Thoughts on the Market

Original Release on February 6th, 2023: As new gene therapies are researched, developed and begin clinical trials, what hurdles must genetic medicine overcome before these therapies are commonly available? Head of U.S. Pharmaceuticals Terence Flynn and Head of U.S. Biotech Matthew Harrison discuss. ----- Transcript -----Terence Flynn: Welcome to Thoughts on the Market. I'm Terence Flynn, Head of U.S. Pharma for Morgan Stanley Research. Matthew Harrison: And I'm Matthew Harrison, Head of U.S. Biotech. Terence Flynn: And on this special episode of Thoughts on the Market, we'll be discussing the bold promise of genetic medicine. It's Monday, February 6th, at 10 a.m. in New York. Terence Flynn: 2023 marks 20 years since the completion of the Human Genome Project. The unprecedented global scientific collaboration that generated the first sequence of the human genome. The pace of research in molecular biology and human genetics has not relented since 2003, and today we're at the start of a real revolution in the practice of medicine. Matthew what exactly is genetic medicine and what's the difference between gene therapy and gene editing? Matthew Harrison: As I think about this, I think it's important to talk about context. And so as we've thought about medical developments and drug development over the last many decades, you started with pills. And then we moved into drugs from living cells. These are more complicated drugs. And now we're moving on to editing actual pieces of our genome to deliver potentially long lasting cures. And so this opens up a huge range of new treatments and new opportunities. And so in general, as we think about it, they're basically two approaches to genetic medicine. The first is called gene therapy, and the second is called gene editing. The major difference here is that in gene therapy you just deliver a snippet of a gene or pre-programmed message to the body that then allows the body to make the protein that's missing, With gene editing, instead what you do is you go in and you directly edit the genes in the person's body, potentially giving a long lasting cure to that person. So obviously two different approaches, but both could be very effective. And so, Terence, as you think about what's happening in research and development right now, you know, how long do you think it's going to be before some of these new therapies make it to market? Terence Flynn: As we think about some of the other technologies you mentioned, Matthew, those took, you know, decades in some cases to really refine them and broaden their applicability to a number of diseases. So we think the same is likely to play out here with genetic medicine, where you're likely to see an iterative approach over time as companies work to optimize different features of these technologies. So as we think about where it's focused right now, it's being primarily on the rare genetic disease side. So diseases such as hemophilia, spinal muscular atrophy and Duchenne muscular dystrophy, which affect a very small percentage of the population, but the risk benefit is very favorable for these new medicines. Now, there are currently five gene therapies approved in the U.S. and several more on the horizon in later stage development. No gene editing therapies have been approved yet, but there is one for sickle cell disease that could actually be approved next year, which would be a pretty big milestone. And the majority of the other gene editing therapies are actually in earlier stages of development. So it's likely going to be several years before those reach the market. As, again as we've seen happen time and time again in biopharma as these new therapies and new platforms are rolled out they have very broad potential. And obviously there's a lot of excitement here around these genetic medicines and thinking about where these could be applied. But I think before we go there, Matthew, obviously there are still some hurdles that needs to be addressed before we see a broader rollout here. So maybe you could touch on that for us. Matthew Harrison: You're right, there are some issues that we're still working through as we think about applying these technologies. The first one is really delivery. You obviously can't just inject some genes into the body and they'll know what to do. So you have to package them somehow. And there are a variety of techniques that are in development, whether using particles of fat to shield them or using inert viruses to send them into the body. But right now, we can't deliver to every tissue in every organ, and so that limits where you can send these medicines and how they can be effective. So there's still a lot of work to be done on delivery. And the second is when you go in and you edit a gene, even if you're very precise about where you want to edit, you might cause some what we call off target effects on the edges of where you've edited. And so there's concern about could those off target effects lead to safety issues. And then the third thing which we've touched on previously is durability. There's potentially a difference between gene therapy and gene editing, where gene editing may lead to a very long lasting cure, where different kinds of gene therapies may have longer term potential, but some may need to be redosed. Terence, as we turn back to thinking about the progress of the pipeline here, you know, what are the key catalysts you're watching over 23 and 24? Terence Flynn: You know, as everyone probably knows, biopharma is a highly regulated industry. We have the FDA, the Food and Drug Administration here in the U.S., and we have the EMA in Europe. Those are the bodies that, you know, evaluate risk benefit of every therapy that's entering clinical trials and ultimately will reach the market. So this year we're expecting much of the focus for the gene editing companies to be broadly on regulatory progress. So again, this includes completion of regulatory filings here in the U.S. and Europe for the sickle cell disease drug that I mentioned before. And then something that's known as an IND filing. So essentially what companies are required to do is file that before they conduct clinical trials in humans in the U.S. There are companies that are pursuing this for hereditary angioedema and TTR amyloidosis. Those, if successful, would allow clinical trials to be conducted here in the U.S. and include U.S. patients. The other big thing we're watching is additional clinical data related to durability of efficacy. So, I think we've seen already with some of the gene therapies for hemophilia that we have durable efficacy out to five years, which is very exciting and promising. But the question is, will that last even longer? And how to think about gene therapy relative to gene editing on the durability side. And then lastly, I'd say safety. Obviously that's important for any therapy, but given some of the hurdles still that you mentioned, Matthew, that's obviously an important focus here as we look out over the longer term and something that the companies and the regulators are going to be following pretty closely. So again, as we think about the development of the field, one of the other key questions is access to patients. And so pricing reimbursement plays a key role here for any new therapy. There are some differences here, obviously, because we're talking about cures versus traditional chronic therapies. So maybe Matthew you could elaborate on that topic. Matthew Harrison: So as you think about these genetic medicines, the ones that we've seen approved have pretty broad price ranges, anywhere from a million to a few million dollars per patient, but you're talking about a potential cure here. And as I think about many of the chronic therapies, especially the more sophisticated ones that patients take, they can cost anywhere between tens of thousands and hundreds of thousands of dollars a year. So you can see over a decade or more of use how they can actually eclipse what seems like a very high upfront price of these genetic medicines. Now, one of the issues obviously, is that the way the payers are set up is different in different parts of the world. So in Europe, for example, there are single payer systems for the patient never switches between health insurance carriers. And so therefore you can capture that value very easily. In the U.S., obviously it's a much more complicated system, many people move between payers as they switch jobs, as you change from, you know, commercial payers when you're younger to a government payer as you move into Medicare. And so there needs to be a mechanism worked out on how to spread that value out. And so I think that's one of the things that will need to evolve. But, you know, it's a very exciting time here in genetic medicine. There's significant opportunity and I think we're on the cusp of really seeing a robust expansion of this field and leading to many potential therapies in the years to come. Terence Flynn: That's great, Matthew. Thanks so much for taking the time to talk today. Matthew Harrison: Great speaking with you, Terrence. Terence Flynn: As a reminder, if you enjoy Thoughts on the Market, please take a moment to rate and review us on Apple Podcasts app. It helps more people to find the show.

As investors focus on the risks of debt, can Emerging Markets combat pressure from wide fiscal deficits? Global Head of Fixed Income and Thematic Research Michael Zezas, Global Head of EM Sovereign Credit Strategy Simon Waever and Global Economics Analyst Diego Anzoategui discuss.----- Transcript -----Michael Zezas: Welcome to Thoughts on the Market. I'm Michael Zezas, Morgan Stanley's Global Head of Fixed Income and Thematic Research. Simon Waever: I'm Simon Waever, Morgan Stanley's Global Head of EM Sovereign Credit Strategy. Diego Anzoategui: And I'm Diego Anzoategui from the Global Economics Team. Michael Zezas: And on this special episode of Thoughts on the Market, we'll discuss how emerging markets are facing the pressures from rising debt levels and tougher external financing conditions. It's Wednesday, March 22nd at 10 a.m. in New York. Michael Zezas: The bank backdrop that's been unfolding over the last couple of weeks has led investors in the U.S. and globally to focus on the risks of debt right now. Emerging markets, which have seen sovereign debt levels rise in part due to the COVID pandemic, is one place where debt concerns are intensifying. But our economists and strategists here at Morgan Stanley Research believe this concern is overdone and that there might be opportunities in EM. Diego, can you maybe start by giving us a sense of where debt levels are in emerging markets, post-COVID, especially amidst rising interest rates globally? Diego Anzoategui: The overall EM debt to GDP ratio increased 11% from 2019, reaching levels above the 60% mark in 2022. Just a level, leveled by some economists, that's a warning sign because of its potential effects on the growth outlook. But without entering the debate on where this threshold is relevant or not, there is no doubt that the increase is meaningful and widespread because nearly every team has higher debt levels now. And broadly speaking, there are two factors explaining the rise in EM debt. The first one is a COVID, which was a hit on fiscal expenditure and revenues, overall. Many economies implemented expansionary fiscal policies and lockdowns caused depressed economic activity and lower fiscal revenues. The second one is the war in Ukraine, that caused a rise in oil and food commodity prices, hitting fiscals in economies with government subsidies to energy or food. Michael Zezas: And, Simon, while most emerging markets continue to have fiscal deficits wider than their pre-COVID trends, you argue that there's still a viable path to normalization against the backdrop of global economic conditions. What are some risks to this outlook and what catalysts and signposts are you watching closely? Simon Waever: Sure. I'm looking at three key points. First, the degree of fiscal adjustment. I think markets will reward those countries with a clear plan to return to pre-pandemic fiscal balances. That's, of course, easier said than done, but at least for energy exporters, it is easier. Second market focus will also be on the broader policy response. Again, I think markets will reward reforms that help boost growth, and inbound investment. It's also important as central banks respond to the inflation concerns, which for the most part they have done. And then I think having a strong sustainability plan also increasingly plays a role in achieving both more and cheaper financing. Third and lastly, we can't avoid talking about the global financial conditions. While, of course that's not something individual countries can control, it does impact the availability and cost of financing. In 2022, that was very difficult, but we do expect 2023 to be more supportive for EM sovereigns. Michael Zezas: And with all that said, you believe there may be some opportunities in emerging markets. Can you walk us through your thinking there? Simon Waever: Right. So building on all the work Diego and his team did, we think solvency is actually okay for the majority of the asset class, even if it has worsened compared to pre-COVID. Liquidity is instead the weak spot. So, for instance, some countries have lost access to the market and that's been a key driver of why sovereign defaults have picked up already. But looking ahead, three points are worth keeping in mind. One, 73% of the asset class is investment grade or double B rated, and they do have adequate liquidity. Two, for the lower rated countries valuations have already adjusted. For instance, if I look at the probability of default price for single B's, it's around double historical levels already. And then three, positioning to EM is very light. It actually has been for the last three years. So these are all reasons why we're more upbeat on EM longer term, even if near-term, it'll be driven more by a broader risk appetite. Michael Zezas: And Simon, what happens to emerging markets if, say, developed market interest rates move far beyond current expectations and what we in Morgan Stanley research are currently forecasting? Simon Waever: In short, it would be very difficult for EM and I would say especially high yield to handle another significant move higher in either U.S. yields or the U.S. dollar. As I mentioned earlier, market access for single B's needs to return at some point in 2023 as countries already drew down on alternative funding sources. And even within the IG universe, it would make debt servicing costs much higher. Michael Zezas: And Diego, when you look beyond 2023, what are you focused on from an economics perspective? Diego Anzoategui: Beyond 2023, we're going to focus on fiscal balances mainly. The expenditure side of the equation has broadly normalized after COVID. So it's currently at pre-COVID levels. But the revenue side of the economy is lagging, so its revenues are below pre-COVID trends. So we're going to be focused on the economic cycle to check where revenue picks up again to pre-COVID levels. Michael Zezas: And, last question Simon, which countries within emerging markets are you watching particularly closely? Simon Waever: So overall, the investment grade and double B rated countries are largely priced for a more benign outlook already, which we agree with. But I would highlight Brazil as an exception, as one place that's not pricing the fiscal risks ahead. For the lower rated credits, I would highlight Egypt, Nigeria and Kenya as key countries to watch. They are large index constituents, still have relatively high prices and they all have upcoming maturities. Pakistan and Tunisia are at even higher risk of being the next countries to see a missed payment, but the difference here is that they're also priced much more conservatively. Michael Zezas: Well, Simon, Diego, thanks for taking the time to talk. Simon Waever: Great speaking with you, Mike. Diego Anzoategui: Great talking to you, Mike. Michael Zezas: As a reminder, if you enjoy Thoughts on the Market, please take a moment to rate and review us on the Apple Podcasts app. It helps more people find the show. 

Against the backdrop of volatility in the banking sector, tightening in consumer and commercial credit may have far-reaching impacts for economic growth.----- Transcript -----Welcome to Thoughts on the Market. I'm Vishy Tirupattur, Chief Fixed Income Strategist here at Morgan Stanley. Along with my colleagues, bringing you a variety of perspectives, I'll be talking about the impact of the current volatility in the banking sector on credit. It's Tuesday, March 21st at 11 a.m. in New York. On the back of the developments over the last two weeks, our banking analysts see a meaningful increase in funding costs ahead, which should lead to tighter lending standards, lower loan growth and wider loan spreads. Our economists were already expecting a meaningful slowdown in growth and job gains over the coming months, and the prospect of incremental tightening of credit conditions raises the risk that a soft landing turns into a harder one. According to the U.S. Small Business Administration, small businesses are those that employ fewer than 500 workers, and between 1995 and 2021, they accounted for nearly 63% of the net new job creation. Today, nearly 47% of all private sector employees work at small businesses. In the banking sector, small banks account for 38% of total loans in the U.S. and 30% of commercial and industrial loans. Businesses rely on C&I loans for short term funding of activities such as hiring, paying workers, purchasing supplies, equipment and building inventories. We now expect this C&I lending to slow down the most based on our prior experience. We also expect that lending to commercial real estate sector to decline given the stresses that are building over there. On the other hand, we are looking for lending to consumer to grow, but more slowly than what we thought before. Beyond their normal lending activity, banks enable credit formation in the economy by being buyers of senior tranches of securitized credit, providing senior leverage to securitization vehicles, which is a major source of credit formation. Well, we don't exactly know how bank regulations will change in response to the developments of last two weeks, there is the potential for bank sponsorship of securitized credit to diminish and thus indirectly affect credit formation. From a corporate bond investor perspective, the view has been that the banking sector fundamentals have been in a good place, and last year's underperformance versus non financials was largely a technical story. The developments of the last two weeks have undermined this thesis. Looking beyond the near-term uncertainty, we believe that the supply risks in bank credit are now skewed to the upside. The emphasis on funding diversity shifting away from deposits to wholesale funding is likely to keep regional bank issuance elevated for much longer. While the Bank Term Funding Program (BTFP) may alleviate the urgency to issue these bonds, it by no means provides a permanent solution. So looking beyond the near-term uncertainty, new assurance from banks, regional banks in particular, is likely to persist. Given that the sector was a consensus overweight and is also likely to see more supply when markets normalize, we see continued volatility and increased tiering within bank credit. Thanks for listening. If you enjoy the show, please leave us a review on Apple Podcasts and share Thoughts on the Market with a friend or colleague today.

As markets look to recent bank failures, how are valuations for both stocks and bonds likely to change with this risk to growth?----- Transcript -----Welcome to Thoughts on the Market. I'm Mike Wilson, Chief Investment Officer and Chief U.S. Equity Strategist for Morgan Stanley. Along with my colleagues, bringing you a variety of perspectives, I'll be talking about the latest trends in the financial marketplace. It's Monday, March 20th at 11 a.m. in New York. So let's get after it. Over the past few weeks, the markets have fixated on the rapid failure of two major banks that, up until very recently, have been viewed as safe depository institutions. The reason for their demise is crystal clear in hindsight, and not that surprising when you see the interest rate risk these banks were taking with their deposits, and the fact that the Fed has raised rates by five percentage points in the past year. The uninsured deposit backstop put in place by the Fed and FDIC will help to alleviate further major bank runs, but it won't stop the already tight lending standards across the banking industry from getting even tighter. It also won't prevent the cost of deposits from rising, thereby pressuring net interest margins. In short, the risk of a credit crunch has increased materially. Bond markets have exhibited volatility around these developments as market participants realize the ramifications of tighter credit. The yield curve has steepened by 60 basis points in a matter of days, something seen only a few times in history and usually the bond market's way of saying recession risk is now more elevated. An inversion of the curve typically signals a recession within 12 months, but the real risk starts when it re-steepens from the trough. Meanwhile, the European Central Bank decided to raise rates by 50 basis points last week, despite Europe's own banking issues and sluggish economy. The German bund curve seemed to disagree with that decision and steepened by 50 basis points, signaling greater recession risk like in the U.S. If growth is likely to slow further from the incremental tightening in the U.S. banking system and the bond market seems to be supporting that conclusion, why on earth did U.S. stocks rally last week? We think it had to do with the growing view that the Fed and FDIC bail out of depositors is a form of quantitative easing and provides a catalyst for stocks to go higher. While the $300 billion increase in Fed balance sheet reserves last week does re liquefy the banking system, it does little in terms of creating new money that can flow into the economy or markets, at least beyond a brief period of, say, a day or a few weeks. Secondarily, the fact that the Fed is lending, not buying, also matters. If a bank borrows from the Fed, it's expanding its own balance sheet, making leverage ratios more binding. When the Fed buys a security outright, the seller of that security has more balance sheet space for renewed expansion. That is not the case in this situation, in our view. As of Wednesday last week, the Fed was lending depository institutions $300 billion more than it was the prior week. Half was primary credit through the discount window, which is often viewed as temporary borrowing and unlikely to translate into new credit creation for the economy. The other half was a loan to the bridge the FDIC created for the failed banks. It's unlikely that any of these reserves will transmit to the economy as bank deposits normally do. Instead, we believe the overall velocity of money in the banking system is likely to fall sharply and more than offset any increase in reserves, especially given the temporary emergency nature of these funds. Over the past month, the correlation between stocks and bonds has reversed and is now negative. In other words, stocks go down when rates fall now and vice versa. This is in sharp contrast to most of the past year when stocks are more worried about inflation, the Fed's reaction to it and rates going higher. Instead, the path of stocks is now about growth and our belief that earnings forecasts are 15 to 20% too high has increased. From an equity market perspective, the events of the past week mean that credit availability is decreasing for a wide swath of the economy, which may be the catalyst that finally convinces market participants that valuations are way too high. We've been waiting patiently for this acknowledgment because with it comes the real buying opportunity, which remains several months away. Thanks for listening. If you enjoy Thoughts on the Market, please take a moment to rate and review us on the Apple Podcasts app. It helps more people to find the show.

As Europe commits to net-zero carbon emissions by 2050, one hurdle will be the energy emissions caused by buildings’ operations. What investment opportunities might come from energy renovation? European Building and Construction Equity Analyst Ceder Ekblom and European Property Analyst Sebastian Isola discuss. ----- Transcript -----Cedar Ekblom: Welcome to Thoughts on the Market. I'm Cedar Ekblom, Equity Analyst covering European Building and Construction for Morgan Stanley research. Sebastian Isola: And I'm Sebastian Isola from the European Property Team. Cedar Ekblom: On this special episode of Thoughts on the Market, we'll discuss Europe's commitment to building energy efficiency. Cedar Ekblom: Sebastian when I talk to investors and talk about energy emissions, most people immediately think of cars and transportation. But according to the International Energy Agency, in 2021 the operation of buildings accounted for 30% of global final energy consumption and 27% of total energy sector emissions. That's a huge number. A lot of people don't realize that. So it's clear that decarbonizing building stock is essential to achieving a net zero by 2050 scenario. Sebastian, we recently wrote about this and with this big goal in mind, can you give us an overview of where Europe is right now and what the biggest opportunities are that you see? Sebastian Isola: I think to start, Europe's building stock is old and inefficient. More than 40% was built before 1970 when the first energy efficiency standards were introduced, and we're currently renovating just 1% of building stock a year. The European Commission thinks that this needs to at least double to meet its 2030 target for a 55% cut in emissions. If we successfully lift innovation spend, there is a big opportunity for makers of solar, heating and ventilation equipment, building automation, energy efficient lighting, and any product linked to the building envelope from insulation to roofing and windows. Cedar Ekblom: So it sounds like there's great opportunity here, but investors often push back with the argument that energy renovation is a 'hope' rather than a reality. What are your views on the economics of investment? Sebastian Isola: I think firstly, I'd say that our alphawise survey gives us a proprietary insight into what's really happening on the ground. It confirms renovation spend is on the rise, there was a 10% increase in the number of people that renovated their homes to save energy in 2022 versus 2021. Secondly, for commercial property landlords, the economics of investment is clear. Green buildings are attracting higher rents, and in some markets, office buildings with sustainability ratings are being awarded materially higher valuations, sometimes more than a 20% premium. And Cedar, what are the key renovation categories and what is the driving motivation behind them? Cedar Ekblom: Well, if you talk to anyone in the industry, they'll tell you that fabric first is where we need to start. So what does that actually mean? We have to look at improving the insulation of the walls, the roofs, and looking at new windows and doors. And the reason why we need to prioritize this is ultimately space heating accounts for about two thirds of total energy consumption. The good thing is that our survey told us that in the nonresidential market, these types of investments are the ones being prioritized. Installation is expected to be one of the key renovation categories for 2023. Building managers told us that they plan to boost spend on installation by 8%. After upgrading the building envelope, you need to think about tackling HVAC equipment and rolling out building automation. And finally solar continues to rank as the most attractive for residential energy renovation upgrades. In terms of the motivations, 59% of consumers and building managers say that lowering energy costs was the biggest driver for investment. I think that ultimately makes sense when we think about the landscape of the energy market in Europe over the last 12 months with the big increases in gas and electricity prices. Sebastian Isola: And with that in mind Cedar, what's your near-term and longer term outlook for renovation spend? Cedar Ekblom: Well, look, the runway for investment is huge. The European Commission estimates that an additional €275 billion of investment in building energy efficiency is required annually to 2030. And that's only an interim goal. If we really want to reach a 2050 net zero ambition, the optionality for investment means that we could be looking at more than €5.9 trillion of spend. If we deliver that total construction spend in real terms would run at 3% annually. That's a big increase from the less than 1% average growth over the last 10 years. Now, Sebastian, we've obviously spoken about the potential for fantastic investment, but there's obviously some big barriers around actually driving this uplift. How is the region trying to tackle these types of hurdles? Sebastian Isola: I think the biggest barriers are funding and skills and there's a 'carrot and stick' approach to funding. Government subsidies are coming through, although maybe slightly slower than we'd like. The good news is that private investment really is ramping up, and that's partly driven by better economics, but also new penalties which make letting inefficient buildings less profitable. In the UK, if we use that as an example, you need to achieve an EPC rating of B or higher by 2030 to be able to let your building. To put that in context, 75% of commercial properties in the UK currently don't meet that EPC standard. So there's going to be a huge scale of renovation required for commercial property in the UK to be brought up to that standard by 2030. And that really is going to drive investment in commercial property and in energy renovation. The second challenge is skills. It's not an easy problem to fix, especially when the construction industry is already challenged by a lack of skilled labor. The EU is taking an important step to address these hurdles by introducing the Energy Performance of Buildings Directive. This sets a region wide energy efficiency standard and harmonizes how buildings are ranked. It was passed into law in February of this year and we think it sets the framework for a multi-decade investment runway. Cedar Ekblom: Sebastian, thanks for taking the time to talk. Sebastian Isola: Great speaking to you Cedar. Cedar Ekblom: As a reminder, if you enjoy Thoughts on the Market, please take a moment to rate and review us on the Apple Podcasts app, it helps more people find the show.

Investors’ renewed concerns around the banking system should have a variety of impacts on fixed-income investment.----- Transcript -----Welcome to Thoughts on the Market. I'm Michael Zezas, Global Head of Fixed Income Research for Morgan Stanley. Along with my colleagues, bringing you a variety of perspectives, I'll be talking about the intersection between public policy and financial markets. It's Thursday, March 16th at 11 a.m. in New York. It's a volatile moment in markets, with investors grappling with complicated questions around the failure of Silicon Valley Bank. That event has naturally led to concerns about broader challenges to the banking system and potential impacts to the path for monetary policy. Here's what we think fixed income investors need to know in the near-term. Our banking analysts and economists have concluded that the U.S. banking system is more constrained. The causes of the Silicon Valley Bank situation will likely cause banks and their regulators to think differently about capital, causing lending growth to decline more than expected this year. That, in turn, should put pressure on the labor market and therefore the general U.S. economic outlook. We expect this dynamic will influence the U.S. bond market in the following ways in the near-term. For treasuries, we believe yields will be biased lower, because while the data still shows inflation pressures have persisted, that may take a backseat to financial stability concerns in the minds of investors. For corporate credit, there may be some near-term underperformance, given the market features a heavy weighting towards bonds issued by U.S. banks. In MUNI's, our team doesn't expect them to outperform in the near-term as the kind of interest rate volatility caused by recent events historically has been a headwind to the asset class. But a bright spot might be agency mortgage bonds, where our colleagues see room for compression in yields relative to treasuries. Those levels, which are near COVID crisis levels, perhaps overcompensate for fears that banks may have to sell their portfolios of similar bonds. So that's what's going on in the near-term, but my colleagues and I will be back here frequently to give you some longer term perspective. Thanks for listening. If you enjoy the show, please share Thoughts on the Market with a friend or colleague, or leave us a review on Apple Podcasts. It helps more people find the show.

As cryptocurrency has seen some of its major players topple, policy makers have set their sights on regulation. So what are some of the possible scenarios for crypto policy? U.S. Public Policy Researcher Ariana Salvatore and Head of Cryptocurrency Research Sheena Shah discuss.Digital assets, sometimes known as cryptocurrency, are a digital representation of a value that function as a medium of exchange, a unit of account, or a store of value, but generally do not have legal tender status. Digital assets have no intrinsic value and there is no investment underlying digital assets. The value of digital assets is derived by market forces of supply and demand, and is therefore more volatile than traditional currencies’ value. Investing in digital assets is risky, and transacting in digital assets carries various risks, including but not limited to fraud, theft, market volatility, market manipulation, and cybersecurity failures—such as the risk of hacking, theft, programming bugs, and accidental loss. Additionally, there is no guarantee that any entity that currently accepts digital assets as payment will do so in the future. The volatility and unpredictability of the price of digital assets may lead to significant and immediate losses. It may not be possible to liquidate a digital assets position in a timely manner at a reasonable price.Regulation of digital assets continues to develop globally and, as such, federal, state, or foreign governments may restrict the use and exchange of any or all digital assets, further contributing to their volatility. Digital assets stored online are not insured and do not have the same protections or safeguards of bank deposits in the US or other jurisdictions. Digital assets can be exchanged for US dollars or other currencies, but are not generally backed nor supported by any government or central bank.Before purchasing, investors should note that risks applicable to one digital asset may not be the same risks applicable to other forms of digital assets. Markets and exchanges for digital assets are not currently regulated in the same manner and do not provide the customer protections available in equities, fixed income, options, futures, commodities or foreign exchange markets. Morgan Stanley and its affiliates do business that may relate to some of the digital assets or other related products discussed in Morgan Stanley Research. These could include market making, providing liquidity, fund management, commercial banking, extension of credit, investment services and investment banking.----- Transcript -----Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore from Morgan Stanley's U.S. Public Policy Research Team. Sheena Shah: And I'm Sheena Shah, Head of the Cryptocurrency Research Team. Ariana Salvatore: And on this special episode of the podcast, we'll focus on the issue of cryptocurrency regulation. It's Wednesday, March 15 at 10 a.m. in New York. Sheena Shah: And 2 p.m. in London. Ariana Salvatore: The recent news about the U.S. banking system has brought even more focus on the cryptocurrency markets. Our listeners may have heard about a series of insolvencies and collapses of major crypto players last year, with the most notable being the FTX exchange. These events have raised concerns among policymakers and are signaling a need to regulate cryptocurrencies as a means of protecting investors. Sheena, before we dig into any potential regulatory path for crypto from here, I think it's important to try to get a grip on a question that might seem basic, but in fact is one that policymakers have actually been grappling with for quite some time. And that is, what is a cryptocurrency from a regulatory perspective. Is it a security or is it a commodity? How should it be classified from a regulatory perspective? Sheena Shah: So cryptos could be classified as many things: securities, commodities, currencies, or even something else. But the U.S. regulators are making their view very clear. The SEC is saying every crypto apart from Bitcoin is a security. The definition will determine what products can be offered, which companies can offer them, which regulator will be in charge and maybe even how transactions are taxed. There is agreement that Bitcoin should be classified as a commodity, partly due to its decentralized nature, and no regulator is classifying Bitcoin as a currency as this would admit that it's a direct competitor with the U.S. dollar. Ariana Salvatore: Got it. So taking a step back for a second, cryptocurrencies up until this point have been largely unregulated and volatility is obviously nothing new in the space. What has been happening in crypto markets lately that's just now suggesting a need for regulation? Sheena Shah: Well, last year crypto prices were in a bear market and the collapse of the FTX exchange just increased the politician interest in this area. Trading data tell us that the average U.S. retail investor purchased crypto when Bitcoin was trading above $40,000, around double the current price. So regulators want to make sure that retail investors understand the risks and to limit the volatility spillover from crypto to the traditional financial system. Now that we know why there's a need for regulation, what do you think the core principles would be behind a potential regulatory framework? Ariana Salvatore: So when we think about the way that Congress approaches the crypto space, there are really two key principles. The first is restrictiveness, or how much lawmakers want to rein in the space. And this we kind of see as a spectrum, so ranging from status quo or continuation of regulation by enforcement, to a scenario that we're calling comprehensive crypto crackdown. And that would be probably the most severe outcome from our perspective. The second principle is pretty binary. So whether or not Congress is able to delegate authority or control over the crypto space to one agency or another. One thing I'll just mention back on that Restrictiveness idea, it's not necessarily a question of just how much Congress wants to reign in the space, it's arguably even more so a function of what's possible in the legislative sense. Remember, the Republican Party controls the House of Representatives, so there are some structural constraints here that might make any regulatory efforts a little bit lighter touch than what you could expect in a unified government scenario or single party control. Sheena Shah: So there are lots of opinions on crypto regulation. What do you think is a viable eventual scenario for some regulatory framework? Ariana Salvatore: When we think about what's possible, like you said, there's a range of outcomes, but our base case is what we're calling scoping in Stablecoins. So in this scenario, Congress does in fact deliver a clear delegation of authority to either the FDIC or the CFTC, effectively answering that question of mapping out control. And it also puts into place some baseline consumer focused protections. So, for example, requiring Stablecoin issuers to be FDIC insured and imposing federal risk management standards, primarily things like reserve requirements. Now, why do we think they're going to target Stablecoins first? Besides the fact that that's pretty much all lawmakers can agree on for right now, we think there are two pressing reasons. First, most stablecoins are U.S. dollar based, and the services that some crypto companies have been offering are quite similar to what banks offer, which provides pretty direct competition with the U.S. banking system. And secondly, a large portion of crypto trading is also done via stablecoins, which means that regulating this area first could have a significant impact on the broader market without having to necessarily stretch those regulations further. So Sheena, turning it back to you, how do we think other governments around the world are looking at crypto regulation? Are they focused as the U.S. is, or are we kind of leading the way in this area? Sheena Shah: Most countries are looking at crypto regulation right now, and many are applying the similar rules, such as requiring exchanges to register with the regulators. I would say that the European Union is further ahead than the U.S. in terms of a crypto specific framework, with their MiCA regulation due to be put into law soon. In the U.S., they've gone down a route of enforcing current financial rules on crypto products. At first glance, the actions are thought to be pushing crypto innovations to other parts of the world. We think it's a bit too early to tell whether that will occur in the long run. Ariana Salvatore: Now, one specific area I'd like to touch on also, because it's become a global debate, is Central Banks Digital Currencies or CBDCs. Given the role of the U.S. dollar in the global economy, do you think the U.S. needs a CBDC? And if it does, what form do you think it could take? Sheena Shah: The U.S. only started investigating a CBDC because everyone else was doing it too. Most notably China and the Eurozone. The U.S. doesn't actually necessarily need a CBDC for domestic payments as instantaneous bank settlements are going to be possible through FedNow being introduced later this year. We don't know what form a CBDC could take as that's still being researched, but some forms could have dramatic implications for the banking sector should banks not be required to create the currency. This year we're paying more attention to the developments of the digital euro as that may be available within 2 to 3 years. Now, Ariana, if we bear in mind everything we've discussed so far, realistically how much do you expect to be accomplished in terms of crypto regulation by the next election? Ariana Salvatore: So in the note, we rank our scenarios in terms of likelihood. And as I mentioned before, scoping and stablecoins is our base case. So we do think that something gets done in this area ahead of the 2024 election, although obviously it's a very complex space and there's quite a ramp time associated with lawmakers learning about crypto and all the different nuances and working out those details. I think this question also brings up a really interesting point, though, in particular on timing and how that could relate to potential market impact. So back to your Civics 101 class, when Congress passes a law it technically goes into effect immediately, but the rules themselves can take some time to come to fruition. If the legislation directs federal agencies to come up with regulatory parameters within a certain time frame, that time frame can vary. It can be years, but sometimes it can be months following the legislation. So that is to say that although right now we're seeing significant legislative discussion underway, it's possible that markets have some time to digest the impact as these rules are introduced and developed and fine tuned to then eventually come into effect. We think that delay could create a ramp period for companies to make adjustments to become compliant with some of the new rules which we think could, overall in the longer term, soften the blow of regulation and mitigate the shock to markets. So, Sheena, last question for you. Given all of this, what key events or catalysts should investors be paying particular attention to in the coming months? Sheena Shah: Broad investor focus is clearly on the traditional banking sector. For crypto, we watch to see if there are any further announcements related to these recent coordinated actions from regulators aiming to define crypto products and any that could reduce the on-ramps between the fiat world and the crypto world. Ariana Salvatore: Got it, that makes sense. So this is a continuously evolving space with a lot of potential new developments along the way, and we'll be sure to keep an eye on it as it evolves. Sheena, thanks so much for taking the time to talk. Sheena Shah: Great speaking with you, Ariana. Ariana Salvatore: And thanks for listening. If you enjoy Thoughts on the Market, please leave us a review on Apple Podcasts and share the podcast with a friend or colleague today. 

While oil and gas prices generally move in similar directions, their current situation has deviated from market norms.----- Transcript -----Welcome to Thoughts on the Market. I'm Martijn Rats, Morgan Stanley's Global Commodities Strategist. Along with my colleagues, bringing you a variety of perspectives, today I'll give you an update on the global oil and gas markets. It's Tuesday, March 14th at 2 p.m. in London. Energy markets are currently confronted with an unusual situation: usually oil and gas prices move in similar directions, but at the moment they have quite different prospects. Let's start with the global gas market, that is the gas market outside the United States, which has its own dynamic. Over the last 12 months, the center of activity in global gas has been Europe. This time last year, Europe still received close to 400 million cubic meters a day of natural gas from Russia. Over last summer, this fell by around 90% to just a trickle, causing a severe spike in European gas prices. At the time, we argued that gas prices needed to rise to drive demand destruction and attract LNG, that is liquefied natural gas that can be transported on tankers, to Europe. Prices indeed rose. By August, European gas prices reached over €300 per megawatt hour, that is more than 20x their normal level. Since then, the European gas market has seen the most dramatic turn around. For starters, demand destruction has been far greater than expected. Warm weather has helped, but that has certainly not been the main driver. At the same time, LNG imports into Europe have risen to levels that seemed unlikely this time last year. Remarkably, European gas prices have been declining for some time already, but energy imports just keep coming. The European gas market now faces the surprising situation that if demand stays as weak as it currently is, and LNG imports continue at the level of the last few months, inventories could fill over the summer to such an extent that Europe could run out of physical storage capacity sometime around August. In the space of a few months, the European gas market has gone from worrying about what commodity analysts call 'tank bottoms', to now concern over 'tank tops'. To prevent overstocking this summer, European gas prices probably need to fall further to send a signal to LNG suppliers that they need to send at least some of their energy cargoes elsewhere. However, that then creates a better supply situation elsewhere in the LNG market, putting downward pressure on prices there too. In contrast, the oil market presents a very different picture. Oil prices also gave up a large part of their gains late last year as the market worried about recession. However, even at the point when 70% of bank economists consensually forecast a recession, Brent crude oil did not fall much below $80 a barrel. At the moment, the oil market is modestly oversupplied, which is not uncommon for this time of the year. However, from here, the oil market has several tailwinds. First is another year of recovery in aviation, which is likely to drive growth and jet fuel consumption. Second is China's reopening. While there may be some concern in other markets over the impact of China's reopening, in the oil market the indications so far have simply been positive. And finally, there is supply risk for Russia. Although oil exports from Russia have continued, a lot of this oil is piling up at sea. That cannot continue at the current pace for very long and we would still estimate that Russian oil exports will eventually come under some pressure as the year progresses. Put these factors together and the oil market will likely come into balance in 2Q and reenter a deficit once again in the third and fourth quarter. Inventories are already low and likely to decline further in the second half. Spare capacity in OPEC is still very limited and investment levels have been modest in recent years. As the oil market tightens, prices are likely to find their way higher again. In inflation adjusted terms the average oil price over the last 15 years is $93 a barrel. This is not a market where oil prices should be below the historic average. In fact, we'd argue the opposite. As mentioned, oil and gas prices usually move in similar directions, but so far this year they have already diverged quite substantially. Given the current outlook, we think these trends have further to run- global gas faces headwinds, but oil is likely to find its way higher again later this year. Thanks for listening. If you enjoy the show, please leave us a review on Apple Podcasts and share Thoughts on the Market with a friend or colleague today.

Banking news and other market pressures are leading some depositors to move funds from traditional banks to higher-yielding securities. How will this affect economic growth and equity prices?----- Transcript -----Welcome to Thoughts on the Market. I'm Mike Wilson, Chief Investment Officer and Chief U.S. Equity Strategist for Morgan Stanley. Along with my colleagues, bringing you a variety of perspectives, I'll be talking about the latest trends in the financial marketplace. It's Monday, March 13th at 11 a.m. in New York. So let's get after it. The speed and size of the Silicon Valley bank wind down over the last week was startling to many investors, even those who have been negative on the stock for months on the basis of exactly what transpired- a classic mismatch between assets and liabilities and risk taking beyond what a typical depositor does. To be clear about our view, we do not think there's a systemic issue plaguing the entire banking system, like in 2007 to 2009, particularly with the FDIC decision to backstop uninsured deposits. However, last week's events are likely to have a negative impact on economic growth at a time when growth is already waning in many parts of the economy. Rather than do a forensic autopsy of what happened at Silicon Valley and other banks, I will instead focus my comments and what it may mean for equity prices more broadly. First, I would remind listeners that Fed policy works with long and variable lags. Second, the pace of Fed tightening over the past year is unprecedented when one considers the Fed has also been engaged in aggressive quantitative tightening. Third, the focus on market based measures of financial conditions, like stock and bond prices, may have lulled both investors and the Fed itself into thinking policy tightening had not yet gone far enough. Meanwhile, more traditional measures like the yield curve have been flashing warnings for the past 6 months, closing last week near its lowest point of the cycle. From a bank's perspective, such an inversion usually means it's more difficult to make new profitable loans, and new credit is how money supply expands. However, over the past year, bank funding costs have not kept pace with the higher Fed funds rate, allowing banks to create credit at profitable net interest margins. In short, most banks have been paying well below market rates, like T-bills, because depositors have been slow to realize they can get much better rates elsewhere. But that's changed recently, with depositors deciding to pull their money from traditional banks and placing it in higher yielding securities like money markets, T-bills and the like. Ultimately, banks will likely decide to raise the interest rate they pay depositors, but that means lower profits and lower loan supply. Even before this recent exodus of deposits, loan officers have been tightening their lending standards. In our view, such tightening is likely to become even more prevalent, and that poses another headwind for money supply and consequently economic and earnings growth. In other words, it's now harder to hold the view that growth will continue to hold up in the face of the fastest Fed tightening cycle in modern times. Secondarily, the margin deterioration across most industries we've been discussing for months was already getting worse. Any top line shortfall relative to expectations from tighter money supply will only exacerbate this negative operating leverage dynamic. The bottom line is that Fed policy works with long and variable lags. Many of the key variables used by the Fed and investors to judge whether Fed policy changes are having their desired effect are backward looking- things like employment and inflation metrics. Forward looking survey data, like consumer and corporate confidence, are often better at telling us what to expect rather than what's currently happening. On that score the picture is pessimistic about where growth is likely headed, especially for earnings. Rather than a random or idiosyncratic shock, we view last week's events as just one more supporting factor for our negative earnings growth outlook. In short, Fed policy is starting to bite and it's unlikely to reverse, even if the Fed were to pause its rate hikes or quantitative tightening. Instead, we think the die is likely cast for further earnings disappointments relative to consensus and company expectations, which means lower equity prices before this bear market is over. Thanks for listening. If you enjoy Thoughts on the Market, please take a moment to rate and review us on the Apple Podcast app. It helps more people to find the show.

As the advancement of generative AI takes off, how might this inflection point in technology impact markets, companies, and investors alike? Equity Analyst and Head of U.S. Internet Research Brian Nowak and Head of the U.S. Software Research Team Keith Weiss discuss.----- Transcript -----Brian Nowak: Welcome to Thoughts on the Market. I'm Brian Nowak, Equity Analyst and Head of U.S. Internet Research for Morgan Stanley. Keith Weiss: And I'm Keith Weiss, Head of the U.S. Software Research Team. Brian Nowak: Today, we're at Morgan Stanley's annual Tech, Media, and Telecom conference in downtown San Francisco. We've been here most of the week talking with industry leaders and emerging companies across the spectrum, and the topic on everyone's mind is clearly A.I. So today, we're going to share some of what we're hearing and our views on the rise of artificial intelligence tools. It's Thursday, March 9th at 2 p.m. here on the West Coast. Brian Nowak: All week, Keith and I have been meeting with companies and speaking with new companies that are developing technologies in artificial intelligence. We've written research about how we think that artificial intelligence is reaching somewhat of an iPhone inflection moment with new people using new tools, and businesses starting to realize artificial intelligence is here to stay and can drive real change. Keith, talk to us about how we reached this moment of inflection and how do you think about some of the big picture changes across technology? Keith Weiss: Well, thank you for having me, Brian. So we've been talking about artificial intelligence for some time now. Software companies have been infusing their solutions with machine learning driven type algorithms that optimize outcomes for quite some time. But I do think the iPhone analogy is apt, for two reasons. One, what we're talking about today with generative AI is more foundational technologies. You can almost think about that as the operating system on the mobile phone like the iOS operating system. And what we've heard all week long is companies are really seeing opportunity to create new apps on top of that operating system, new use cases for this generative AI. The other reason why this is such an apt analogy is, like the iPhone, this is really capturing the imagination of not just technology executives, not just investors like you and I, but everyday people. This is something that our kids are coming home from high school and saying, "Hey, dad, look at what I'm able to do or with chatGPT, isn't this incredible?" So you have that marketing moment of everybody realizes that this new capability, this new powerful technology is really available to everybody. Keith Weiss: So, Brian, what do you think are going to be the impacts of this technology on the consumer internet companies that you cover? Brian Nowak: We expect significant change. There is approximately $6 trillion of U.S. consumer expenditure that we think is going to be addressed by change. We see changes across search. We see more personalized search, more complete search. We see increasing uses of chatbots that can drive more accurate, personalized and complete answers in a faster manner across all types of categories. Think about improved e-commerce search helping you find products you would like to buy faster. Think about travel itinerary AI chatbots that create entire travel itineraries for your family. We see the capability for social media to change, better rank ordering and algorithms that determine what paid and organic content to show people at each moment. We see new creator tools, generative AI is going to enable people to make not only static images but more video based images across the entire economy. So people will be able to express themselves in more ways across social media, which will drive more engagement and ultimately more monetization for those social media platforms. We see e-commerce companies being able to better match inventory to people. Long tail inventory that previously perhaps could not find the right person or the right potential buyer will now better be able to be matched to buyers and to wallets. We see the shared economy across rideshare and food delivery also benefiting from this. Again, you're going to have more information to better match drivers to potential riders, restaurants to potential eaters. And down the line we go where we ultimately see artificial intelligence leading to an acceleration in digitization of consumers time, digitization of consumers wallets and all of that was going to bring more dollars online to the consumer internet companies. Brian Nowak: Now that's the consumer side, how do you think about artificial intelligence impacting enterprise in the B2B side? Keith Weiss: Yeah, I think there's a lot of commonalities into what you went through. On one level you talked about search, and what these generative AI technologies are able to do is put the questions that we're asking in context, and that enables a much better search functionality. And it's not just searching the Internet. Think about the searches that you do of your email inbox, and they're not very effective today and it's going to become a lot more effective. But that search can now extend across all the information within your organization that can be pretty powerful. When you talk about the generative capabilities in terms of writing content, we write content all day long, whether it's in emails, whether it's in text messages, and that can be automated and made more efficient and more effective. But also, the Excel formulas that we write in our Excel sheets, the reports that you and I write every day could be really augmented by this generative AI capability. And then there's a whole nother kind of class of capabilities that come in doing jobs better. So if we think about how this changes the landscape for software developers, one of the initial use cases we've seen of generative AI is making software developers much more productive by the models handling a lot of the rote software development, doing the easy stuff. So that software developer could focus his time on the hard problems to be solved in overall software development. So if you think about it holistically, what we've seen in technology trends really over the last two decades, we've seen the cost of computing coming way down, stuff like Public Cloud and the Hyperscalers have taken that compute cost down and that curve continues to come down. The cost of data is coming down, it's more accessible, there's more out of it because we've digitized so much of the economy. And then thirdly, now you're going to see the cost of software development come down as the software developers become more productive and the AI is doing more of that development. So those are all of your input cost in terms of what you do to automate business processes. And at the same time, the capabilities of the software is expanding. Fundamentally, that's what this AI is doing, is expanding the classes and types of work that can be automated with software. So if your input costs are coming way down and your capabilities are coming up, I think the amount of software that's being developed and where it's applied is really going to inflate a lot. It's going to accelerate and you're going to see an explosion of software development. I'm as bullish about the software industry right now as I've been over the past 20 years. Keith Weiss: So one of the things that investors ask me a lot about is the cost side of the equation. These new capabilities are a lot more compute intensive, and is this going to impact the gross margins and the operating margins of the companies that need to deploy this. So, how do you think about that part of the equation, Brian? Brian Nowak: There's likely to be some near-term impact, but we think the impacts are near-term in nature. It is true that the compute intensity and the capital intensity of a lot of these new models is higher than some of the current models that we're using across tech. The compute intensity of the large language models is higher than it is for search, it is higher than it is for a lot of the existing e-commerce or social media platforms that are used. So as we do think that the companies are going to need to invest more in capital expenditure, more in GPUs, which are some of the chips that enable a lot of these new large language models and capabilities to come. But these are more near-term cost headwinds because over the long term, as the companies work with the models, tune the models and train the models, we would expect these leading tech companies to put their efficiency teams in place and actually find ways to optimize the models to get the costs down over time. And when you layer that in with the new revenue opportunities, whether we're talking about incremental search revenue dollars, incremental e-commerce transactions, incremental B2B, SAS like revenue streams from some companies that will be paying more for these services that you spoke about, we think the ROI is going to be positive. So while there is going to likely be some near-term cost pressure across the space, we think it's near-term and to your point, this is a very exciting time within tech because these new capabilities are going to just expand the runway for top line growth for a lot of the companies across the space. Brian Nowak: And this is all very exciting on the consumer side and the business side, but Keith talk to us about sort of some of the uncertainties and sort of some of the factors that need to be ironed out as we continue to push more AI tools across the economy. Keith Weiss: Yeah, there's definitely uncertainties and definitely a risk out there when it comes to these technologies. So if we think about some of the broader risks that we see, these models are trained on the internet. So you have to think about all the data that's out there. Some of that data is good, some of that data is bad, some of that data could introduce biases into the search engines. And then the people using these search engines that are imbued with the AI, depending on how hard they're pushing on the search engines on the prompts, and that's the questions that they're asking the search engines, you could elicit some really strange behavior. And some of that behavior has elicited fears and scared some people, frankly, by what these search engines are bringing back to them. But there's also business model risk. From a software perspective, this is going to be the new user interface of how individual users access software functionality. If you're a software company that's not integrating this soon enough, you're going to be at a real disadvantage. So there's business has to be taken into account. And then there's broader economic risk. We're talking about all the capabilities that this generative AI can now do that these models can now take over. So for the software developer, does this mean there's job risk for software developers? For creative professionals who used to come up with the content on their own, does this mean less jobs for creative professionals? Or you and I? Are these models going to start writing our research reports on a go forward basis? So those are all kind of potential risks that we're thinking about on a go forward basis. Keith Weiss: So, Brian, maybe to wrap up, how do you think about the milestones and sort of the key indicators that you're keeping an eye on for who are going to be the winners and losers as this AI technology pervades everything more fully? Brian Nowak: It's a great question. I would break it into a couple different answers. First, because of the high compute intensity and costs of a lot of these models, we only see a handful of large tech companies likely being able to build these large language models and train them and fully deploy them. So the first thing I would say is look for new large language model applications from big tech being integrated into search, being integrated into e-commerce platforms, being integrated into social media platforms, being integrated into online video platforms. Watch for new large language tools to roll across all of big tech. Secondly, pay attention to your app stores because we expect developers to build a lot of new applications for both businesses and consumers using these large language models. And that is what we think is ultimately going to lead to a lot of these consumer behavior changes and spur a lot of the productivity that you talked about on the business side. Keith Weiss: Outstanding. Brian Nowak: Keith, thanks for taking the time. Keith Weiss: Great speaking with you, Brian. Brian Nowak: As a reminder, if you enjoy Thoughts on the Market, please take a moment to rate and review us on the Apple Podcasts app. It helps more people to find the show.