Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. We got a FED
Speaker 1: meeting on Wednesday. A lot of folks will be paying
Speaker 1: very close attention to that. Let's check in with Sylvia Jablonski,
Speaker 1: chief investment officer and co founder of Defiance E t
Speaker 1: F S. Sovia, thanks so much for joining us here.
Speaker 1: You know, a lot of folks are saying, boy, these guys,
Speaker 1: these folks are gonna be very hawkish here come Wednesday.
Speaker 1: What are your expectations? Hi, good morning. Well, I think,
Speaker 1: like everyone else, I'm very curious to see what what
Speaker 1: FED share Powell will will have to stay on Wednesday.
Speaker 1: You know, the recent meetings have given us an indication that,
Speaker 1: you know, the tone is a little bit more hawkish,
Speaker 1: and we're talking about perhaps doing you know, sort of
Speaker 1: more tapering more quickly, and um, you know, perhaps there's
Speaker 1: a debate about rate hikes whether or not they will
Speaker 1: come sooner than we expected. So you know, I'll just
Speaker 1: be kind of listening in to see, um, you know,
Speaker 1: what what the tone is and whatnot. But you know,
Speaker 1: all in all, if we take a step back from it,
Speaker 1: I think that, you know, we do have this senslation issue,
Speaker 1: but we also have an expanding economy. We have, you know,
Speaker 1: just a massive surplus of equidity in the markets, and
Speaker 1: I think, you know, the point here for the fat
Speaker 1: is that the economy is sort of strong and on
Speaker 1: the way off. We had this this good unemployment number
Speaker 1: four point two percent. Perhaps it is appropriate to sort
Speaker 1: of pump the brakes because we don't need as much
Speaker 1: riscal and monetary stimulus. So um, you know, there's two
Speaker 1: sides to that too. How much can the economy take
Speaker 1: in terms of rate hikes. I mean, I don't mind, um,
Speaker 1: if the market is telling us with the flat yield
Speaker 1: curve that inflation goes away. But I don't want growth
Speaker 1: to go away. Yeah, I don't want grows. I don't
Speaker 1: want growth to go away either, So you know, I
Speaker 1: I think though that if you if you look at
Speaker 1: some of the top growth companies, UM out there right
Speaker 1: now and look at the amount of sort of cash
Speaker 1: that they have on the balance sheet, you know, and
Speaker 1: you sort of like think about where we've been in
Speaker 1: the last couple of years, and you know, some of
Speaker 1: the issues in terms of like the economy being hit
Speaker 1: and you know, massive part of the economy still haven't
Speaker 1: recovered supply chain issues. I just wouldn't expect the FED
Speaker 1: to sort of come crashing in and do aggressive rate
Speaker 1: hikes really quickly. I would anticipate that they would be
Speaker 1: slow and steady. And and if they are sort of
Speaker 1: slow and steady, you know, in that case, the growth
Speaker 1: growth firms are you know, they're they're well capitalized, are
Speaker 1: well founded, they have balance sheets, so I don't think
Speaker 1: it's going to be a huge impact for them if
Speaker 1: it goes in an orderly fashion. So, so you've given
Speaker 1: that background background for the FED for rising rates, for
Speaker 1: inflation transitory maybe not. What is your kind of bag
Speaker 1: eas case outlook for how are you approaching this new year? Yeah,
Speaker 1: so I actually project that two is going to be
Speaker 1: a positive year. I think the consumer is strong. There's
Speaker 1: that you know, there's tillions of dollars of savings on
Speaker 1: the sidelines that will either come into spending or will
Speaker 1: come into the market. UM. I think that we're sort
Speaker 1: of learning how to live with the various variants. They'll
Speaker 1: probably with be with us going forward, but you know,
Speaker 1: we've sort of adapted. I think that some of the
Speaker 1: supply chain issues will sort of shake out, and you know,
Speaker 1: companies are flesh with cash as we said, and they're
Speaker 1: spending it. We have UM, you know, a record level
Speaker 1: of buybacks coming back in capital expenditures. UM. The you know,
Speaker 1: employment numbers good. So I think that you know, you're
Speaker 1: going to see a lot of growth, particularly in some
Speaker 1: of these hot new disruptive sectors. So I think that
Speaker 1: for example, quantum computing, UM and and the metaverse are
Speaker 1: going to be to sort of hot topics that people
Speaker 1: are going to invest in and investing in that means
Speaker 1: looking at things like you know, semiconductor, is cloud computing, cybersecurity,
Speaker 1: ai A, are you know e TPX or single stocks
Speaker 1: that sort of play in those different spaces. Five G
Speaker 1: is going to be something that has a huge opportunity
Speaker 1: as as Washington continues to invest there. I think the
Speaker 1: reopen trade that UM you know have has has sort
Speaker 1: of just like flit along is going to really start
Speaker 1: to grow, you know, do the delta abicon in the
Speaker 1: general COVID headwinds, I think that that trade hasn't really
Speaker 1: worked yet. And you know, travel is about nine trillion
Speaker 1: of the global economy. Half of that went away during
Speaker 1: COVID and we're nowhere near that now. So I think
Speaker 1: that you know, once we sort of see full fledged travel, hotels, casinos,
Speaker 1: um cruise, ships and airlines will benefit from that. So
Speaker 1: there's a lot there are a lot of really great
Speaker 1: places to put your money. And I just think overall,
Speaker 1: but the market is again just flush with cash and
Speaker 1: and we'll just generally be be sort of like liquid
Speaker 1: and the right place to be in terms of equity exposure.
Speaker 1: Me and Paul are going on a cruise and hopefully
Speaker 1: we don't see Omega. What about healthcare? What do you
Speaker 1: think about healthcare? Sylvia? Yeah, so health care I think
Speaker 1: is UM health care will be a good portfolio diversifier.
Speaker 1: You know, if we we always advocate for the Barbell approach,
Speaker 1: right and you want some some level of defensive exposures
Speaker 1: of portfolio, and I always you know, throw healthcare into
Speaker 1: that bucket because I think it's something that UM is
Speaker 1: you know, it's it's sort of consumed whether or not
Speaker 1: the market pulls back, right, and you have all of
Speaker 1: these sort of advancements and um, you know, different mergers. Now.
Speaker 1: You heard about the Deviser murder today, and I just
Speaker 1: think that there's going to be consolidation. I think there's
Speaker 1: gonna be sort of better use of cash. You know,
Speaker 1: we've had this backdrop of like fast track at THEA
Speaker 1: approvals um and you know, it's it's it's interesting. I
Speaker 1: have a husband who's deeply involved in research in medicine
Speaker 1: and has said that, you know, the COVID vaccine is
Speaker 1: either going to COVID is either going to be looked
Speaker 1: at as the biggest disaster of our time or you know,
Speaker 1: an absolute modern miracle in terms of how fast research
Speaker 1: trials and things came out to pump out vaccines. So
Speaker 1: you know, we'll see how how much that continues. And yeah,
Speaker 1: so I do think it's always good to be positioned there.
Speaker 1: So Villa, thank you so much for joining us and
Speaker 1: sharing your thoughts. We always appreciate getting your time. So
Speaker 1: Via Jablonski, chief investment officer, co founder of Defiance et
Speaker 1: F S the new variant in Town. These days is
Speaker 1: omikron uh and governments and cities all around the world
Speaker 1: are trying to figure out and companies, for that mat
Speaker 1: are trying to figure out how to respond. Let's get
Speaker 1: the latest from Dr Pervy Perk, pediatric allergist and immunologists
Speaker 1: at Allergy and the Asthma Network. Dr P thanks so
Speaker 1: much for joining us here amikron. We've it's been in
Speaker 1: our midst here for several weeks. Here. What do we
Speaker 1: really know and how concerned should people be about this
Speaker 1: new variant? Right right? Thank you for having me so.
Speaker 1: You know, when news verse broke, there was a lot
Speaker 1: of concern, you know, given the number of mutations that
Speaker 1: this variant carries compared to previous ones. But in the
Speaker 1: last few weeks we've actually had reassuring news, one of
Speaker 1: which is that, you know, luckily, majority of the cases
Speaker 1: have been mild um so we haven't been seeing increase
Speaker 1: in deaths, increasing severe disease or hospitalization. And the other
Speaker 1: good news is that we have evidence that you know,
Speaker 1: those who are vaccinated are well protected against the severe
Speaker 1: disease and hospitalizations, and then those who go on to
Speaker 1: receive their booster are in even better shapes. You know. Um, So,
Speaker 1: so we have more information now and this variant maybe
Speaker 1: more trans transmissible, sorry, transmissible or contagious, But the good
Speaker 1: news is it doesn't appear so far to be more
Speaker 1: dangerous and also it appears our vaccines are still very
Speaker 1: effective against it. Yeah, we were talking this morning with
Speaker 1: an epidemiologist from the UK who said, um, this this
Speaker 1: variant doesn't seem to care whether or not you're vaccinated.
Speaker 1: I mean he wasn't talking about people who are necessarily boosted,
Speaker 1: but who had the first two shots and assuming okay
Speaker 1: that was months ago. Um, does it make a difference
Speaker 1: whether or not you're vaccinated when it comes to the
Speaker 1: severity of the disease? Right? So that we we still
Speaker 1: don't know the exact answer to right, because we want
Speaker 1: to see how many people unvaccinated get this variant versus
Speaker 1: those who are vaccinated and if there is a difference
Speaker 1: and the severity and and frankly we just don't have
Speaker 1: that data yet. Um. But you know, whatever drop in
Speaker 1: antibodies that we did see and those were fully vaccinated,
Speaker 1: that it was well compensated for with that booster dose.
Speaker 1: So um, you know, in different studies have shown difference
Speaker 1: amounts that have decreased. So I know, one study showed
Speaker 1: a fortyfold drop in that neutralizing antibody. Another study showed
Speaker 1: a twenty five fold drop. But the nice thing is
Speaker 1: with that booster dose that kind of compensated for that drop.
Speaker 1: And um, you know, everyone talks about these antibodies, but
Speaker 1: it's so much more than that. You know, our immune
Speaker 1: system has t cells that help us remember and fight
Speaker 1: off infections, and it looks like those cells are still
Speaker 1: quite efficacious and keeping people out of the hospital even
Speaker 1: with this new variant and preventing death. Um, whether vaccinated
Speaker 1: versus unvaccinated makes a big difference, we'll find out soon enough.
Speaker 1: I know in South Africa they had some data showing
Speaker 1: that people who recovered from COVID were more likely to
Speaker 1: catch this variant if they had not been vascinated versus
Speaker 1: those who were. So there may be something there and
Speaker 1: that the vaccine is still more helpful. But we we again,
Speaker 1: we're building the plane as we're flying it, so hopefully
Speaker 1: as that data comes in, will have better answers the
Speaker 1: next few weeks. Doctor is I guess the new normal,
Speaker 1: at least for the foreseeable future, is that given that
Speaker 1: there's so much of the world's population that is unvaccinated
Speaker 1: or not fully vaccinated, that these variants are just going
Speaker 1: to be a way of life going forward. Yeah, you know,
Speaker 1: I think we should accept that covid vantine is here
Speaker 1: to stay, just like so many other coronaviruses. You know,
Speaker 1: the common cold is a coronavirus, and we don't think
Speaker 1: twice about you know, getting a cold in the winter
Speaker 1: time or what have you. Um, So I think it
Speaker 1: is here to stay. But um, the good news is,
Speaker 1: I think we have much better tools to deal with it. Uh,
Speaker 1: and eventually, hopefully we can reach that concept where enough
Speaker 1: people have been exposed that the virus just continues to
Speaker 1: become milder and milder, similar to you know, the more
Speaker 1: common coronaviruses that our bodies have become used to over
Speaker 1: the last few decades or hundreds of years. Um. But
Speaker 1: you know, again, I think we're in much better shape
Speaker 1: than we were two years ago, or we were all
Speaker 1: naive to this virus. Now we have excellent vaccines and
Speaker 1: we have excellent therapeutics too. Even if you do happen
Speaker 1: to get sick. Um, I have been I hate wearing
Speaker 1: a mask. It gives me, mask me and I don't
Speaker 1: breathe terribly well in them, etcetera. On silvia. But at
Speaker 1: the beginning of the pandemic, I thought I was only
Speaker 1: wearing a master protect others. Now I hear that if
Speaker 1: I wear a mask, if it's an f FP two mask,
Speaker 1: and I wear it properly, I'm protecting myself with the mask.
Speaker 1: Have you have we seen that opinion evolved? Yeah? No, definitely,
Speaker 1: um so much has evolved, right, but we have now
Speaker 1: very good studies and data that show that it not
Speaker 1: only protects others, but the user as well, you know,
Speaker 1: especially if it's a medical grade math So now I care. Yeah. So,
Speaker 1: if it's a bandana or like a gator, you may
Speaker 1: not be providing much protection to yourself, but if it's
Speaker 1: a surgical mask or higher some medical grade mask, you're
Speaker 1: actually helping yourself too. And I think that's why we
Speaker 1: virtually saw no flu cases last year too. You know,
Speaker 1: in years prior, flu season always crushed our healthcare system,
Speaker 1: but last year there were almost no cases, and it's
Speaker 1: because everyone was masked up. Everyone was very proactive about
Speaker 1: getting their flu shot early on, you know, even before
Speaker 1: the COVID vaccine was available, So UM, I think you know,
Speaker 1: the masking can only help, especially in the winter time.
Speaker 1: You know, when you're indoors and public places outdoors, you
Speaker 1: don't have to be as stringent, thankfully, because those respiratory
Speaker 1: viruses don't aren't as contagious outside. Dr what's the latest
Speaker 1: on therapeutics? Uh? If folks do in fact become sick, Um,
Speaker 1: what's the latest and what should we be looking for
Speaker 1: in terms of treatments? Yeah, you know, and now it's
Speaker 1: exciting because um, you know, we have therapeutics both in
Speaker 1: injection and pillform. So um Fiser you know, has a
Speaker 1: tablet that's an anti viral that if you take it
Speaker 1: within the first three to five days, it can reduce
Speaker 1: your chances of being in the hospital or being very
Speaker 1: very ill by over nine which is huge um. And
Speaker 1: as does mrkum Astra Zeneca. They don't have a pill,
Speaker 1: but they have UM, you know, an antibody cocktail, which
Speaker 1: given early enough, can help prevent you from getting ill. Um.
Speaker 1: And of course the regeneration monoclonal antibodies, which you know
Speaker 1: with the musing for some time. Even our last president
Speaker 1: used that when he became ill. So the key is
Speaker 1: early treatment timing is everything um and recently another antibody Cocktails,
Speaker 1: got a pool for those people who may have had
Speaker 1: a severe reaction to the vaccine and can't tolerate another dose,
Speaker 1: or can't tolerate a booster, or let's say they're immune
Speaker 1: compromise where they took the shot, but they just don't
Speaker 1: mount as good of a response as someone who's not
Speaker 1: immune compromised. So there's there's so many options out there now,
Speaker 1: both preventatively as well as once you're already sick, that
Speaker 1: we're we're in much better shape now than we were before.
Speaker 1: Dr perv Peric, thank you so much for joining us.
Speaker 1: I really appreciate getting your expertise pediatric allergists and immunologist
Speaker 1: at the Allergy and Asthma Network, also on the faculty
Speaker 1: as a clinical assistant professor at n y U School
Speaker 1: of Medicine. So we always appreciate and we can get
Speaker 1: experts on the air and hope explain all the changes
Speaker 1: and that this pandemic leads us through. And of course
Speaker 1: the discussion over the last several weeks and likely coming
Speaker 1: forward will be the omikron uh and the reactions to that. Right,
Speaker 1: let's go to Tim Fury, chairman of the Institute of
Speaker 1: Supply Management i s M, to the insiders. Hey, Tim,
Speaker 1: this is the time of year and we'd like to
Speaker 1: chat with you about your forecast. For boy, there's so
Speaker 1: many moving pieces here. Just give us your top line
Speaker 1: and then we'll dig in. Yeah, Thanksfaul very much. So yes,
Speaker 1: twice a year we do a forecast, do comprehensive forecast
Speaker 1: here in December, we do an update in May. We
Speaker 1: also look back at the prior year in December to
Speaker 1: see how well we perform. And we gathered the information
Speaker 1: both in terms of UH percent change year over year
Speaker 1: and also the diffusion index that we use on the
Speaker 1: p M I, meaning anything over fifty is positive, under
Speaker 1: fifty is contracting. So you know, the headline number here
Speaker 1: is that our manufacturing revenues for two are expected to
Speaker 1: be up six point by the end of the year,
Speaker 1: following a fourteen point one percent growth in one. So
Speaker 1: that's really strong. Indicates that things will continue on at
Speaker 1: a pretty good pace holloway through two. The panel said.
Speaker 1: On the outlook side for the next twelve months, the
Speaker 1: fusion index of sixty six, which is a strong number.
Speaker 1: You know, anything over sixty is really strong, so very
Speaker 1: positive there. And then from the business comparison standpoint half
Speaker 1: one to half two, the panel believes that half one
Speaker 1: will perform at a seventy the fusion index compared to
Speaker 1: the end of this year, which is really strong, and
Speaker 1: half two will be a sixty three percent the fusion
Speaker 1: index compared to half one. So we're gonna be growing
Speaker 1: as a year goes on, it looks like, but the
Speaker 1: growth will slow, right, I mean, when we look at
Speaker 1: the flattening yield curve, it shows us that investors are
Speaker 1: aren't sor that this inflation and this growth is going
Speaker 1: to stick around at the same kind of strength that
Speaker 1: we're seeing it now. Well, you know at sixty two
Speaker 1: sixty three, I think for the half half two against
Speaker 1: half one is still pretty strong. Remember over fifties is expanding,
Speaker 1: so uh, definitely better than half We're going to perform
Speaker 1: better in half one of two compared to the end
Speaker 1: of twenty one, and then again in half two of
Speaker 1: twenty two. It's gonna be a pretty strong period. So
Speaker 1: on the profit margin side, interesting, we we've forecasted at
Speaker 1: the end of this year we saw a contraction and
Speaker 1: profits compared to the first half, but for the first
Speaker 1: half of two we see an expansion of profits at
Speaker 1: a fusion index of fifty six. So you know a
Speaker 1: lot of ups and downs there with labor costs going up,
Speaker 1: rob till and puts going up, and we collect information
Speaker 1: on that also. Would you like to hear those numbers? Yeah,
Speaker 1: they're right, yeah, so uh So on the labor and
Speaker 1: benefits side, we we forecast that the cost of labor
Speaker 1: will be up four point seven percent two uh and
Speaker 1: last year in December one, we thought it would be
Speaker 1: two point seven So you can see escalating and labor
Speaker 1: costs and the better just go with that. So that's
Speaker 1: a headline obviously for in your fashion. On the employment side,
Speaker 1: we believe that we grew our employment levels three one
Speaker 1: and we'll grow them a further one. So that's a
Speaker 1: big question mark because the question really is is it
Speaker 1: because they only need one percent more people or because
Speaker 1: they can't get any more than one percent more people?
Speaker 1: A lot of stuff you can't get right now Before Um,
Speaker 1: you worked for I s M. You were a rioter
Speaker 1: before that, I think at Tuson, so you know what
Speaker 1: the supply chain is like firsthand. Do you think that
Speaker 1: this issue is gonna work itself out by the end
Speaker 1: of next year. Well, the transportation has been a big disruptor.
Speaker 1: Usually it's an enabler when it comes to speeding goods
Speaker 1: to the next level of assembly. This year has been
Speaker 1: a disabler because there's so many variables in whole supplies,
Speaker 1: and as you know, I've been looking very closely at
Speaker 1: that and the t m I, and we really don't
Speaker 1: see much recovery before the second half of next year,
Speaker 1: and the porticians may even continue beyond that through to
Speaker 1: the labor management negotiations on the next contract for the
Speaker 1: UH port workers on the West Coast. So it's gonna
Speaker 1: be interesting. I mean, transportations remaining very disruptive about half
Speaker 1: of my comments, and the supplier delivery section last month
Speaker 1: where transportation related the highest I've ever seen, So you know,
Speaker 1: I think that that destruction level is going to continue. Hey, Tim,
Speaker 1: thanks so much for joining us. Really appreciate UH chatting
Speaker 1: with you. Tim Fury, Chairman, Institute of Supply Management Business
Speaker 1: Survey Committee. UH. They get some really good granular data
Speaker 1: from all folks in the manufacturing sector, in the services sector,
Speaker 1: and now increasingly important in the transportation and logistics sector,
Speaker 1: and then we love getting their survey results, and of
Speaker 1: course we get the manufacturing and service data from I
Speaker 1: S M on a monthly basis as well of checking
Speaker 1: in with Tim Fury. Now, let's get over to Michael Cogino,
Speaker 1: President and portfolio manager the Permanent Portfolio family of funds,
Speaker 1: to talk to us about what investors do as we
Speaker 1: head into a tidal wave of central bank decisions. I
Speaker 1: guess the feed is clearly UM first and foremost, or
Speaker 1: at least UH for US investors, the most important thing
Speaker 1: to watch, Michael, what do you expect from Jerome Powell? Yeah,
Speaker 1: good morning guys. Um. You know, because of the different
Speaker 1: directions they have taken over the last few years, pivots
Speaker 1: or whatever you want to call them, I'm not really sure, um,
Speaker 1: And and we've positioned our portfolio that way. I mean,
Speaker 1: the general sense, UM that's been evolving in the last
Speaker 1: month or so here has been that the FETE is
Speaker 1: finally recognized that, you know, inflations not just transitory there
Speaker 1: tapering interest rate hikes may come quicker than everybody expected. Um.
Speaker 1: We're hearing going into the meeting this week, that they
Speaker 1: might even be more dramatic than that, um, and quicker
Speaker 1: on the on the trigger. So I mean, sure, all
Speaker 1: that's on the table. Um. The biggest issue is is
Speaker 1: you know, the to the degree that these aggressive actions
Speaker 1: are taken, it just slams home the point that they
Speaker 1: were wrong to begin with. And I mean, and and
Speaker 1: so you know, I don't know how drastic you want
Speaker 1: to be, because you could easily raise rates too quickly
Speaker 1: and throw the economy into a recession. Um, But you
Speaker 1: do have an inflation problem, that's real. I mean, anybody
Speaker 1: that saw the liquidity creation and the velocity of money
Speaker 1: over the last year and a half or so, I
Speaker 1: don't know why anybody would be surprised by what we're
Speaker 1: seeing right now. And and so the question for investors is, yeah,
Speaker 1: we all know inflation, we're hearing about it constantly, But
Speaker 1: what do you do with it to protect your life
Speaker 1: in your portfolio? Alright? So give us you know, kind
Speaker 1: of your thoughts there, my as we go into what
Speaker 1: are you telling your clients? Well, I mean you want
Speaker 1: to try to be reasonable. Um, you know, inflation at
Speaker 1: some level is a natural byproduct of economic growth. And
Speaker 1: and so the question and so are arising interest rates
Speaker 1: really and so The question is at what point does
Speaker 1: does that is? What is gradual, what is reasonable, what
Speaker 1: is sort of a positive from the market growing, and
Speaker 1: then when when does the turn negative. Our view has
Speaker 1: always been that part of this inflation story was structural. UM. Yes,
Speaker 1: part of it is transitory. We would expect inflation to
Speaker 1: maybe settle down from where it's been going. But I
Speaker 1: think I still think you're looking at a three or four,
Speaker 1: you know, five percent number on a longer term basis,
Speaker 1: and that's a big difference from where we've been for
Speaker 1: the last you know, X number of years and decades.
Speaker 1: So that's going to necessitate a change in thinking. Our
Speaker 1: view would be to stay diversified. UM. Markets are moving
Speaker 1: around assets, money flows, assets are moving quickly. We would, obviously,
Speaker 1: UM want to have some hedges against the declining value
Speaker 1: of money UM I e s A. Gold and silver
Speaker 1: assets on the bond side. Given the risk of rising
Speaker 1: rates and volatility, UM, we would be very short duration
Speaker 1: and we are high quality balance sheets. UM. You know,
Speaker 1: despite the flattening of the curve, I think the real
Speaker 1: risk would be that the FED loses credibility, market rates
Speaker 1: decouple from the feds desires, and investors lose confidence and
Speaker 1: they start selling bonds. Um. If that occurs, then you're
Speaker 1: gonna want to be short. And on the equity side,
Speaker 1: I think there's there's always opportunities and equities, but equities
Speaker 1: are richly valued as an asset class. And certainly if
Speaker 1: rates go higher, um, and you're dealing with more inflation,
Speaker 1: other types of companies are going to do better and
Speaker 1: some are gonna suffer. Inequities, we would look for companies
Speaker 1: that have pricing power for their goods and services, and
Speaker 1: also those that have some control over input costs and
Speaker 1: say tabor and materials and whatever, because those are the
Speaker 1: things that are going to have some structural inflation built
Speaker 1: into them. So in terms of the growth expectation, what
Speaker 1: do you see going forward? We just talked to Tim
Speaker 1: Fiori from the I S M and he said he
Speaker 1: thinks growth is still going to remain very strong in
Speaker 1: the first half and even in the second half, it's
Speaker 1: not going to tail tail off too much. Um. Yeah,
Speaker 1: I mean I don't really have a prediction one way another.
Speaker 1: That's a reasonable story. Um. The one thing I worry
Speaker 1: about with respect to growth, I do think you're gonna
Speaker 1: have a growth story UM, but it definitely is tempered
Speaker 1: by what goes on with COVID. COVID has been a risk,
Speaker 1: you know, since it came out, and and I think
Speaker 1: anybody that uh sort of feels like we're beyond it
Speaker 1: or we know all the things that come out of
Speaker 1: it is really being naive. And I think we're seeing
Speaker 1: that with the most recent omicron and and you know,
Speaker 1: you're heading into the winter, people getting together vaccine means
Speaker 1: not being as effective and needing boosters, and you know,
Speaker 1: there's just all kinds of issues there that potentially have
Speaker 1: risk economic growth. The other is with respect to UM,
Speaker 1: you know, cost structure, labor UM, the fact that you've
Speaker 1: got millions of unfilled jobs UM, and how do you
Speaker 1: get those jobs filled? Because at some point that's a
Speaker 1: limit to economic growth. You you sort of limit your upside,
Speaker 1: you're sealing your capacity. And so I see that as
Speaker 1: an emerging problem. And and the fact that you have
Speaker 1: so many unfilled jobs is definitely adding to UM labor
Speaker 1: costs and wage inflation, and wage inflation is going up
Speaker 1: higher than income numbers based on the recent dat I've seen,
Speaker 1: and that's a risk as well. UM, So that could
Speaker 1: limit economic growth higher interest rates. Interest rate volatility could
Speaker 1: could impact growth because you're you're lending costs, you're borrowing
Speaker 1: costs go up um. So there are risks to the
Speaker 1: just growth story. And I'm not predicting recessions or lower
Speaker 1: growth stories, but I think you need to think about
Speaker 1: those in an overall investment strategy. And you do need
Speaker 1: to worry about things like stagflation, you know, the misery
Speaker 1: index and all those other things. Not saying they're gonna happen,
Speaker 1: but you do have them, all right, Michael, A lot
Speaker 1: to think about their Thanks very much for you taking
Speaker 1: the time today. We always appreciate that, Michael Caino. He's
Speaker 1: a president and portfolio manager, a permanent portfolio family of funds,
Speaker 1: constructive for two. But there are some headwinds out there.
Speaker 1: Need to be mindful fed. Coming up Wednesday. Thanks for
Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and
Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform
Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt
Speaker 1: Miller three. On Fall Sweeney, I'm on Twitter at pt Sweeney.
Speaker 1: Before the podcast, you can always catch us worldwide at
Speaker 1: Bloomberg Radio