Up there. Want to therefore get more of a take from state street Global Advisors managing , quantitative equity, olivia engel. Where do you said when it comes to some of the more beaten up overall names . Are they more of a risky bet . Should we be looking into the smaller caps . Olivia i think insurance is a good play because it is valuation. The risk emerged during the crisis and now looking a lot less because of the fed action. If the fed is looking to buy and support, that is probably good for them, and brings the risk down substantially. I guess there is a big difference between liquidity and solvency. The fed can create liquidity but cant actually force the economy to generate cash flow. There still is a limit to what the fed can do to Keep Companies solvent. Romaine that is a great point, and something that i think gets lost on a lot of people. I am wondering, specifically with your quantitative hat on, as you try to chart the strategy for your team, do you feel you are getting a clear enough read from the market data as to the true risks of a true valuations out there . That is a great question. Is best thing we can go on the longterm view and experience that the fundamentals of a company is what matters most. When markets start to focus on things getting far away from fundamentals, we think that is the opportunity to focus more, which can mean that things become a little uncomfortable from time to time but we think that is much safer and reliable as an investment strategy. I would say that the risks right now and that playbook of how to navigate the daytoday is extremely challenging no matter what models you deploy, even shortterm Market Sentiment is changing depending on a lot of different macro our most reliable way to get go forward riskadjusted returns is to keep the fundamentals in focus and definitely not ignore them. Taylor there was a lot of talk in 2008. I am wondering if this time ants can outperform, thehe signals are clear, if fundamentals are intact given the massive stimulus distorting a lot of these markets. I think time horizon matters. View, the better the fundamentals matter. Year 2000s in the when anybody focused on fundamentals was made to question whether fundamentals mattered at all. We all know how that ended. Caroline we do. Olivia, last question, is the u. S. Still the be all and end all . Olivia the u. S. Has got some great fundamental underpinnings drivers of performance growth. We still see a lot of good opportunities in u. S. Equities, particularly in the health care sector. Health care and tech have true cash flow driven earnings. Distinct evaluation opportunity and also sustainability of the earnings. We think it is much more solid in the health care sector. Topline revenue and bottomline earnings come health care and tech, you cant find a better market than the u. S. . Engel. E olivia that does it for the closing bell. Whatd you miss . Is next where we will be joined by carlisles David Rubenstein and the moderna ceo. This is bloomberg. Caroline from bloombergs World Headquarters in new york, i am caroline hyde. The markets staging a comeback. We were off by 2 . The s p 500 closed up. Federal reserve once again adding some exuberance to the market. And, that is despite the fresh outbreaks. Some states questioning the reopening while pharmaceutical Companies Continue to raise for rate vaccine. Leadership life. David rubenstein joins us with the modernity ceo. All that and much more coming up. Romaine u. S. Stocks resuming the rebound. Heretle bit of a selloff earlier in the day. Concerns about a potential second wave of the coronavirus. Becoming one of the biggest concerns of the market. Market bottoming tends to happen in three phases. More significant and quicker than i think many of us expected. The markets have clearly been buoyed by a massive amount of fiscal and monetary stimulus. If you add it up in the u. S. , over 40 of gdp, and markets will be looking for more. The size and pace of fed Balance Sheet expansion will put a floor under Global Equity markets. In the near term, volatility could be back in these markets until we see cases start to compress again. Romaine lets bring in the investment strategist at allianz investors. We saw markets had a pretty significant kneejerk reaction to this announcement by the fed that it would start buying individual corporate bonds. I am wondering, how surprised where you buy this announcement and do you think it will matter in the long run . Text for having me. Never a dull day. I think we were down about 5 last week in the s and p. The news today certainly added a floor to that pullback. More broadly, the fed has been supportive of credit and equity markets. But we have also seen this trend of elevated cash on the both in theost institutional space and in the retail space. What that really does, when we do get these pullbacks in the 5 , 10 range, a lot of these players that have perhaps missed some of these rallies are looking to get again. We saw that today is the risk reversed quite dramatically. We were down this morning and ended up up. I think we will continue to see similar patterns. Elevated volatility. But that will be looked at more opportunistically, broadly. Caroline what are the opportunities . Economy in bets of an reopening . Mona since midmay, we have had this rally really brought an out, driven by these cyclical reopening story stocks including sectors like the airlines, hotels, parts of the energy complex, financials, etc. Thehink that going forward, sectors will still participate. But we are saying, as you get your opportunities tactically, it is important to keep in mind some of those longerterm secular growth themes as well. Area of Technology Like the 5g cloud, fiber. Retailcare, than online broadly. All areas that we think are not oneyear stories, but 3, 5, even 10 year stories. Taylor i think the game changer today came at 2 00 p. M. When the fed talked about buying individual bonds. Should investors be surprised with the amount of cloud, the amount of weight, with the headline. Is that helpful, i guess, for investors to be aware of that . It is interesting. Certainly, we saw its of that in the 2008 crisis as well. But it took time for the fed to get all in. In this crisis, the fed has not only come all in, but at a speed we have not seen. They have already committed to unlimited qe, moving the race to the zero bound indefinitely, or at least through 2022. Bond buying, Municipal Bond buying, it always comes down to what more can they do . Fed outnews pushes the of the risk spectrum, going from buying etfs to individual securities. Of course, they have not made that move towards buying for example equities. Clearly, as they push themselves more out of the risk spectrum, more supportive of assets broadly. Keep in mind, the fed really has gdpin close to 30 of u. S. Into the market in terms of their Balance Sheet thus far. Romaine we wont get into some of the criticism of that. Im curious to your thoughts as to this idea of the fed does not really have to follow through early, it just has to convince the market that it will follow through. Doingch is this the fed what it says it will do or just being able to predict or have confidence that the fed has the capability to do what it will do . Mona it is partly the latter. Jerome powell has been consistently committed to making sure that credit markets are moving smoothly. Inhas also been consistent supporting broadly the economic recovery. He is clearly doing what it takes to put that in action. I think he realizes now that his commitment to doing so does help support markets. It has opened up a lot of Investment Grade and highyield markets. But even parts of the fixed income beyond that as well. I think it is important for the fed to make sure the credit markets are moving smoothly, operational, still liquid. That is a key goal for him. Is it going too far . We like the Retail Investor space more like the Retail Investor space . Mona we have seen a broadening of participation in the investor phase over this period. More people are at home, in front of their screens, and more people can participate through online Brokerage Firms like a robin hood program. Perhaps you could argue that it is beneficial in that there is more participation in the equity market. Now, the fed does provide an interesting backstop. They can come in midday, make an announcement, turn the sentiment in markets pretty broadly. Caroline do you think they did that on purpose . [laughter] mona the timing was certainly interesting. Had they come in midthursday when the market was down, it may have looked more questionable. But, today, we were in an orderly kind of sideways move. I dont know if that was their purpose today. But i think broadly they have also noted that while they can support the financial markets, they can certainly not support the real economy. Perhaps we are getting more of that as well. Caroline always wonderful to have your voice on with us. Taking this through the days trade, but also the week, the month. Thank you very much. Coming up, we will take a look at the latest on a covid19 vaccine and when experts think one will be available. This is bloomberg. Romaine welcome back. You are watching whatd you miss . We have been talking a lot about the race foray vaccine. Stocks have rallied over the past few months on anticipation that that vaccine might be coming. Taylor we have a great chart to illustrate that. Theeasingly, it is Companies Developing vaccines, antibody tests, that have really been the big out performers in the market. But, a vaccine may look different than what we think it might be. There is a new report that a vaccine may prevent symptoms of us getting really sick but it may not stop us from catching the virus. Off. Elcome dr. Wayne k dr. , there is a vaccine that maybe does not prevent us from getting it, is that still effective to you . Wayne sure. Just as background, i think the audience has to understand that that is how vaccines actually work. For all of the license of vaccines that we have, they work antibodies, and those antibodies are going to ensure that we dont get ill. A, it is very hard to have bar of a vaccine that is going to prevent infection. What you want to do is prevent disease. Caroline is that going to be effective enough . Of,e got the question mark it is important that it does not spread. But if we all know that we are not basically going to get the disease, does it make people too complacent too complacent, taking off those face mask, and they will still be infecting others. Wayne i think you have to take a step back and understand that unprecedented effort here in the vaccine field to be able to make a vaccine against this virus in the next 18 months. We have at least 100 of the experimental vaccines in development now. The animal models have shown us that in the majority of the cases, there is potential efficacy. So, i think it is a little early the leadingof candidates have just entered into Clinical Trials in the past couple of months and we dont have all of the data yet into people, so i think we will have to wait a little bit of time to get that. Romaine the lay people like myself, we are looking to this as a potential panacea, a way people can go about their daily lives. I wonder if you can draw some parallels for me, if at all, about the flu vaccines that we get every year, this idea that every year, scientists have to go back into the lab, tweak it. Is this what it will be like with a covid19 vaccine, should we get one . Wayne at this point, it is a little early to say. Influenza is a lot different in that the outer protein of the ,irus is really hyper variable which means that it changes its code. That is the reason that each year we have to get a new vaccine. Casedeal in the influenza is to have universal influenza is effective against all strains. This virus, it is mutating, but it is mutating extremely slowly. We dont think we will have the same kinds of issues that we have with flu. Taylor i am trying to find the positive Silver Linings in all this. Im curious, we still get a theine, new stove at infection but it prevents me from getting the full symptoms. Does this help with herd immunity because we have the antibodies in our system. That be seen as a positive here . Wayne i think, if we get a vaccine, it is going to be extremely positive. It is too early to say if the vaccine is going to be effective in terms of a complete and utter block of the infection, or it is going to allow a little bit of the infection and one is not going to have the disease. Either way, it is going to be a tremendous benefit. The the key frankly to ending of the pandemic. Youre right to remind us that vaccines are often not made in nearly the short timeframe. Also, it is very rare that a vaccine is 100 effective. Are there any iterations that your most her most hopeful of in terms of some of the work we are seeing in the u. K. Or in america. How are you feeling about this development . I am extremely optimistic about a lot of things in the vaccine effort. I think we will get a vaccine at the end of the day. The issues for me, will it be 80 effective, 60 effective, 98 effective . We dont know. Is the protection going to last for over a year . We dont know that either. Is the vaccine going to work as well in some of the populations that are really at risk of this disease like the elderly . If you take the case of the influenza vaccine, those are not working as well in the elderly. The annual efficacy of that vaccine is on the order of 50 . I think with this one, we have to do a lot better. Romaine when we started off for your introduction talking about some of the stocks that had rallied on anticipation of a possible vaccine, there is a lot of concern in the public that this vaccine sort of needs to be put out in a way that is cheap, accessible, and that it needs to be done globally, that we cant just have this sheltered in the borders of whatever country creates it. Do you expect that we will see crossborder participation as well as some kind of movement to make sure it is affordable . Wayne i do anticipate that. This is an unbelievable exercise where it is a partnership of academia, government and ngos. At the end of the day, as soon as we get a signal of the efficacy of the initial vaccine, i think there is going to be a shift in the thinking in terms you have institutions such as the World Health Organization where this is a principal issue. I am optimistic at the end of the day that we are going to have a vaccine. I am also optimistic that it will be delivered across borders. I am less optimistic it is going to work well in all of the populations at risk. Caroline thank you. Up next, we discussed more about vaccines with the moderna ceo. Withine leadership live David Rubenstein is underway with none other than moderna ceo stephane bancel. David he is the ceo of moderna. Welcome. Thank you for coming today. You are one of the five companies that the United States government, through its National Institutes of health, is backing to help get a covid19 virus prepared and distributed as soon as possible. Today, what would you say is the prospect for a vaccine to be prepared and ready for distribution sometime early next year . Think the chances are pretty high. I think where we got lucky, if anyone can use the word lucky for this pandemic, it is that the virus is not too complicated. Hiv was discovered in the 1980s and we still do not have a vaccine. The scientific and medical community i think there is a high probability that several vaccines will make it to the finish line. It could be as early as the end of the year or early next year. David what the government has done in this operation warp speed, to say to five companies, you are the ones we are picking because he think you have the best chance. Astrazeneca,nson, merck, and also pfizer. They are the ones. Those companies, johnson astrazeneca,k, they are giants in the pharmaceutical world. Madera is a Small Company moderna is a Small Company, only 10 years old. How did you get here so quickly . Stephane we have a platform. A moleculeis we use ween dna in your cells what we can do is we can basically use instructions. These enable us to do actually nine vaccines in the clinic before this one. This is why we are going to grow so fast. Startedhe company was , you werego originally recruited to go on one year later, they made you the ceo. Was that your plan . Stephane i was at the time running a public company, a Global Leader in diagnostics for Infectious Disease. I was before at eli lilly. Of moderna was the founder and ceo of flagship ventures. He approached me and was like, come on the board and help us out. As i got to see the company and know the technology, i began to believe that it was possible that this company could be a big disruption to the entire pharmaceutical industry. Ceo andd to resign as join moderna. By your accent, i can tell you are not from massachusetts originally. So you moved over, you are now headquartered in cambridge. In the biotech world, you have done a lot of publicity. You have raised more money. When you went public, in 2018, and evaluation of 7. 5 billion, the highest valuation ever for a Biotech Company ipo. You had not yet had any fda approvals for your technology. The fact that we are the platform. , if theyech Companies Get the product moving ,uccessfully to a clinic imagine which is the next product. Useur case, because we either human dna, rna of a virus. Basically, we are a Technology Company doing virology. Our investors understood from an itday that it made would be either dozens and dozens or zero because it is a platform. David it was analogized to microsoft. If you think about it, all the biology is written in the code of four letters. Software, zero and one. All instructions for every protein in the world, virus, bacteria, plants, mammals, humans of course. David these are the letters from the genes. Stephane correct. So what we are looking at is how to make these into a drug. So you will make the protein that we designed in our factory. David for people who have not obsessed over vaccines when they got their polio vaccine or maybe annual flu vaccine, it is about a 35 billion annual business. About four Companies Make 80 of all the vaccines. It is not considered to be a very profitable business generally because you make one vaccine per year and that is not a great business. Stephane i think that is a perception that a lot of people have. Three types of vaccines. People look at them together. Public health, Infectious Disease in latin america, africa, europe. The prices is very low. Then you have some very innovative vaccines. Those businesses. A few examples. A vaccine against pneumonia. It is the number one product of pfizer. More than 6 billion. It was launched in 2000, 20 years ago. 50 ofre it is more than the margin and they are going to sell it forever. David so for people who dont really focus on vaccines manufacturing, distribution, and development, lets go through this. The polio vaccine i got when i was a little boy came through the discovery of dr. Salk and also dr. Savin. T or dead an iner virus from the polio and injected it into you. Is that the theory . Stephane that is correct. David why dont you just do that with covid19 . Why dont they get the in art or in active virus and inject it into people . Stephane some people are trying to do that. First, you have to do a lot of work to find the right dose. It is not as strong as a lot. F optimization virus requires a lot of time to get this work done. The technology is ok for healthy people. It does not work well for people who are immunocompromised. David with that technology, the polio technology, the problem is that if you dont know what the could hurtis, you somebody. I read that you were sitting at a beach in france and you write about this problem in china and thought this is something i need to work on. Is that fair or accurate . I wasne stephane having breakfast, reading the wall street journal on my ipad, and i saw this article about risk in china. Because i have been working in Infectious Disease for 25 years and we have been partnering with. He division of nih a bacteria or a virus. Around january 10, a sequence of a new coronavirus was put online. From that point on, we decided to get it to the clinic. David you start working on this and you have a lot of scientists. You said to the scientists, ok, we will solve this problem. Go to work and call me when you get the solution. Is that how it works . Stephane a bit more complicated, but yes, we basically agreed they should work on it. The nih team spent a few days looking at the genetic sequence. The structure of a protein of a virus. Jointlydiscredit decided what vaccine we would design. So, niaid, the National Institute for allergies and Infectious Diseases, part of the nih. So you realized you might have a potential solution but you then have to test them on animals i guess first. Did you test this on an animal . We did everything on a crash course. We made some material to do animal testing, which takes a few days. The product of a phase i, which took us 42 days, which is a short time in our industry. When they did the vaccine for sars, it took them 20 months. In this case, it took 63 days. What animals do you use . Stephane mice. David so the mice presumably did not die as a result so you said, we will try it on humans. You issued a report not long ago that said i think eight humans had received it and they seemed to be ok. Is that right . Stephane 45 people went through a phase one, doing ok for safety. A few people at the second dose. Neutralizing antibodies, this is what you look for. You can look in their blood through sensitive tech aches to do we have an antibody that will bind and neutralize the virus so it cannot replicate in your body . The virus has to use your own body to replicate. When you get too much virus, called a viral load. What you want in your body is to educate your immune system so when a virus gets in your body, your body will be trained for a vaccine. The vaccine you are toeloping, is it designed mitigate the problems if they do get it . Stephane to prevent disease. Phase three, the primary endpoint for efficacy, is prevention of disease. Infection, but you get no disease, it is ok. Nowsecondary objective is infection. Youill of course prefer have no infection as well. But the number one priority is to make sure you have no disease. Because most people die from disease rather than infection. David how many humans are involved in a phase two test . Stephane in case, 600. David how do you get these 600 people . Stephane you select Clinical Trial sites, posted online at the clinicaltrial. Gov website. People can look it up and join. All of those clinical sites will people,atabase of oncology for example, military base. Say, we have this new vaccine, are you interested to participate . David so why does somebody volunteer for ray vaccine if it is for a vaccine if it is experimental . Stephane most people do it for the common good. Some people do it for a bit of money. The money is hundreds of dollars, not a bounty price or Something Like this. Most people do it for the right thing, to help society, help science. If you look at the state of , allowed for the past 5, 10 years. Ago, 30 years ago. Serious safety events. Manufacturers. Phase two will be completed when . Stephane the data we are looking for for safety. I would say august, latest in early september. David you get results youre happy with, do you have to ask the fda for moving to phase three . Stephane we need fda approval to move forward. What we do with the fda and manufacturer of the vaccine, we are moving to the next stage of testing we do not wait for efficacy. Inse three should start july. Two. Arted phase we move as fast as we can because of the pandemic. David how many people are in phase three . Be 5050 it will placebo control, meaning 100 meaning half the people get the real vaccine. We will look at how many people will get infected. The 30,000 is very important us two things. S you could have hundreds of millions of people around the world. Vaccinated with this vaccine. So safety is very important. Two, we dont know where the virus will be. So byd people infected, doing so many people, we will have sites all around the u. S. In boston, new york, san francisco, so that we have enough efficacy regardless of. Eography the efficacy would be on a much phase threevid would be completed by when . Stephane we could have efficacy data by thanksgiving, the best timeline. That assumes 50 more things go right. It is possible that we put out that efficacy data by thanksgiving. David lets suppose you get the efficacy data by thanksgiving and it is good. With the fda say, lets go. Itld they advise you to have out in the public then . Stephane making sure we are comfortable with the safety, efficacy. To give usdecide emergency use approval for people at very high risk. Health care workers, the elderly, people with comorbidity. Benefiting those with highest risk before you can give it to the entire population. Three other aspects i want to cover. Is manufacturing, two three is distribute them. The manufacturing, the Company Selected by the National Institutes of health, manufacture it while you are working on it, is that right . Stephane we are scaling up a processed and making products for potential use if approved. Make asause we need to much as we can. , e wait david that has never happened before, as it . Stephane no, because of financial risks. It is ok, you can distribute this to people, how many will you likely have by the end of the year if this gets approval . Stephane we are on a ramp to be able to 100 million already. David will those go to people in the United States first or people all over the world . Stephane a partnership with one manufacturers of products in the world. In the u. S. , moderna has a factory. We have a factory in new hampshire. Should be up and running in july. We should have enough capacity to cover the u. S. Population. What we will do in europe, the swiss plant, is make product for people outside of the u. S. David what is it going to cost people . Who decides the pricing . Will it be complicated and controversial whatever the price is . Stephane the price, we are so far focused on getting the price wherever we could safely. Think other products before in this pandemic, those need to be sold at a fair price. Manufacturer cannot give it away in the street but the ufacturer has to commit the diagnostic companies to the state,ent, federal, insurance. A typical product they would sell over virus. We have to make sure the vaccine is affordable, comparable to commercial vaccines. David the government has provided you with lots of money to help you move this forward, so how will the government get compensated for what they have done to help you . Stephane that is basically the mindset that we have. We want to be very fair. The taxpayer money, we are very thankful and appreciate if appreciative for the help we got when it was very risky. David the other four that are also getting money from the government, do you call them up every day and trade those with them . Or is it a race to the finish. Stephane first, it is a race against the virus, not a race against each other. The companies are talking together. We have a government. Data and plans. About how me ask you iu are managing this process assume you can go to your office, do anything you want, you dont have to be at home, or do you work from home like everybody else . Stephane i spend a lot of time at home. I work at the office from time to time. I go back on wednesday. We are trying to reduce risk for people in moderna who have to be in the office. People in the labs and factory who cannot be at home. We are asking people who can be at home to work from home as much as they can. Could bring the virus into a team and contaminate the team, which would be really bad. What isessenger mra, unique is that it is a synthetic created,na that you you injected into a cell, and it is therefore less dangerous than a soft vaccine type of thing . Stephane we never give you a virus. We give you an instruction set in a molecule that we inject in a muscle. You enable one of yourselves to make insulin and growth hormone. To read allre going instructions and make ondemand between, the s spike protein of a virus. It will show that protein to your white blood cells, immune system. Antibodyng to make an so it is trained so that if you are infected later, your body will be trained to neutralize it. David there is a first for everything but this would be the first time messenger rna would be approved caroline what a great conversation. Leadership live with David Rubenstein, and it continues with stephane bancel. That is all for whatd you miss . Romaine this is bloomberg. [ sigh ] not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. Ask about saving up to 1500 on your installation. Emily welcome to bloomberg technology. Stocks ended the day slightly higher after a volatile day of trading. Up after the company told congress it will cooperate in a congressional investigation into the power of amazon, making jeff bezos available to testify if necessary. This i
comparemela.com © 2020. All Rights Reserved.