WEBVTT - Inflation, Investing, And The Latest On Omicron 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.759 at Bloomberg dot com slash podcast. We got a FED 0:00:22.880 --> 0:00:26.279 meeting on Wednesday. A lot of folks will be paying 0:00:26.720 --> 0:00:29.680 very close attention to that. Let's check in with Sylvia Jablonski, 0:00:29.760 --> 0:00:32.560 chief investment officer and co founder of Defiance E t 0:00:32.760 --> 0:00:34.920 F S. Sovia, thanks so much for joining us here. 0:00:35.360 --> 0:00:38.320 You know, a lot of folks are saying, boy, these guys, 0:00:38.360 --> 0:00:42.000 these folks are gonna be very hawkish here come Wednesday. 0:00:42.040 --> 0:00:46.720 What are your expectations? Hi, good morning. Well, I think, 0:00:46.880 --> 0:00:50.040 like everyone else, I'm very curious to see what what 0:00:50.320 --> 0:00:53.080 FED share Powell will will have to stay on Wednesday. 0:00:53.240 --> 0:00:57.120 You know, the recent meetings have given us an indication that, 0:00:57.640 --> 0:00:59.480 you know, the tone is a little bit more hawkish, 0:00:59.480 --> 0:01:02.720 and we're talking about perhaps doing you know, sort of 0:01:02.840 --> 0:01:06.800 more tapering more quickly, and um, you know, perhaps there's 0:01:06.800 --> 0:01:09.200 a debate about rate hikes whether or not they will 0:01:09.240 --> 0:01:11.920 come sooner than we expected. So you know, I'll just 0:01:11.959 --> 0:01:14.720 be kind of listening in to see, um, you know, 0:01:14.880 --> 0:01:17.399 what what the tone is and whatnot. But you know, 0:01:17.440 --> 0:01:19.160 all in all, if we take a step back from it, 0:01:19.240 --> 0:01:21.520 I think that, you know, we do have this senslation issue, 0:01:22.280 --> 0:01:25.399 but we also have an expanding economy. We have, you know, 0:01:25.560 --> 0:01:28.320 just a massive surplus of equidity in the markets, and 0:01:28.720 --> 0:01:31.320 I think, you know, the point here for the fat 0:01:31.440 --> 0:01:34.120 is that the economy is sort of strong and on 0:01:34.160 --> 0:01:36.400 the way off. We had this this good unemployment number 0:01:36.440 --> 0:01:38.800 four point two percent. Perhaps it is appropriate to sort 0:01:38.840 --> 0:01:40.800 of pump the brakes because we don't need as much 0:01:40.920 --> 0:01:44.319 riscal and monetary stimulus. So um, you know, there's two 0:01:44.319 --> 0:01:47.280 sides to that too. How much can the economy take 0:01:47.319 --> 0:01:50.840 in terms of rate hikes. I mean, I don't mind, um, 0:01:50.880 --> 0:01:53.200 if the market is telling us with the flat yield 0:01:53.200 --> 0:01:56.960 curve that inflation goes away. But I don't want growth 0:01:57.000 --> 0:02:01.120 to go away. Yeah, I don't want grows. I don't 0:02:01.120 --> 0:02:04.520 want growth to go away either, So you know, I 0:02:04.520 --> 0:02:07.560 I think though that if you if you look at 0:02:07.600 --> 0:02:10.880 some of the top growth companies, UM out there right 0:02:10.919 --> 0:02:13.120 now and look at the amount of sort of cash 0:02:13.160 --> 0:02:16.480 that they have on the balance sheet, you know, and 0:02:16.840 --> 0:02:19.320 you sort of like think about where we've been in 0:02:19.320 --> 0:02:21.880 the last couple of years, and you know, some of 0:02:21.919 --> 0:02:24.399 the issues in terms of like the economy being hit 0:02:24.480 --> 0:02:26.920 and you know, massive part of the economy still haven't 0:02:26.960 --> 0:02:29.920 recovered supply chain issues. I just wouldn't expect the FED 0:02:30.040 --> 0:02:32.520 to sort of come crashing in and do aggressive rate 0:02:32.600 --> 0:02:35.920 hikes really quickly. I would anticipate that they would be 0:02:35.919 --> 0:02:37.959 slow and steady. And and if they are sort of 0:02:38.000 --> 0:02:40.480 slow and steady, you know, in that case, the growth 0:02:40.639 --> 0:02:43.280 growth firms are you know, they're they're well capitalized, are 0:02:43.280 --> 0:02:45.000 well founded, they have balance sheets, so I don't think 0:02:45.000 --> 0:02:47.919 it's going to be a huge impact for them if 0:02:47.960 --> 0:02:52.120 it goes in an orderly fashion. So, so you've given 0:02:52.160 --> 0:02:55.520 that background background for the FED for rising rates, for 0:02:55.880 --> 0:02:59.959 inflation transitory maybe not. What is your kind of bag 0:03:00.000 --> 0:03:04.760 eas case outlook for how are you approaching this new year? Yeah, 0:03:04.800 --> 0:03:07.679 so I actually project that two is going to be 0:03:07.680 --> 0:03:10.880 a positive year. I think the consumer is strong. There's 0:03:10.919 --> 0:03:14.160 that you know, there's tillions of dollars of savings on 0:03:14.200 --> 0:03:17.320 the sidelines that will either come into spending or will 0:03:17.360 --> 0:03:20.679 come into the market. UM. I think that we're sort 0:03:20.680 --> 0:03:23.320 of learning how to live with the various variants. They'll 0:03:23.360 --> 0:03:26.360 probably with be with us going forward, but you know, 0:03:26.400 --> 0:03:28.079 we've sort of adapted. I think that some of the 0:03:28.120 --> 0:03:30.920 supply chain issues will sort of shake out, and you know, 0:03:30.960 --> 0:03:33.280 companies are flesh with cash as we said, and they're 0:03:33.280 --> 0:03:35.920 spending it. We have UM, you know, a record level 0:03:35.960 --> 0:03:40.040 of buybacks coming back in capital expenditures. UM. The you know, 0:03:40.040 --> 0:03:43.320 employment numbers good. So I think that you know, you're 0:03:43.360 --> 0:03:45.680 going to see a lot of growth, particularly in some 0:03:45.760 --> 0:03:48.640 of these hot new disruptive sectors. So I think that 0:03:49.320 --> 0:03:52.960 for example, quantum computing, UM and and the metaverse are 0:03:52.960 --> 0:03:54.720 going to be to sort of hot topics that people 0:03:54.720 --> 0:03:57.120 are going to invest in and investing in that means 0:03:57.160 --> 0:04:02.040 looking at things like you know, semiconductor, is cloud computing, cybersecurity, 0:04:02.120 --> 0:04:04.800 ai A, are you know e TPX or single stocks 0:04:04.800 --> 0:04:07.280 that sort of play in those different spaces. Five G 0:04:07.480 --> 0:04:10.279 is going to be something that has a huge opportunity 0:04:10.320 --> 0:04:13.800 as as Washington continues to invest there. I think the 0:04:13.880 --> 0:04:17.240 reopen trade that UM you know have has has sort 0:04:17.240 --> 0:04:20.680 of just like flit along is going to really start 0:04:20.720 --> 0:04:22.800 to grow, you know, do the delta abicon in the 0:04:22.839 --> 0:04:26.520 general COVID headwinds, I think that that trade hasn't really 0:04:26.640 --> 0:04:29.280 worked yet. And you know, travel is about nine trillion 0:04:29.279 --> 0:04:32.320 of the global economy. Half of that went away during 0:04:32.360 --> 0:04:35.320 COVID and we're nowhere near that now. So I think 0:04:35.360 --> 0:04:41.520 that you know, once we sort of see full fledged travel, hotels, casinos, 0:04:41.680 --> 0:04:44.320 um cruise, ships and airlines will benefit from that. So 0:04:44.360 --> 0:04:45.719 there's a lot there are a lot of really great 0:04:45.720 --> 0:04:47.839 places to put your money. And I just think overall, 0:04:47.880 --> 0:04:50.320 but the market is again just flush with cash and 0:04:50.320 --> 0:04:52.560 and we'll just generally be be sort of like liquid 0:04:52.600 --> 0:04:55.000 and the right place to be in terms of equity exposure. 0:04:55.320 --> 0:05:00.760 Me and Paul are going on a cruise and hopefully 0:05:00.920 --> 0:05:04.280 we don't see Omega. What about healthcare? What do you 0:05:04.279 --> 0:05:07.960 think about healthcare? Sylvia? Yeah, so health care I think 0:05:08.080 --> 0:05:12.159 is UM health care will be a good portfolio diversifier. 0:05:12.200 --> 0:05:14.440 You know, if we we always advocate for the Barbell approach, 0:05:14.520 --> 0:05:17.160 right and you want some some level of defensive exposures 0:05:17.160 --> 0:05:20.400 of portfolio, and I always you know, throw healthcare into 0:05:20.440 --> 0:05:23.520 that bucket because I think it's something that UM is 0:05:23.720 --> 0:05:25.400 you know, it's it's sort of consumed whether or not 0:05:25.480 --> 0:05:27.760 the market pulls back, right, and you have all of 0:05:27.760 --> 0:05:31.840 these sort of advancements and um, you know, different mergers. Now. 0:05:31.960 --> 0:05:35.080 You heard about the Deviser murder today, and I just 0:05:35.080 --> 0:05:36.920 think that there's going to be consolidation. I think there's 0:05:36.960 --> 0:05:38.839 gonna be sort of better use of cash. You know, 0:05:38.839 --> 0:05:41.200 we've had this backdrop of like fast track at THEA 0:05:41.279 --> 0:05:44.680 approvals um and you know, it's it's it's interesting. I 0:05:44.720 --> 0:05:47.080 have a husband who's deeply involved in research in medicine 0:05:47.120 --> 0:05:49.320 and has said that, you know, the COVID vaccine is 0:05:49.360 --> 0:05:51.279 either going to COVID is either going to be looked 0:05:51.279 --> 0:05:53.520 at as the biggest disaster of our time or you know, 0:05:53.560 --> 0:05:57.000 an absolute modern miracle in terms of how fast research 0:05:57.120 --> 0:05:59.719 trials and things came out to pump out vaccines. So 0:06:00.120 --> 0:06:03.400 you know, we'll see how how much that continues. And yeah, 0:06:03.440 --> 0:06:05.480 so I do think it's always good to be positioned there. 0:06:06.040 --> 0:06:08.080 So Villa, thank you so much for joining us and 0:06:08.120 --> 0:06:10.960 sharing your thoughts. We always appreciate getting your time. So 0:06:11.080 --> 0:06:15.440 Via Jablonski, chief investment officer, co founder of Defiance et 0:06:15.680 --> 0:06:22.680 F S the new variant in Town. These days is 0:06:22.720 --> 0:06:27.479 omikron uh and governments and cities all around the world 0:06:27.520 --> 0:06:28.919 are trying to figure out and companies, for that mat 0:06:28.960 --> 0:06:31.280 are trying to figure out how to respond. Let's get 0:06:31.279 --> 0:06:36.400 the latest from Dr Pervy Perk, pediatric allergist and immunologists 0:06:36.440 --> 0:06:40.440 at Allergy and the Asthma Network. Dr P thanks so 0:06:40.520 --> 0:06:44.479 much for joining us here amikron. We've it's been in 0:06:44.480 --> 0:06:47.239 our midst here for several weeks. Here. What do we 0:06:47.440 --> 0:06:50.599 really know and how concerned should people be about this 0:06:50.640 --> 0:06:54.240 new variant? Right right? Thank you for having me so. 0:06:54.360 --> 0:06:56.560 You know, when news verse broke, there was a lot 0:06:56.600 --> 0:07:00.120 of concern, you know, given the number of mutations that 0:07:00.200 --> 0:07:03.640 this variant carries compared to previous ones. But in the 0:07:03.720 --> 0:07:07.080 last few weeks we've actually had reassuring news, one of 0:07:07.120 --> 0:07:09.679 which is that, you know, luckily, majority of the cases 0:07:09.720 --> 0:07:12.720 have been mild um so we haven't been seeing increase 0:07:12.760 --> 0:07:17.360 in deaths, increasing severe disease or hospitalization. And the other 0:07:17.440 --> 0:07:20.360 good news is that we have evidence that you know, 0:07:20.720 --> 0:07:24.880 those who are vaccinated are well protected against the severe 0:07:24.880 --> 0:07:27.480 disease and hospitalizations, and then those who go on to 0:07:27.520 --> 0:07:32.240 receive their booster are in even better shapes. You know. Um, So, 0:07:32.240 --> 0:07:36.000 so we have more information now and this variant maybe 0:07:36.120 --> 0:07:40.200 more trans transmissible, sorry, transmissible or contagious, But the good 0:07:40.240 --> 0:07:42.960 news is it doesn't appear so far to be more 0:07:43.040 --> 0:07:46.160 dangerous and also it appears our vaccines are still very 0:07:46.200 --> 0:07:49.520 effective against it. Yeah, we were talking this morning with 0:07:49.600 --> 0:07:54.480 an epidemiologist from the UK who said, um, this this 0:07:54.640 --> 0:07:57.600 variant doesn't seem to care whether or not you're vaccinated. 0:07:57.960 --> 0:08:01.040 I mean he wasn't talking about people who are necessarily boosted, 0:08:01.120 --> 0:08:05.080 but who had the first two shots and assuming okay 0:08:05.160 --> 0:08:09.640 that was months ago. Um, does it make a difference 0:08:09.680 --> 0:08:12.200 whether or not you're vaccinated when it comes to the 0:08:12.240 --> 0:08:16.360 severity of the disease? Right? So that we we still 0:08:16.400 --> 0:08:18.880 don't know the exact answer to right, because we want 0:08:18.880 --> 0:08:23.600 to see how many people unvaccinated get this variant versus 0:08:23.600 --> 0:08:25.760 those who are vaccinated and if there is a difference 0:08:25.800 --> 0:08:28.600 and the severity and and frankly we just don't have 0:08:28.720 --> 0:08:32.120 that data yet. Um. But you know, whatever drop in 0:08:32.160 --> 0:08:35.240 antibodies that we did see and those were fully vaccinated, 0:08:35.640 --> 0:08:38.960 that it was well compensated for with that booster dose. 0:08:39.160 --> 0:08:42.320 So um, you know, in different studies have shown difference 0:08:42.360 --> 0:08:45.520 amounts that have decreased. So I know, one study showed 0:08:45.559 --> 0:08:49.559 a fortyfold drop in that neutralizing antibody. Another study showed 0:08:49.559 --> 0:08:52.240 a twenty five fold drop. But the nice thing is 0:08:52.240 --> 0:08:55.520 with that booster dose that kind of compensated for that drop. 0:08:55.960 --> 0:08:58.840 And um, you know, everyone talks about these antibodies, but 0:08:58.840 --> 0:09:00.720 it's so much more than that. You know, our immune 0:09:01.040 --> 0:09:03.960 system has t cells that help us remember and fight 0:09:04.040 --> 0:09:06.600 off infections, and it looks like those cells are still 0:09:07.080 --> 0:09:10.040 quite efficacious and keeping people out of the hospital even 0:09:10.040 --> 0:09:14.400 with this new variant and preventing death. Um, whether vaccinated 0:09:14.520 --> 0:09:17.480 versus unvaccinated makes a big difference, we'll find out soon enough. 0:09:17.600 --> 0:09:20.160 I know in South Africa they had some data showing 0:09:20.200 --> 0:09:23.280 that people who recovered from COVID were more likely to 0:09:23.320 --> 0:09:26.520 catch this variant if they had not been vascinated versus 0:09:26.600 --> 0:09:29.360 those who were. So there may be something there and 0:09:29.360 --> 0:09:32.520 that the vaccine is still more helpful. But we we again, 0:09:32.920 --> 0:09:35.560 we're building the plane as we're flying it, so hopefully 0:09:35.559 --> 0:09:37.920 as that data comes in, will have better answers the 0:09:37.920 --> 0:09:42.480 next few weeks. Doctor is I guess the new normal, 0:09:43.200 --> 0:09:46.880 at least for the foreseeable future, is that given that 0:09:46.920 --> 0:09:50.599 there's so much of the world's population that is unvaccinated 0:09:50.679 --> 0:09:53.840 or not fully vaccinated, that these variants are just going 0:09:53.880 --> 0:09:57.520 to be a way of life going forward. Yeah, you know, 0:09:57.559 --> 0:10:00.800 I think we should accept that covid vantine is here 0:10:00.840 --> 0:10:04.160 to stay, just like so many other coronaviruses. You know, 0:10:04.240 --> 0:10:06.840 the common cold is a coronavirus, and we don't think 0:10:06.840 --> 0:10:09.000 twice about you know, getting a cold in the winter 0:10:09.080 --> 0:10:11.520 time or what have you. Um, So I think it 0:10:11.679 --> 0:10:14.040 is here to stay. But um, the good news is, 0:10:14.080 --> 0:10:17.160 I think we have much better tools to deal with it. Uh, 0:10:17.160 --> 0:10:20.600 and eventually, hopefully we can reach that concept where enough 0:10:20.640 --> 0:10:23.920 people have been exposed that the virus just continues to 0:10:24.000 --> 0:10:27.360 become milder and milder, similar to you know, the more 0:10:27.360 --> 0:10:30.520 common coronaviruses that our bodies have become used to over 0:10:30.559 --> 0:10:34.200 the last few decades or hundreds of years. Um. But 0:10:34.360 --> 0:10:37.000 you know, again, I think we're in much better shape 0:10:37.000 --> 0:10:38.800 than we were two years ago, or we were all 0:10:38.920 --> 0:10:42.480 naive to this virus. Now we have excellent vaccines and 0:10:42.520 --> 0:10:45.559 we have excellent therapeutics too. Even if you do happen 0:10:45.600 --> 0:10:50.000 to get sick. Um, I have been I hate wearing 0:10:50.000 --> 0:10:55.600 a mask. It gives me, mask me and I don't 0:10:56.480 --> 0:11:00.840 breathe terribly well in them, etcetera. On silvia. But at 0:11:00.880 --> 0:11:02.920 the beginning of the pandemic, I thought I was only 0:11:02.920 --> 0:11:06.000 wearing a master protect others. Now I hear that if 0:11:06.040 --> 0:11:08.400 I wear a mask, if it's an f FP two mask, 0:11:08.440 --> 0:11:11.839 and I wear it properly, I'm protecting myself with the mask. 0:11:12.400 --> 0:11:17.640 Have you have we seen that opinion evolved? Yeah? No, definitely, 0:11:17.920 --> 0:11:20.679 um so much has evolved, right, but we have now 0:11:20.880 --> 0:11:24.120 very good studies and data that show that it not 0:11:24.200 --> 0:11:27.520 only protects others, but the user as well, you know, 0:11:27.559 --> 0:11:31.920 especially if it's a medical grade math So now I care. Yeah. So, 0:11:32.000 --> 0:11:35.000 if it's a bandana or like a gator, you may 0:11:35.040 --> 0:11:37.559 not be providing much protection to yourself, but if it's 0:11:37.559 --> 0:11:41.600 a surgical mask or higher some medical grade mask, you're 0:11:41.640 --> 0:11:44.120 actually helping yourself too. And I think that's why we 0:11:44.240 --> 0:11:47.520 virtually saw no flu cases last year too. You know, 0:11:47.559 --> 0:11:51.120 in years prior, flu season always crushed our healthcare system, 0:11:51.200 --> 0:11:54.160 but last year there were almost no cases, and it's 0:11:54.200 --> 0:11:57.400 because everyone was masked up. Everyone was very proactive about 0:11:57.440 --> 0:12:01.200 getting their flu shot early on, you know, even before 0:12:01.240 --> 0:12:04.560 the COVID vaccine was available, So UM, I think you know, 0:12:04.600 --> 0:12:07.240 the masking can only help, especially in the winter time. 0:12:07.360 --> 0:12:10.800 You know, when you're indoors and public places outdoors, you 0:12:10.840 --> 0:12:13.800 don't have to be as stringent, thankfully, because those respiratory 0:12:13.840 --> 0:12:18.640 viruses don't aren't as contagious outside. Dr what's the latest 0:12:18.720 --> 0:12:23.880 on therapeutics? Uh? If folks do in fact become sick, Um, 0:12:23.960 --> 0:12:26.040 what's the latest and what should we be looking for 0:12:26.040 --> 0:12:29.360 in terms of treatments? Yeah, you know, and now it's 0:12:29.400 --> 0:12:33.480 exciting because um, you know, we have therapeutics both in 0:12:33.520 --> 0:12:37.840 injection and pillform. So um Fiser you know, has a 0:12:37.920 --> 0:12:40.280 tablet that's an anti viral that if you take it 0:12:40.320 --> 0:12:42.840 within the first three to five days, it can reduce 0:12:42.880 --> 0:12:46.000 your chances of being in the hospital or being very 0:12:46.080 --> 0:12:50.360 very ill by over nine which is huge um. And 0:12:50.800 --> 0:12:53.760 as does mrkum Astra Zeneca. They don't have a pill, 0:12:53.800 --> 0:12:57.040 but they have UM, you know, an antibody cocktail, which 0:12:57.120 --> 0:13:01.640 given early enough, can help prevent you from getting ill. Um. 0:13:01.720 --> 0:13:05.280 And of course the regeneration monoclonal antibodies, which you know 0:13:05.320 --> 0:13:08.400 with the musing for some time. Even our last president 0:13:08.559 --> 0:13:11.600 used that when he became ill. So the key is 0:13:11.679 --> 0:13:17.920 early treatment timing is everything um and recently another antibody Cocktails, 0:13:17.920 --> 0:13:19.720 got a pool for those people who may have had 0:13:19.720 --> 0:13:23.840 a severe reaction to the vaccine and can't tolerate another dose, 0:13:23.960 --> 0:13:26.720 or can't tolerate a booster, or let's say they're immune 0:13:26.800 --> 0:13:29.360 compromise where they took the shot, but they just don't 0:13:29.400 --> 0:13:32.400 mount as good of a response as someone who's not 0:13:32.480 --> 0:13:35.880 immune compromised. So there's there's so many options out there now, 0:13:36.280 --> 0:13:40.600 both preventatively as well as once you're already sick, that 0:13:40.720 --> 0:13:43.760 we're we're in much better shape now than we were before. 0:13:44.720 --> 0:13:46.959 Dr perv Peric, thank you so much for joining us. 0:13:47.000 --> 0:13:51.400 I really appreciate getting your expertise pediatric allergists and immunologist 0:13:51.440 --> 0:13:54.400 at the Allergy and Asthma Network, also on the faculty 0:13:54.440 --> 0:13:57.760 as a clinical assistant professor at n y U School 0:13:57.840 --> 0:14:00.600 of Medicine. So we always appreciate and we can get 0:14:00.679 --> 0:14:04.120 experts on the air and hope explain all the changes 0:14:04.120 --> 0:14:08.480 and that this pandemic leads us through. And of course 0:14:08.480 --> 0:14:10.800 the discussion over the last several weeks and likely coming 0:14:10.800 --> 0:14:14.640 forward will be the omikron uh and the reactions to that. Right, 0:14:18.440 --> 0:14:21.480 let's go to Tim Fury, chairman of the Institute of 0:14:21.480 --> 0:14:25.520 Supply Management i s M, to the insiders. Hey, Tim, 0:14:25.920 --> 0:14:27.200 this is the time of year and we'd like to 0:14:27.280 --> 0:14:33.880 chat with you about your forecast. For boy, there's so 0:14:33.880 --> 0:14:37.240 many moving pieces here. Just give us your top line 0:14:37.240 --> 0:14:41.600 and then we'll dig in. Yeah, Thanksfaul very much. So yes, 0:14:41.680 --> 0:14:44.600 twice a year we do a forecast, do comprehensive forecast 0:14:44.640 --> 0:14:47.120 here in December, we do an update in May. We 0:14:47.240 --> 0:14:49.800 also look back at the prior year in December to 0:14:49.840 --> 0:14:52.760 see how well we perform. And we gathered the information 0:14:52.920 --> 0:14:57.520 both in terms of UH percent change year over year 0:14:57.600 --> 0:14:59.440 and also the diffusion index that we use on the 0:14:59.480 --> 0:15:02.720 p M I, meaning anything over fifty is positive, under 0:15:02.720 --> 0:15:05.720 fifty is contracting. So you know, the headline number here 0:15:05.760 --> 0:15:08.640 is that our manufacturing revenues for two are expected to 0:15:08.680 --> 0:15:11.560 be up six point by the end of the year, 0:15:12.000 --> 0:15:15.360 following a fourteen point one percent growth in one. So 0:15:15.400 --> 0:15:18.960 that's really strong. Indicates that things will continue on at 0:15:18.960 --> 0:15:22.160 a pretty good pace holloway through two. The panel said. 0:15:22.200 --> 0:15:24.640 On the outlook side for the next twelve months, the 0:15:24.720 --> 0:15:27.280 fusion index of sixty six, which is a strong number. 0:15:27.320 --> 0:15:30.000 You know, anything over sixty is really strong, so very 0:15:30.000 --> 0:15:33.720 positive there. And then from the business comparison standpoint half 0:15:33.760 --> 0:15:37.520 one to half two, the panel believes that half one 0:15:38.160 --> 0:15:41.160 will perform at a seventy the fusion index compared to 0:15:41.200 --> 0:15:43.640 the end of this year, which is really strong, and 0:15:43.720 --> 0:15:45.920 half two will be a sixty three percent the fusion 0:15:45.920 --> 0:15:48.920 index compared to half one. So we're gonna be growing 0:15:48.960 --> 0:15:51.240 as a year goes on, it looks like, but the 0:15:51.240 --> 0:15:53.360 growth will slow, right, I mean, when we look at 0:15:54.280 --> 0:15:59.040 the flattening yield curve, it shows us that investors are 0:15:59.280 --> 0:16:02.280 aren't sor that this inflation and this growth is going 0:16:02.320 --> 0:16:05.000 to stick around at the same kind of strength that 0:16:05.040 --> 0:16:08.720 we're seeing it now. Well, you know at sixty two 0:16:08.840 --> 0:16:11.120 sixty three, I think for the half half two against 0:16:11.120 --> 0:16:14.520 half one is still pretty strong. Remember over fifties is expanding, 0:16:14.600 --> 0:16:17.760 so uh, definitely better than half We're going to perform 0:16:17.840 --> 0:16:20.480 better in half one of two compared to the end 0:16:20.480 --> 0:16:23.240 of twenty one, and then again in half two of 0:16:23.320 --> 0:16:26.320 twenty two. It's gonna be a pretty strong period. So 0:16:26.400 --> 0:16:30.400 on the profit margin side, interesting, we we've forecasted at 0:16:30.440 --> 0:16:33.360 the end of this year we saw a contraction and 0:16:33.400 --> 0:16:36.240 profits compared to the first half, but for the first 0:16:36.240 --> 0:16:38.920 half of two we see an expansion of profits at 0:16:38.960 --> 0:16:41.840 a fusion index of fifty six. So you know a 0:16:41.920 --> 0:16:44.280 lot of ups and downs there with labor costs going up, 0:16:44.800 --> 0:16:47.680 rob till and puts going up, and we collect information 0:16:47.680 --> 0:16:51.280 on that also. Would you like to hear those numbers? Yeah, 0:16:51.280 --> 0:16:54.840 they're right, yeah, so uh So on the labor and 0:16:54.920 --> 0:16:58.360 benefits side, we we forecast that the cost of labor 0:16:58.360 --> 0:17:01.880 will be up four point seven percent two uh and 0:17:02.480 --> 0:17:04.920 last year in December one, we thought it would be 0:17:05.000 --> 0:17:08.119 two point seven So you can see escalating and labor 0:17:08.160 --> 0:17:10.160 costs and the better just go with that. So that's 0:17:10.160 --> 0:17:13.439 a headline obviously for in your fashion. On the employment side, 0:17:14.000 --> 0:17:18.000 we believe that we grew our employment levels three one 0:17:18.160 --> 0:17:22.639 and we'll grow them a further one. So that's a 0:17:22.680 --> 0:17:25.159 big question mark because the question really is is it 0:17:25.200 --> 0:17:27.840 because they only need one percent more people or because 0:17:27.840 --> 0:17:30.280 they can't get any more than one percent more people? 0:17:30.320 --> 0:17:33.560 A lot of stuff you can't get right now Before Um, 0:17:33.680 --> 0:17:35.680 you worked for I s M. You were a rioter 0:17:35.880 --> 0:17:41.080 before that, I think at Tuson, so you know what 0:17:41.119 --> 0:17:44.240 the supply chain is like firsthand. Do you think that 0:17:44.640 --> 0:17:47.840 this issue is gonna work itself out by the end 0:17:47.840 --> 0:17:51.880 of next year. Well, the transportation has been a big disruptor. 0:17:51.960 --> 0:17:54.960 Usually it's an enabler when it comes to speeding goods 0:17:55.040 --> 0:17:57.919 to the next level of assembly. This year has been 0:17:57.920 --> 0:18:00.680 a disabler because there's so many variables in whole supplies, 0:18:00.760 --> 0:18:03.399 and as you know, I've been looking very closely at 0:18:03.440 --> 0:18:05.320 that and the t m I, and we really don't 0:18:05.320 --> 0:18:08.360 see much recovery before the second half of next year, 0:18:09.119 --> 0:18:11.760 and the porticians may even continue beyond that through to 0:18:11.800 --> 0:18:15.600 the labor management negotiations on the next contract for the 0:18:16.560 --> 0:18:19.720 UH port workers on the West Coast. So it's gonna 0:18:19.720 --> 0:18:23.680 be interesting. I mean, transportations remaining very disruptive about half 0:18:23.680 --> 0:18:26.240 of my comments, and the supplier delivery section last month 0:18:26.560 --> 0:18:29.800 where transportation related the highest I've ever seen, So you know, 0:18:29.840 --> 0:18:33.200 I think that that destruction level is going to continue. Hey, Tim, 0:18:33.200 --> 0:18:36.800 thanks so much for joining us. Really appreciate UH chatting 0:18:36.840 --> 0:18:40.719 with you. Tim Fury, Chairman, Institute of Supply Management Business 0:18:40.760 --> 0:18:44.840 Survey Committee. UH. They get some really good granular data 0:18:45.080 --> 0:18:49.080 from all folks in the manufacturing sector, in the services sector, 0:18:49.520 --> 0:18:53.320 and now increasingly important in the transportation and logistics sector, 0:18:53.840 --> 0:18:55.760 and then we love getting their survey results, and of 0:18:55.760 --> 0:18:57.720 course we get the manufacturing and service data from I 0:18:57.840 --> 0:19:00.600 S M on a monthly basis as well of checking 0:19:00.640 --> 0:19:07.720 in with Tim Fury. Now, let's get over to Michael Cogino, 0:19:08.000 --> 0:19:12.720 President and portfolio manager the Permanent Portfolio family of funds, 0:19:12.760 --> 0:19:16.720 to talk to us about what investors do as we 0:19:16.800 --> 0:19:20.520 head into a tidal wave of central bank decisions. I 0:19:20.520 --> 0:19:24.840 guess the feed is clearly UM first and foremost, or 0:19:24.840 --> 0:19:28.040 at least UH for US investors, the most important thing 0:19:28.080 --> 0:19:32.840 to watch, Michael, what do you expect from Jerome Powell? Yeah, 0:19:32.880 --> 0:19:37.280 good morning guys. Um. You know, because of the different 0:19:37.280 --> 0:19:40.120 directions they have taken over the last few years, pivots 0:19:40.160 --> 0:19:44.320 or whatever you want to call them, I'm not really sure, um, 0:19:44.359 --> 0:19:47.760 And and we've positioned our portfolio that way. I mean, 0:19:47.840 --> 0:19:51.600 the general sense, UM that's been evolving in the last 0:19:51.800 --> 0:19:54.760 month or so here has been that the FETE is 0:19:54.800 --> 0:19:59.960 finally recognized that, you know, inflations not just transitory there 0:20:00.119 --> 0:20:04.720 tapering interest rate hikes may come quicker than everybody expected. Um. 0:20:04.880 --> 0:20:07.159 We're hearing going into the meeting this week, that they 0:20:07.240 --> 0:20:10.760 might even be more dramatic than that, um, and quicker 0:20:10.840 --> 0:20:13.280 on the on the trigger. So I mean, sure, all 0:20:13.359 --> 0:20:17.119 that's on the table. Um. The biggest issue is is 0:20:17.560 --> 0:20:21.920 you know, the to the degree that these aggressive actions 0:20:21.960 --> 0:20:24.679 are taken, it just slams home the point that they 0:20:24.680 --> 0:20:27.600 were wrong to begin with. And I mean, and and 0:20:27.680 --> 0:20:30.560 so you know, I don't know how drastic you want 0:20:30.560 --> 0:20:33.719 to be, because you could easily raise rates too quickly 0:20:33.960 --> 0:20:37.480 and throw the economy into a recession. Um, But you 0:20:37.520 --> 0:20:40.560 do have an inflation problem, that's real. I mean, anybody 0:20:40.560 --> 0:20:43.200 that saw the liquidity creation and the velocity of money 0:20:43.200 --> 0:20:45.560 over the last year and a half or so, I 0:20:45.600 --> 0:20:48.040 don't know why anybody would be surprised by what we're 0:20:48.040 --> 0:20:51.800 seeing right now. And and so the question for investors is, yeah, 0:20:51.840 --> 0:20:54.280 we all know inflation, we're hearing about it constantly, But 0:20:54.359 --> 0:20:55.920 what do you do with it to protect your life 0:20:55.920 --> 0:20:59.040 in your portfolio? Alright? So give us you know, kind 0:20:59.040 --> 0:21:01.520 of your thoughts there, my as we go into what 0:21:01.560 --> 0:21:04.600 are you telling your clients? Well, I mean you want 0:21:04.640 --> 0:21:08.600 to try to be reasonable. Um, you know, inflation at 0:21:08.640 --> 0:21:12.280 some level is a natural byproduct of economic growth. And 0:21:12.280 --> 0:21:15.520 and so the question and so are arising interest rates 0:21:15.520 --> 0:21:18.240 really and so The question is at what point does 0:21:18.480 --> 0:21:21.679 does that is? What is gradual, what is reasonable, what 0:21:21.840 --> 0:21:25.119 is sort of a positive from the market growing, and 0:21:25.119 --> 0:21:27.560 then when when does the turn negative. Our view has 0:21:27.600 --> 0:21:31.440 always been that part of this inflation story was structural. UM. Yes, 0:21:31.480 --> 0:21:34.520 part of it is transitory. We would expect inflation to 0:21:34.600 --> 0:21:37.320 maybe settle down from where it's been going. But I 0:21:37.359 --> 0:21:39.560 think I still think you're looking at a three or four, 0:21:39.880 --> 0:21:43.560 you know, five percent number on a longer term basis, 0:21:43.560 --> 0:21:45.480 and that's a big difference from where we've been for 0:21:45.520 --> 0:21:48.800 the last you know, X number of years and decades. 0:21:49.119 --> 0:21:52.560 So that's going to necessitate a change in thinking. Our 0:21:52.640 --> 0:21:56.560 view would be to stay diversified. UM. Markets are moving 0:21:56.600 --> 0:22:01.639