Dor skuler joins in just a bit. Im Katie Greifeld in new york. Looking at markets, it is quiet. The s p 500, we can call that unchanged but the direction is lower. More so if you look at big tech. All eyes on nvidia tomorrow which we will get to do in a moment. Looking at the big benchmark, currently lower by. 2 and even more so if you look at the Philadelphia Semiconductor index, currently down by 1. 3 . That is because nvidia shares are a dropping after the Financial Times reported that Amazon Web Services has halted orders of the Company Super chip. According to the ft, aws is no longer placing orders as it waits for a new, more powerful model. You have nvidia shares lower but reading the report, this doesnt necessarily seem like bad news for the company. Mandeep amazon is a mid to medium buyer. Revenue tracking a hundred billion next year. Amazon just by virtue of its cap acts is among the largest buyers of nvidia chips and the fact that this is a negotiation tactic. They want the latest chips because nvidia is distributing chips to all of the scalars. What amazon is suggesting here is they are the largest cloud players and they want a bigger allocation compared to microsoft or meta. Katie that is potentially what is going on, an negotiation tactic and that amazon would want the best and brightest for the models. We are talking about the nvidia Earnings Report tomorrow and it is safe to say that nvidia is one of the most important stocks in the u. S. Stock market right now. What are we expecting to hear . Mandeep it is priced for perfection in the sense that this is a company that comes out and beats and raises every time. The Data Center Revenue is the most important and the growth has been tapering but that is where keeping the expectations without having the incremental news if amazon is to bring purchases, that will have an impact on the growth rate. That sequential will for nvidia is important on the data side. Katie i am sure we will be speaking with you tomorrow and maybe the next day. That is Mandeep Singh of bloomberg intelligence. Joining us to broaden to the markets is nancy tengler, the Laffler Tengler ceo. How high are the stakes on this Single Company right now . Nancy it is important to note that first and foremost, even though we hear about how concentrated the u. S. Equity market is, our top 10 names account for 33 percent of the s p 500. On the cap end dax it is over 60. It is the driver of this market is nvidia and then ai. It is going to matter a lot. If it sells off and that has historically been an opportunity to step in, that may give us a chance to get in. We have not owned the stock but on traditional metrics it is not that expensive if the growth sustains. I think what we know is that the use cases for ai and generative ai are exploding and i dont think this punch bowl gets pulled away very soon. Katie it is interesting to hear you say that what you look at for valuations, a stock like nvidia is too pricey. I feel like with some of these stocks the narrative is so compelling and the use cases are there in the story is strong that investors have been willing to forgo looking at valuations. Nancy and i think they should. We are institutional Money Managers and we have to stick with the discipline we promised clients. If you look at amazon and these numbers are old, since the ipo, amazon is up 178,000 and change. That begs the question, when is it too late to get in . It was a secular narrative that went on for decades and we think that is likely the case with nvidia. It is the Excellent Management Team that is no surprise to anyone and have pivoted in the right direction. In the Retail Investor or someone that has a different metric than we do, you step in and i hope we get a chance. We did have one chance and we missed it. It lasted 20 minutes. Katie looking at nvidia at right now, currently down 1 . We will see what tomorrow brings. Lets keep meditating on the ai story. It feels like when it comes to ai and playing the game, the semiconductor names, i feel like that is known. It feels like Everyone Wants to talk about data centers and how much data centers play into this theme. How are you thinking about the different sort of Second Derivative investments when it comes to the ai theme . Nancy our Investment Team has that old Economy Companies that have pivoted to first digitization and then cloud imputing and out generative ai and generative ai cloud computing. We are overrate the industrial sector and materials and energy, but specifically in industrials, there are a number of names that we own and will continue to own that benefit from the data center, names like carrier and they have appreciated a great deal and the runway is still pretty long, things to probably get fiscal spending. We want to proglical fiscal spending. Improved margins driving growth and we think that continues and management just raise the dividend 9 . It can be as obscure as American Express using generative ai and fraud alert detection, which has increased rock alert detection in the early days by 6 . We are looking for opportunities across all sectors and will continue to do that. It has benefited our portfolios quite nicely. Katie tech, industrials, data centers, and he might walmart fall into the bucket of things you like. What dont you like . Nancy i know there are a lot of folks coming out saying you should own Consumer Staples based on where we are in the cycle. We have been saying for almost a year that we think this market and this economy is analogous to the 1990s and i think we can continue to see the Growth Engine of the economy drive stock returns. We are under me underweight Consumer Staples and also underweight electric utilities which hasnt been as great but we do own some in our green energy strategy. And we are overweight there. I think it depends on the strategy. In large cap equities we are going with what we believe is the Growth Engine. Katie i want to throw you a bit of a wild card and talk about just portfolio construction. We have talked about that you run concentrated portfolios and when you think about just being an index that is not the way to go and if you take a look at active equity etf launches, it seems like people have been listening to you because the number of holdings, average number has been going down. For your style of investing, the kind of caper folios, if more people are doing that, does that make that less effective for how are you think about that . Nancy i think it is the opposite. I didnt know that statistic. Weve been doing this since the mid1980s, but it makes it more attractive because what you see is investors focusing on fewer names instead of the broadbased approach. You cant argue with the spy and the s p unless you add value and hopefully we can continue to do that. Our 12 best ideas portfolio outperforms are other strategies pretty much all the time and they are fairly concentrated to five to 30 names at 25 to 30 names. Some dont have the same level of risk tolerance. Katie if it works, it really works. Always great to speak with you. That is nancy tengler. Turning back to the micro, lets talk about macys posting a profit beat and raising outcomes. They expect customers to remain discerning when it comes to discretionary purchases. Bloombergs Romaine Bostick has spoken to the ceo. When we think about what we learned, it seems like the turnaround bear some fruit. Remaine tony spring, the ceo, took over in february. I asked him about the face of the turnaround plan and he said i have only been here for one quarter, give me some more time. He laid out the idea of the first 50 stores that they think can be the prototype for what they want macys to be. They have hundreds of stores right now and will scale that down to 350. He thinks the first 50 on the template for where he thinks things can go and a big part of that template our services, experiences, and fragrances. Katie delight the senses. Remaine romaine he said fragrances are one of those things people are willing to indulge in and spend more on. You saw that show up in a blue mercury, their cosmetics flagship brand but also in the space in bloomingdales at macys counters as well. Katie it is interesting to see the stock reaction and consider that they have activists coming after them. What does this mean in terms of pressure when it comes to those activists . Romaine he was reticent about answering the question. They have 15 members on the board and at least two of those are from that are cost brigade mashup. That our cows brigade park ark house ordered and were in that it takes them in the wrong direction brigade mashup. He is worried that it takes some in the wrong direction. Katie that is bloombergs Romaine Bostick. Macys currently down. 2 . Coming up, a cheaper cup of joe. Coffee prices should come down this year. We will talk with the ceo. This is bloomberg. Super excited to open up my diploma from Southern New Hampshire university. Im nervous, im excited. [man] okay, lets see it. Lets see it. Oh my gosh. Jesus suarez, i did it and its here. group cheers [narrator] next term starts soon. Visit snhu. Edu. Visit snhu. Edu. Katie the cost of a cup of coffee is on the rise as extreme weather hits global coffee supplies in brazil and vietnam. Our next guest says a respite is on the way and expects prices to fall this year. I am thrilled to say we have andrea illy, the illy caffe chairman. They specialize in espresso. You said you expect a decline in coffee prices in the second half of 2024 in late may. Is that still your view . Andrea the market is becoming more and more unpredictable. In the past the trend was similar that in this season the prices were coming down. But there are many reasons to sustain a higher price because more and more the Financial Markets rely upon four price surge and climate is the main one, particularly excessive rains in brazil and droughts in vietnam which of the two most important coffee producing countries. Katie it is interesting when you think about the volatility we have seen. It has been focused on robust prices. How has what we are seeing it translate over into the type of beans you use . Andrea usually it makes the replica arabaca a higher price. It is probably linked specifically to demand. It is used for instant coffee and some of the more entry level coffees in the market which probably did not decide to replace their coffee with a rabaca although there is a price. Katie for those who perhaps use the robusta beans, could you turn to a less expensive being . Andrea what happens is that because arabaca is the more expensive, when it is cheaper they use more to have a better response. When the cost goes up, it is not what is happening now, probably because a certain type of preparation like instant coffee rob isu more important. It is katie what is the actual supply and demand . Andrea supply and demand is in balance but it means there might be a deficit and then a surplus the next year it is a consequence of the unstable dynamic. This is a significant driver for price increases. In the background there is Climate Change because the expectation for coffee that yes, Climate Change impacts coffee agriculture and there is less liability in the supply and this commands a higher baseline. We will be able to understand the baseline which used to be maybe one dollar until 15 years ago and then it moved up and now probably the baseline is more around 1. 80. We will need the statistics down the road to really understand if the consequence of Climate Change the base increases which would completely revert the deflationary trend of agriculture commodities. Katie it not just coffee beans and you are seeing the effects of Climate Change and whether on cocoa which has been a big story. This is a broad stroke look. I want to talk about your business because you think about europe first ready to drink cold brew that you introduced in 2020 and expanded line in 2022 with more products. Really curious to see how that line is doing relative to hot coffee. Andrea really good. Cold brew is very fashionable. There is response particularly from the younger generations. It is a good way to drink more coffee in the summer time. Our effort is disciplined because we are famous for our blend. The best possible quality can only be one. This is why we offer only one blend, the only roaster with that strategy. The cold brew is based on the exact illy brand that you can enjoy it wherever in the market. And matching the taste, this has been the big effort. We are happy with the quality that we reached in terms of taste consistency. We now expect the market to grow. Katie i have to say i drink a lot of coffee and 90 of it is cold brew. I really enjoy this conversation. That is andrea illy of illy caffe. Up next is our social climbers segment. This is bloomberg. Katie time for a social climbers, look at the names we are following on social media. A bloombergs scoop, asml, a Taiwan Company said they can turn off their products. Taiwanese officials have downplayed the threat of an invasion. Scarlett johansson said she has hired lawyers to demand the ai voice that sounded too much like her. She said she declined an offer to voice and audio feature for chatgpt and was shocked and angered to hear a voice that sounded like hers when they unveiled their new audio tools. One person has died and 30 others injured after a singapore flight hit severe turbulence earlier today. They were headed to singapore from london and were forced to make an Emergency Landing in bangkok. Fatalities are very rare in incidents of turbulence. Coming up, we will speak to dor skuler about his companies ai powered robotics. This is bloomberg. The all new godaddy airo helps you get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo should i . Normally id hold. But. Taking the gains is smart here, right . Feel more confident with stock ratings from j. P. Morgan analysts in the chase app. When youve got a decision to make. The answer is j. P. Morgan wealth management. Hi, im kevin, and ive lost 152 pounds on golo. I had just left a checkup with my doctor, and id weighed in at 345 pounds. My doctor prescribed a weight loss drug, but as soon as i stopped taking the drug, i gained all the weight back and then some. Thats when i decided to give golo a try. Taking the release supplement, i noticed a change within the first week, and each month the weight just kept coming off. With golo, you can keep the weight off. And theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Katie conversations around Artificial Intelligence typically around its potential to upend the Global Labor Force but can ai also make you feel less alone . That is the hope of Intuition Robotics, making ai companions for older people. Here to talk about it is dor skuler, the cofounder and ceo of Intuition Robotics. Her name is ellie q. , but you are clear it is a robot, not a person. Dor correct. Thank you for having me on. We truly believe that while we create a guys that have a bond and ais that have a bond, they should be conducting a relationship with an ai and not a human. That is why our robot does not look human, it does not have a face or hands. Her name elliq kind of sounds technical to avoid confusion. Katie why is that so important that people realize they are talking to a robot, that this is not a person talking back to them . Dor frankly, i dont know why the whole industry is so fascinated the stated goal is to fool humans. There are great things we can do with this technology and i would be happy to share that in this conversation but we believe we have the full ability to alleviate the sense of loneliness and build a trusted relationship, to help with Peoples Health outcomes as well while authentically being with an ai. That is important with vulnerable populations that might develop dementia over time. Make it clear what it is and what it isnt. An example could be the relationships we form with our dogs. We love our dogs. They are loyal. They provide a lot of loneliness reduction and fun but we never confuse them with actually being a human. Even older adults in their 80s and 90s are perfectly able to create a unique relationship with an ai and treat it as such. Katie im a cat person and i am pretty sure my cat can speaking list but i take your point when it comes to maybe this is a relationship with a pet and it does not replace the human interaction. Talk to us more about the technology. How does a person form a relationship with elliq . Dor we deploy the latest generate of Ai Technologies and other capabilities that allow us to form this relationship. What is unique about it is elliqs proactive. The older adult does not need to prompt it and get a response. It is a freeflowing, twosided conversation and elliq can initiated. She can see you using vision in the morning and turn to you and say good morning. How was your back, is it still hurting you . What are you planning to do today . Shes contextual and remembers the previous conversations. Shes goal oriented which means she tries to motivate you to do activities that improve your health, improve your wellness, and reduce your social isolation. Katie the robot talks to you, she does not necessarily need that wake up word that alexa for example needs. Lets talk about the goal. You mentioned that elliq is goal oriented. Is this more about companionship or caretaking for Health Purposes . Dor it is a combination. Really caring for elders is holistic. It is not just about reminding you to take your pills on time, which we do, or help you exercise or work on cognitive training. It is really about being there for you. When we are alone think about one of our customers. She was married for 65 years and lost her husband. Shes in her mid90s. It is very hard to be alone after such a long relationship with nobody even greeting you in the morning. She started asking herself why should i even get dressed in the morning . Having that entity to move in with you and see you, acknowledge you, make jokes, and teach you things and motivate you is super important. We had to develop a lot of new tech for this. Being proactive is one of them. Being extremely contextual is another. Being able to promote different goals as a third. Embodying ai with body language because as humans, we do react to body language. That is why it is better i am here joining you with video as opposed to a phone interview. Katie what is the ideal setting, the ideal market . Is this designed for individuals to buy and place in their homes, or something that could work in nursing home facilities, for example . What does the penetration look like . Dor its primarily for people that live alone or spend a majority of their time alone either at home or independent living or assisted living facilities. The vast majority of our customers live alone. They can buy for themselves but we are proud of the partnerships we have with state and local governments and Health Care Institutions that pay for the product on behalf of the adult. For example, the state of new york, thanks to great cooperation with the governors administration, elliq is provided statewide free of charge for older adults. At the same time, when you look at health care providers, their cost of delivering care to the Medicare Medicaid populationi extremely highs population is extremely high. Having someone that can help work on their chronic illnesses, with their explicit permission come updating their physician things go bad so they can intervene early is very important. Katie you touch on what i been wondering about and that is how do you scale this . How do you balance raising more money and funding versus partnerships like some of the ones you just described . Dor yes. I guess my job partly as to raise money for the company as a startup. We always need to do that. Our customers, we have multiple motions for our customers. One is state governments with the budget programs, one is through health care, and the third is through direct to consumer. I dont think we are different than any other startup. Katie when you think about the mission statement, alleviating loneliness for older adults, you think about loneliness, it is not just older people who feel lonely. Could you ever see it expanding to younger generations as well or are you really focus on that segment right now . Dor we are really focused on that segment. 30 of the population, there are 12,000 americans that reach the age of 65 every single day. There are too few delightful, greatly designed products for this population even though they cost us the most from a Health Care Perspective and have most of the disposable income as far as their section of the population. When we are young, we are in debt, we say vanessa and we retire and have that nest egg theres a lot of work to do with this segment and that is their product that are designed for them with their input that are delightful and fun, not to mention helpful. Katie that is a great place to leave it. Really appreciate your time. Thanks to dor skuler, Intuition Robotics cofounder and ceo. We are about one hour or so into the trading day so lets get a check of the markets with abigail doolittle. Abigail lets take a look at the stocks because all eyes are on nvidias report yesterday. Earlier, down more than 1 of the possibility of aws affecting the numbers but now basically close to flat. Since the last report in february, the stock at a volatile time. It is up up about 13 but the alltime high has not been reached. We have a little bit of a divergence with the s p 500 and the nasdaq and other indexes that have hit record highs. The nasdaq 100 itself is essentially flat at this point, down ever so slightly. We have a little bit of a bid for yields so a neutral picture basically. Take a look at ether, up 8. 9 on the possibility of there being an ether etf. The spread between bitcoin and ether has narrowed. Over the last year, this is incredible. Take a look at the gains. This is the s p 500 over the last couple of days. Kind of volatile, but i am guessing this is a pretty narrow range. The bitcoin ether spread is coming on a little bit over the possibility of this etf. Katie thank you so much. Coming up, we will be joined by row el and will talk about the popularity of weight loss medications. That conversation coming up next. This is bloomberg. Abigail you are looking at a live shot of the principal room. Coming up, and interview with zoom cfo kelly steckelberg. This is bloomberg. Katie it is time now for the daily wall street week conversation and today we are taking a look at the growing demand for weight loss drugs. We are joined by zach reitano, ro ceo, along with wall street week host david westin. I believe we last spoke to zach three months ago and this continues to be one of the hottest topics. David we talked about it just about every day. Zach, it is good to talk to you. Give us an update. We were selling these compounded versions and you said there was a lot of appetite for them. Let me have a sense of two things. One, how much of your business are these compounds . Number two, at what rate is that growing your business . Zach first, thanks for having me on. The demand has been incredible and unprecedented across the entire health care industry. Ro does offer both branded options and compounded options. We offer insurance offers and we pursue what is best for the patient. Right now, the minority of our business are these compounded medications. That does evan flow depending on the shortage and what a patients preferences and insurance coverage. It is one of the fastestgrowing categories which i dont think comes as a surprise. Now, it has been about consistently adding more options for patients. When we started, we just offered ozempic, and others. Since we headed compounded, we will continue to add more and more options to increase access for patients. Katie i want to talk more about the compounded glp1 market. You think about the industry overall, how big is it in terms of dollar terms . Zach it is hard to say the exact dollar terms. What is interesting to me about the compounded market is compounding during a shortage is the market functioning exactly as it is intended. The fda has spoken very publicly about a Public Health challenge when there is a brittle supply chain and there are drug shortages. Theres a lot of reasons behind the implementations of the fda safety innovation act. To give the agency a greater purview over drug shortages and protect the supply chain for patients. Now, what we are seeing is the market responding to ensure that patients have access to treatment. Providers are relying on second line therapies, patients do not miss doses. Now, there are shortages for cancer drugs, diabetes drugs, obesity drugs which are far more than just obesity drugs. The higherlevel question that people will have related to compounded drugs really is about the quality. They are not fda approved, but what ro focuses on, ro works with registered and inspected pharmacies. Prior to every single batch being sent to a patient, it is rigorously tested by a third party. From initial all the way to fill and finish of that, it has been tested by third parties prior to being sent to a patient. What is fascinating is when ro first started, when we started with e. D. Treatment and viagra, there was a lot of illegal counterfeit medications, especially for e. D. , on the internet. The best disinfectant was sunlight, it was quality. We think theres a similar opportunity, which is we invest in incredibly fine quality experience which is why weve invested and partnered only with certain pharmacies that are registered and inspected. It is hard to say the exact market size of compounded overall. I do think it is much larger than people originally anticipated but i think that is because people have dramatically underestimated the demand for these products. They underestimate the majority of the population has obesity. I think people have started to realize but have historically underestimated the cascading impact of the drugs. They are not just obesity drugs or for cardiac cardiovascular disease. The efficacy of these drugs is increasing. Societys view of them is evolving and that will only increase demand and supply will have a harder time keeping up because i think demand is growing much faster than supply. That mismatch will continue to exist which is why outlets like compounding are so important for these medications. David as you know, some people have raised questions about the safety of these compounded drugs. I understand the fda has to regulate the manufacturing process but have not approve the ultimate drug themselves. In your experience at ro, has there been any safety issues reported . Zach one of the great features of ros platform is the ability to deliver really high quality at scale and have consistent touch points with patients and rigorously monitor from a data perspective our entire patient population. When a patient comes on and go through the online business, not only can they message their provider 24 7, they can have video calls and phone calls at their discretion, but we also require check ins at specific cadences determined by the provider. They able to measure and a very structured way across millions of patients across the platform, we are able to measure their progress from both a weight loss perspective a patient can come on and do what we refer to as reporting a side effect. When they do, they are reporting what side effect they are experiencing, the severity, the duration. They are doing it in a very structured way. Not only can we automate alerts and respond in real time and create structured tasks for a provider to review and provide counseling, but it provides the really great opportunity which is to ensure that regardless of the treatment that a patient is on, that theres no deviation from atypical side effects. What weve been able to see is a very consistent both from an efficacy perspective as well as a side effect perspective, we have been able to see consistency which goes to the investments and quality we have made. Every single batch prior to being sent to a patient is being sent to a third party, among other things, it is tested for several things. For us, investing in that quality, to ensure that experiences something we have been able to do. Katie when it comes to compounding, you mentioned a few minutes ago that you think about the lila and novo nordisk, they cannot make enough of these drugs to actually meet the demand. When it comes to your own business, when that is no longer the case, when we dont have the supply shortage, what does that mean for your business . Is that sustainable . Zach overall, ro is excited by the idea of a shortage. Shortages are not great for the Health Care System in general. They not only highlight the brittle supply chain that are industry has now, but it is most importantly a really bad experience for patients. When you have demand from these random drugs that is greater than supply and you dont have typical Inventory Management systems and a system that exists with all other ondemand products with every other in demand product, take an iphone you put yourself, on their list and get that iphone. You can continue to get that product and people move off that waitlist. The way our system is set up, it is a fight for patients every single month. If there is 5 million doses available, 7 million patients that have a prescription, that mismatch will continue every single month. For us, if supply increases to the point where patients are able to seamlessly access to medication, that is a good thing for ro. Ros business is aligned with our patients. The more Affordable Access they have, the more continued seamless access, the better. We started by offering branded medication that were covered by insurance. When you think about the current Insurance Options versus compounded, compounded is a great option for patients during certain situations but there are many instances where a branded option is better for a patient even from a cost perspective. We often talk about the cost of these drugs. 1000, 1500 a month, but there are 50 million americans in the u. S. That are covered for a prescription. The majority of them pay less than 100 for their copay. When you think about the number that are available you can run the numbers and we can talk about that, but theres probably enough drugs for about 5 Million People on the wagovy side. There are 10 times the number of people that are covered where their copay is less than 100. The amount of demand that exists is so significant, we dont anticipate and i think it would be hard for anyone to anticipate production increasing 10 times over the next five years. I think the shortage will last longer than people think. Overall, the more that it has more competition, 118 drugs in the pipeline, the more competition, the better for patients and the fewer shortages. That is better for ros business when patients have a better experience. Katie great to speak with you again. Zach reitano, the ceo of ro. David, who else do we have coming up . David paul krugman, we will talk to him about the state of the u. S. Economy and what the difference could be in the election coming up. That is coming up on friday. Katie thanks to david westin. This is bloomberg. Katie lets take a look at some stocks gaining highs and lows this morning. Eli lilly shares getting a 52week high after the drug maker in with a bostonbased startup to deliver targeted medications. Up 2. 8 . Commerzbank getting highs earlier after Morgan Stanley raised its target to 20 euros. Stay tuned to that one. We have burberry hitting a 52 week low after barclays lowered its price target on the stock, remaining cautious in the shortterm. Shares have fallen over 10 since it reported earnings last week with a week forecast. You can see shares down about 3. 8 over the last two days. Coming up on Bloomberg Technology, the cfo of zoom joins Caroline Hyde. That does it for bloomberg markets. Im Katie Greifeld and this is bloomberg. What about zocdoc . So many options. Yeah, and dr. Xichun even takes your sketchy insurance. Xichun, xichun, xichun youve got more options than you know. Book now. This is Bloomberg Technology with Caroline Hyde and ed ludlow. Caroline i am Caroline Hyde in new york. Ed ludlow is off. Coming up, baseless of reportingtsmc and asml down the keyq