uncertainty and for those reasons unwilling to jump into the market, which I think might be to their peril.
Shana, I know you do a lot of work with alternative investments. When you speak to independent advisors, how are they using alternatives these days when volatility both in the equity markets and the bond markets are pretty pronounced.
Well, that's exactly where they use alternatives. If advisors or individuals where to jump and allocate twenty percent of their total portfolio two alternatives, they would have actually done quite well through the volatility, as these are low to no correlation or even in some cases negative correlation assets. And so if you look at the most volatile parts of the last five months, you look at March, some of April, some of February, you'll see that like a BTL, which
is the AGF anti beta market neutral fund. That fund largely outperformed the S and P by a substantial amount, was very positive during that period of time. So even a small five percent allocation made a huge difference in client portfolios. And then you start to pair that with other low to no correlation assets like CTA and CBLS and MRSK, and then you have Bob Elliott's unlimited multistrat fund, and you have a number of these alternative funds that
all did really well through the volatility. So when equities and fixed income were down, they were up, and so that actually helped you through the volatilities. So advisors that we work with that implemented those portfolios actually wrote out that period of time quite well.
I know that where you look at in the tech market isn't necessarily broad strokes or you know, buy AI or buy the telecoms or whatever, but the mag seven have really helped to lead that rally over the last month. Does that continue or do you continue to see value in different types of names?
Well, obviously I see value in different types of names as they haven't participated and they are looking more attractive on.
A valuation basis.
But the tailwinds really do sit with those tech companies because the biggest tailwind to business right now is AI, and so anything related to AI, anything incorporating AI wins. And so we saw with the mag seven, with the most recent Nvidia earnings report that the demand for AI is strong and the move to from learning and to the next phase of AI is there, and so the
Blackwell chips, the greater need for computing power. All of those things are real and very much in their infancy and the sense of that there's no infrastructure there, and so there continues to be substantial tailwinds, and so that's why they continue to lead. You know, other areas of the market have headwinds. So if you look at say energy, you know, we have increased supply coming on, but we
have you know, declining demand from Asia. So that is great if you want oil at forty bucks barrel, but not great if you're an oil investor or an enery G investor. You look at healthcare and we've seen a lot of headwindes there but also some tremendous breakthroughs, and especially in oncology, so you know, there's pros and constant everything, but some of the cyclicals are starting to look cheap, and that's definitely a place that I would be looking.
All right, Shanna, I really appreciate. I appreciate it. Always good to get your perspective.
Shane sissel As, President and CEO of Benryon Capital Management.
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This is Boomberg Intelligence. Alex Steel here alongside Paul swe Need. This is Boomberg Intelligence Radio. We cover everything you need to know in business, economics and finance, a lot of media and also a lot of energy. So I don't know that much about fusion power. I'm the first one to say it. John Tucker apparently knows a lot about it. But we're going to discuss this right now. It could be a really good source.
Of clean fuel.
And for this we bring in tay Technology CEO Michael Binderbauer. Just the company, Tay Technology is just closed one hundred and fifty million dollars sin its latest funding round. The whole point of this company is to develop a commercial fusion power Michael, if I knew nothing about fusion, which is highly likely, tell me.
What it is, how hard it is to do.
Yeah, So it's basically what nature does, based right, It gives us our life and energy here on the planet from the sun. So any star you look up suffusion reactor basically, right. So what we're trying to do is to replicate that, terristrially, to make essentially copious power, carbon free, clean and sustainable for the future of humanity.
Where are you in the process at tay So we're very close.
We're just one machine a way to get to a point where we actually harvest more energy than what we're putting into the facility. This has been obviously a long journey. It's hard to do, terrist Really, the stars have a lot of gravity.
We don't have that.
We to use other means, magnets and all sorts of things, and as you've probably seen over the last few years, has been a playthrow of news inching really really close to the goal and across multiple efforts on the planet. So we're about a three year way to get tonate energy and somewhere early twenty thirties, we hopefully have a power plant online.
What would be if you're able to achieve it and have a power plant? Like what is that? Is that just tremendous amount of energy with like no footprint.
Yeah, it's very small footprint. So it's the highest energy density fuel you can have, by the factor of five to ten, higher than fission. Even it utilizes hydrogen or light species that are ubiquitous, So there's infinite fuel supply if you will, and you would harvest clean energy out of that at probably starting at a scale of a gas fired turbine, so something like four or five hundred makawatts per plant, and it would literally be able to distribute wherever you needed it in the grid.
Is there?
Can you talk about the economics surrounding this technologlogy?
Who would be the who would be the users.
The buyers, the developers of this technology?
Yeah, so I think what we're seeing and this gets to what we just announced today. Aside from raising capital, we really have a long partnership with Google and they've been deep with us on machine learning and tools to help make this more efficient and more economic, and in fact, they would be a great first off taker for that right,
all the hyperscalers. Everybody that has high energy intens applications growing at tremendous rates, right with a gap between supply and demand developing, is looking for electrons and particularly green electrons. So those would be probably the first off takers for the technology.
Oh, I got to ask you, John Tucker, he likes his fusion.
What sets you apart from ETR in terms of the reactor itself, the containment that's a fusion reactor or what?
Yeah, so good question. So Eater and others are working on tokmacs, we actually are not. We're working what you see if you have a visual we have a compact machine, not the size of gas turbine that can make about the same output as those other plants. It's much more efficient uses smaller magnets. There's various tricks in the physics that allow you to do that, and that brings something that's more compact, cheaper to produce, of course, more economic to deploy, easier to maintain, etc.
And you can.
Essentially it's centralize these. We think we can build those sort of cookie cutter in a factory and deploy on site. And the other thing I should add is that sighting on this compared to the other nuclear cousin, which is fission, right, it is a lot easier. There's no meltdown possibility, there's no sort of nuclear accident of substance that people would have to worry about. It's truly clean and benign, and so you can deploy it where you need it in a much more straightforward way.
There's no use of beryllium in that reactor.
No, no. In fact, ours is using hydrogen and boron, both of which are light and super ubiquitous.
Well deterium as the fuel, right, So the terium.
Atridium is one fuel cycle that's used by some of us in the fusion community, and we can burn that too, but we're really focused on hydrogen and boron. Ultimately, that turns out that only makes helium, so you have no neutrons, you have no radioactivity to speak of. It is just a nirvana of energy. Essentially, you get ubigulous fuel in no radioactivity or pollution in the process, totally sustainable, and we think it will be competitive from a cost perspective.
It will be probably starting out midfield in current generation asset costs, so you're not as cheap as you know gas or renewables, but you're not as expensive as fission is today is somewhere in the midfield and then trending down.
Okay, let's pretend that neither of us understood what any of you guys were talking about in terms of brilliant. That's why we have him, right. He knows a lot about a lot of different things. Before we let you go, just how hard is it to have gotten to where you are?
Like?
What has been like the biggest hurdle?
Oh gosh, it's been an enormous journey. I mean, I've aged I started this out high school. I'm said, I started out out of graduate school with my brilliant PhD mantur, and then it took us about twenty plus years to amalgamate the technology around it. There's a lot of esoteric,
absolutely extreme things you got to master. Power supplies, accelerated technology, diagnostics, feedback loops, you know, use a lot of machine learning in AI, a lot of we developed together with Google in the last decade that can react on the blink of an eye to make changes in what happens inside and do that reliably and consistently. And so those are all the technologies we now have, so now we're putting
in the last machine. So it's been a long journey and developing lots of technology to do that.
All right, Michael, thank you so much for joining us. Michael Bindebauer, CEO of Tay Technologies, joining us there with some exciting new technology on the energy front that John Tucker's all into, which.
Is now like insanely impressive.
Questions were like even nobody understood them, so love it.
Make it all commercial break, that's true.
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