Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
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Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Clobal News. Well, two explosions we know
Speaker 1: outside of Cobbles International Airport. We've talked about deaths Americans
Speaker 1: as well of as Afghanis. Let's get an update on
Speaker 1: this continuously unfolding situation in crisis with us. Right now
Speaker 1: is Bloomberg News National Security Team Leader Bill Ferries, along
Speaker 1: with Katherine Zimmerman, fellow at the Conservative Thing Tank American
Speaker 1: Enterprise Institute. She covers terrorism and foreign and defense policy
Speaker 1: both on the phone in d C. And we should
Speaker 1: remind you that we are awaiting a briefing from the
Speaker 1: White House as well. As the Pentagon as soon as
Speaker 1: they do begin we will take you there live in
Speaker 1: the meantime. Bill, thanks for being here with Tim and myself.
Speaker 1: What's the latest that we know in terms of the
Speaker 1: situation in Afghanistan as well as the casualties. Well, we
Speaker 1: know that several US troops have been killed in the blast,
Speaker 1: and we believe more wounded. And obviously, um the Taliban
Speaker 1: have said that there were at least thirteen Afghans killed
Speaker 1: and several dozen wounded in the blast, and I think
Speaker 1: we all expect those um, those numbers to rise in
Speaker 1: the coming hours. We have had reports that planes are
Speaker 1: still leaving the Kabo airport, but obviously, UH, this this
Speaker 1: UH puts a big hold on efforts by US and
Speaker 1: NATO forces to get more people out of the country. UM,
Speaker 1: and we're expecting it, as he said, a White House
Speaker 1: and Pentagon briefing, within the next thirty minutes to an
Speaker 1: hour here, so we should get an update on how
Speaker 1: this is affecting UH, what the latest numbers are, and
Speaker 1: and how this may affect President Item's plans to withdraw
Speaker 1: by August thirty one. Hey, Bill, what do we know
Speaker 1: about potentially the group or groups behind this and their
Speaker 1: relationship with the Taliban. Well, the Taliban, the Taliban themselves
Speaker 1: have come out and said that they think that one
Speaker 1: of the ISIS offshoots is possibly responsible for this. They
Speaker 1: say they're investigating. I mean, these lasts happened in you know,
Speaker 1: outside of the airport perimeter, in the area now controlled
Speaker 1: by the Taliban UH And throughout the conflict over the
Speaker 1: last decade, you have had that Taliban UH, You've had
Speaker 1: Taliban bombings in Afghanistan. You've had ISIS bombings in Afghanistan,
Speaker 1: and some of those ISIS bombings have been against Taliban targets.
Speaker 1: So it's a it's been a complicated picture there. But
Speaker 1: the Taliban and ISIS have been at each other at
Speaker 1: the same time they go I have been going after
Speaker 1: foreign forces. Katherine, want to bring you into the conversation here. Um,
Speaker 1: you cover terrorism, you cover foreign defense policy. Was any
Speaker 1: withdrawal American U S forces going to be difficult from Afghanistan?
Speaker 1: No matter what the timing, it was certainly going to
Speaker 1: be difficult. But as we look back at how the
Speaker 1: withdraw always done, there was a lot that could have
Speaker 1: been done better. Well, why don't you expand upon that?
Speaker 1: We were looking at a situation where the US drew
Speaker 1: down in a matter of months troops to next nothing, uh,
Speaker 1: and we still had American civilian personnel on the ground,
Speaker 1: and we're really placing our hands on in the our
Speaker 1: safe game in the hands of the Afghan National Security
Speaker 1: forces UM and those, as we well know, collapsed very rapidly.
Speaker 1: But what was missed in all of that is, of course,
Speaker 1: the enabling capabilities that the United States provided the Afghans
Speaker 1: that were yanked as the United States pulled back. Well,
Speaker 1: we certainly can't go back in time. And the deadline
Speaker 1: that's looming right now is August thirty one, and that's
Speaker 1: the date that the United States has agreed to with
Speaker 1: the Taliban to remove the American presence there. I'm wondering how, Katherine,
Speaker 1: what happened there today not changes that deadline, but changes
Speaker 1: what happens over the next few days and the thousands
Speaker 1: of people who still remain in Afghanistan that need to
Speaker 1: get out. The attack today will certainly make it more
Speaker 1: challenging for the people who need to get out of
Speaker 1: Afghanistan to get out. The United States had already changed
Speaker 1: how it was bringing Americans to the airport because of
Speaker 1: fears that the soft target, the crowds unprotected outside of
Speaker 1: the airport perimeter, would be targeted by the Islamic State
Speaker 1: Corps one as we saw UH, and that had certainly
Speaker 1: slowed down how how we're getting people to the airport.
Speaker 1: And so if we're looking at the August thirty one deadline,
Speaker 1: there are things that we need to keep in mind.
Speaker 1: And the first is that our European partners have already
Speaker 1: said that they're basically pacing down evacuations because the U. S.
Speaker 1: Militaries won't be able to promise security. Uh. And certainly,
Speaker 1: as we're looking at the security situation today, even the
Speaker 1: security of the US military brooch was very kind of
Speaker 1: uh tenuous bill ferries, you know, with this situation rapidly deteriorating,
Speaker 1: what can we expect? Are you hearing anything from uh
Speaker 1: the from U S. Officials when it comes to potentially
Speaker 1: upping once again the amount of American troops in Afghanistan.
Speaker 1: We're not hearing anything like that. I think, UM, I
Speaker 1: think there's gonna be a calculus uh at the White
Speaker 1: House about you know. UH. They've been saying for days
Speaker 1: that the longer troops are there, the more the more
Speaker 1: at risk they are, the more dangerous the situation becomes.
Speaker 1: UM So I wouldn't. I wouldn't for now expect them
Speaker 1: to stick with that August thirty first deadline to try
Speaker 1: to get everybody out. And but I agree, it's made
Speaker 1: it much more difficult to try to get any Americans
Speaker 1: who remain in Afghanistan who wants to leave. Uh And
Speaker 1: we really don't know the universe of those people, whether
Speaker 1: it's five hundred or more. Um, but it will make
Speaker 1: it much more difficult to get them out, especially if
Speaker 1: they're not already in cobble. All Right, we're going to
Speaker 1: continue this conversation. Bill. I know you've got a lot
Speaker 1: on your play today. UM So we're gonna let you go.
Speaker 1: Bill Ferries, he's National Security team leader at Bloomberg News,
Speaker 1: keeping us up to date on the moving situation in Afghanistan.
Speaker 1: Joiningist on the phone from Washington, d C. We're gonna
Speaker 1: come back though with Katherine Zimmerman. She's fellow at the
Speaker 1: American Enterprise Institute, a conservative think tank based there in
Speaker 1: the nation's capital. She's joining us from d C. You
Speaker 1: are listening to Bloomberg Business Week Carol Master along with
Speaker 1: Tim Stanivik in our Interactive Broker studio. A reminder that
Speaker 1: we are expected to hear a briefing from the White
Speaker 1: House as well as the Pentagon on Afghanistan. We will
Speaker 1: take you their live as soon as it happens. This
Speaker 1: is Bloomberg Radio. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim sten It on Bloomberg Radio,
Speaker 1: crossing the Bloomberg terminal headline from the Associated Press. Eleven
Speaker 1: marines and a Navy medic killed in the Afghanistan. Uh,
Speaker 1: those explosions in that country. So continuing to get some
Speaker 1: updates Tim on the situation there, and we'll continue to
Speaker 1: bring those updates as soon as we get them. As
Speaker 1: Carol mentioned moments ago, we are waiting a press conference
Speaker 1: from the White House and also one at the Pentagon.
Speaker 1: Will bring those to you live when we get them
Speaker 1: as well. In the meantime, let's get back to Katherine Zimmerman,
Speaker 1: a fellow at the Conservative American Enterprise Institute, joining us
Speaker 1: on the phone from Washington, d C. Katherine, Uh, I
Speaker 1: want to try to understand from you to what extent
Speaker 1: you think the President Biden's hands were tied at least
Speaker 1: in the UH withdrawal, not necessarily the timing, but the
Speaker 1: fact that the United States had to withdraw from Afghanistan,
Speaker 1: given that the U. S And Taliban signed a deal
Speaker 1: UH back in the early part of in order to
Speaker 1: end this war, and for the US to ultimately withdraw,
Speaker 1: that of course happened under the Trump administration. President Biden
Speaker 1: made his own decision to withdraw, and I think that
Speaker 1: that has been missed in all of this. The Trump
Speaker 1: administration did sign a deal, but the Taliban was not
Speaker 1: upholding its end of the deal. And the two key
Speaker 1: points that the Taliban weren't executing was breaking ties with
Speaker 1: al Qaeda. We actually saw the Taliban continuing to support
Speaker 1: al Qaeda and al Qaeda spreading in the country after
Speaker 1: it had signed the deal. And the second point was
Speaker 1: reducing the level of violence inside of Afghanistan. And certainly
Speaker 1: the idea was to make space for a political negotiation
Speaker 1: that would have allowed some sort of transitionary government, and
Speaker 1: the Taliban simply escalated and we know the impact of
Speaker 1: that now. So, Catherine, what would you say the the
Speaker 1: what would you rather have had the Biden administration do
Speaker 1: when it when it entered office in January of this year.
Speaker 1: Would you like to have seen US troops stay there?
Speaker 1: I have advocated for the ongoing light footprints that the
Speaker 1: US had gotten to by the by the point that
Speaker 1: the Biden administration took office, we had troops inside of Afghanistan,
Speaker 1: which sounds like a lot except when you look at
Speaker 1: what they were doing, which was primarily supporting the Afghan
Speaker 1: national security forces who were doing the brunch of the
Speaker 1: fighting against the Taliban. And then, of course the part
Speaker 1: that matters for the United States, our troops were the
Speaker 1: ones with the high end counter terrorism capabilities going after
Speaker 1: the Taliban, uh and and al Kaina and Islamic state
Speaker 1: elements that that we're posing terror threats. But I want
Speaker 1: to go back to Katherine. You know, there are so
Speaker 1: many uh different groups within Afghanistan. Um. I think fourteen
Speaker 1: different ethnicities. Uh, There's just so many different groups. Would
Speaker 1: it have been impossible to ultimately get an ideal situation
Speaker 1: there um and with the Taliban kind of following through
Speaker 1: on its commitment and in order for the US to
Speaker 1: withdraw anytime soon. Yes, I think when the Trump administration
Speaker 1: negotiated the deal, it was very clear that there wasn't
Speaker 1: going to be a political resolution for the reasons that
Speaker 1: you lay out, and the fact fundamentally that the United
Speaker 1: States had shifted years prior from engaging on on the
Speaker 1: the ongoing civil war in Afghanistan. And I think that's
Speaker 1: something that we don't actually separate in our heads enough.
Speaker 1: Is the counter terrorism fight that the United States has
Speaker 1: an Afghanistan and the civil war against the Taliban that
Speaker 1: was ongoing. You understand this situation, You understand this region
Speaker 1: of the world. Thomas Friedman of the New York Times recently,
Speaker 1: writing in an opinion piece, you know, but citing how
Speaker 1: more than seventy Afghanistan's population is under twenty five years old,
Speaker 1: Most of them, he writes, know nothing about the Taliban um.
Speaker 1: How will that create the future of Afghanistan. It's a
Speaker 1: great question. And as we're looking at what the future
Speaker 1: of Afghanistan looks like, you know, the Taliban have taken
Speaker 1: power again. But the Afghanistan today is are different from
Speaker 1: the one twenty years ago. And as you mentioned, the
Speaker 1: most of the population have very different expectations than the
Speaker 1: population did when the Taliban was in power in through
Speaker 1: two thousand one. So there are much higher demands on
Speaker 1: any government of Afghanistan today where where people in the
Speaker 1: urban centers in Kabul and and other major cities do
Speaker 1: expect government service to be provided. So that's one of
Speaker 1: the reasons why we we're watching the Taliban's actions carefully
Speaker 1: and why the Taliban are so worried about the economic
Speaker 1: collapse that has followed their takeover of the country. What
Speaker 1: kind of economic pressure can the international community put on
Speaker 1: the Taliban in order to use sticks more so than carrots,
Speaker 1: or perhaps even carrots to push the Taliban in a
Speaker 1: direction that the Afghan people want. We've already seen the
Speaker 1: international community try to use some of those those sticks
Speaker 1: where of course, UH, the I m F has has
Speaker 1: kind of frozen ongoing relations until the situation with the
Speaker 1: Afghan government is settled. UH, and the amount of assistance
Speaker 1: that has been provided by the international community to Afghanistan
Speaker 1: has helped to prop up the government that was in power,
Speaker 1: and so almost all Western nations have frozen that for
Speaker 1: the time being. My big concern is that we are
Speaker 1: looking at a growing humanitarian situation, and of course there
Speaker 1: is a careful balance between our national security and UH,
Speaker 1: you know, helping precipitate a humanitarian crisis in Afghanistan, and
Speaker 1: so you know what we might see is humanitarian assistance
Speaker 1: needing to flow into Afghanistan, which the Taliban was only
Speaker 1: used to build their own legitimate say, Katherine, thank you
Speaker 1: so much for being with us. Katherine Zimmerman, fellow at
Speaker 1: the American Enterprise Institute, with us on the phone from
Speaker 1: d C. You're listening to Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes. Tim Stenovic on Bloomberg Radio.
Speaker 1: The international cover Bloomberg Business Week this week. It's about
Speaker 1: September next month. How it promised a return to normal, Tim,
Speaker 1: But we're just a few days away and it's not
Speaker 1: gonna happen. It's not I was gonna say you got
Speaker 1: to travel outside of the United States, perhaps North America
Speaker 1: to see this cover, but you actually don't, because it's
Speaker 1: available at Bloomberg dot com slash business Week, and also
Speaker 1: available of course on the Bloomberg termittal. It is a
Speaker 1: fantastic cover to the international edition. It's a calendar of September.
Speaker 1: All these dates are circled but scribbled out. And that's
Speaker 1: exactly how I think a lot of employees and certainly
Speaker 1: offices and managers feel about the return to work. We're
Speaker 1: still dealing with the health pandemic, and you know, Afghanistan,
Speaker 1: that crisis also reminding us that things are not normal
Speaker 1: as well. So let's get into it. The story by
Speaker 1: Bloomberg News US economic reporter read pick her to m.
Speaker 1: Bloomberg US economy reporter Olivia Rockman read she joins us
Speaker 1: now on the phone in Washington. It is such a
Speaker 1: smart story. Read. We really thought, if you go back
Speaker 1: six eight months, we thought September it was going to
Speaker 1: be quote unquote normal. Yes, so thank you so much
Speaker 1: for having me. So Yeah. The idea for this story
Speaker 1: mainly came from the fact that back several months ago,
Speaker 1: I think May is kind of when I think of
Speaker 1: it as being the main moment where um, we were
Speaker 1: all kind of looking to September and the fall more
Speaker 1: generally to be um a little bit more normal and
Speaker 1: at least a turning point point of some kind for
Speaker 1: the US economy. And and back then, I mean, with
Speaker 1: the data that we had it it looks like vaccinations
Speaker 1: were rising rapidly, and it looks like that we'd reached
Speaker 1: that seventy five threshold of vaccination of the population in
Speaker 1: September it looks like schools, we're going to be back
Speaker 1: in person and be normal. Um end A lot of
Speaker 1: companies firmed up their return to office dates, and I
Speaker 1: think the whole point of this story was pointing out
Speaker 1: that that is not the circumstances that we're dealing with
Speaker 1: as we're rolling into September now. Insteada has thrown a
Speaker 1: huge risk in that right, companies, as you write, like Alphabet's,
Speaker 1: Google black Rock, they've pushed returned to office states to October.
Speaker 1: Delta has disrupted already strained supply chains, China temporarily close
Speaker 1: to terminal at one of the world's busiest ports to
Speaker 1: quarantine dock workers. That delayed shipments of materials that businesses
Speaker 1: and factories needs. So take us into the economic impact
Speaker 1: of this. The economic implications of this, we talked a
Speaker 1: little bit about them a few minutes ago. If we're
Speaker 1: not you know, then just very minorly right, if we're
Speaker 1: not commuting in, we're not hitting tolls and in municipalities,
Speaker 1: were not spending money on lunches outside of the office.
Speaker 1: But beyond that, what are the bigger implications? So I
Speaker 1: think the bigger implications for now is that we don't
Speaker 1: really know. I mean, we won't start getting a lot
Speaker 1: of the data that starts to show us, um what
Speaker 1: Aug looks like until we get into September. And we
Speaker 1: also don't know if the delta wave is going to
Speaker 1: follow a similar kind of peak as the UK did,
Speaker 1: or if it will follow a different path. Um. But
Speaker 1: we pointed this out in the story. But some of
Speaker 1: the high frequency indicators are starting to show some signs
Speaker 1: that consumer behavior is changing a little bit. And I
Speaker 1: think when we think about the impact of consumer behavior changing, UM,
Speaker 1: we need to keep in mind of what the profile
Speaker 1: for economic growth is right now. So for a huge
Speaker 1: portion of the pandemic from consumer spending was based on
Speaker 1: goods UM. But now consumer spending is um wholly dependent
Speaker 1: on the snap back and services spending, and even just
Speaker 1: some changes in consumers behavior not dining out as much,
Speaker 1: not traveling, those kind of things that we we thought
Speaker 1: we're gonna continue, um really hot into the fall. Um
Speaker 1: that could have UM pretty big implications, all right. So
Speaker 1: as we all keep crossing our fingers and our legs
Speaker 1: and our arms in hopes of getting back to normal
Speaker 1: sooner rather than later, what visibility do we have because
Speaker 1: it certainly feels different read than where we were, of
Speaker 1: course a year ago or even eight months ago. I
Speaker 1: think that's what you know. Powell has talked about this before,
Speaker 1: and I think it was in the July press conference
Speaker 1: when he talked about how with every kind of new
Speaker 1: wave of delta, there there seems to be a little
Speaker 1: bit less reaction in terms of the consumer response. And
Speaker 1: I think we're certainly seeing that now because you know,
Speaker 1: when I walk around DC as people restaurants, I see
Speaker 1: UM a lot of people who are UM vaccinated and
Speaker 1: feel great about the risks that they're taking UM to
Speaker 1: part taking these activities. But then I also know people
Speaker 1: who are canceling their trips and are really nervous about
Speaker 1: sending their kids back to school. And so I think
Speaker 1: we're all so seeing this divergence as we've seen throughout
Speaker 1: the course of the pandemic, but we're really seeing a
Speaker 1: divergence in terms of risk assessment UM. And I think
Speaker 1: you know how we fall on that really depends on
Speaker 1: people's own comfort levels rather than you know, geography or
Speaker 1: UM whatever it may be. Okay, So enter fed chair
Speaker 1: at your own Powell. That's his enter music tomorrow, Jack,
Speaker 1: essentially his virtual entrance. Look, you know, if we had
Speaker 1: a cowboy hat for every time we talked about the FETE,
Speaker 1: as Carol said earlier than we'd have you know, we'd
Speaker 1: we have spent seven million dollars on cowboy hats this year.
Speaker 1: But the fact is is investors are awaiting what he
Speaker 1: says tomorrow, and I'm wondering how the high frequency data,
Speaker 1: how the decline of passengers going through t s A
Speaker 1: checkpoints or people in hotspots who are not dining out
Speaker 1: with open table um, how that changes. Among other things,
Speaker 1: the way that the FETE is thinking about tapering are
Speaker 1: the way that the FETE is thinking about pulling back
Speaker 1: on some of the stimulus. I think from the perspective
Speaker 1: of tapering, it doesn't seemed to have had a huge impact.
Speaker 1: I mean, the biggest clear impact that the delta has
Speaker 1: had on the FED recently is the fact that Jackson
Speaker 1: Hole shifts to being shifted to being virtual from in
Speaker 1: person and um a very short amount of time and
Speaker 1: right before it was actually happening. UM. But in terms
Speaker 1: of what that means for keeping I think, UM, there's
Speaker 1: been a lot of FED speak out recently, UM where
Speaker 1: where folks are encouraging on papering sooner rather than later.
Speaker 1: So I don't know how much Delta is playing into
Speaker 1: that decision, but I'm definitely curious to see how Powell
Speaker 1: talks about that in his Jackson Hole speech, since he
Speaker 1: definitely got peppered with a lot of questions about Delta
Speaker 1: in the last press conference. Well, here's a number for
Speaker 1: for us, and you've got it in your story. You
Speaker 1: talk about the progressive think tank, the Century Foundation, estimates
Speaker 1: seven and a half million workers will lose all unemployment
Speaker 1: benefits on September six, when the main pandemic programs. And
Speaker 1: that's a lot of Americans, it is. And how do
Speaker 1: the ripple effects that it has throughout the economy and
Speaker 1: also what does it do for job for the jobless
Speaker 1: who exactly potentially do you go and start working again?
Speaker 1: All right, it's a great story, a great read, and
Speaker 1: a lot of information in it. Read. Thank you so much,
Speaker 1: really appreciated. Of course, that's Bloomberg News US economic reporter
Speaker 1: Read Pickard jointing us on the phone from Washington, d C.
Speaker 1: It is the international cover store, but as you said,
Speaker 1: you can find it at Bloomberg dot com. Ro Marco
Speaker 1: Journal Now, but you let me drive. No, no, no
Speaker 1: night please, I'll do the riding drivel. I want to drive,
Speaker 1: just drive baby, good questions, drying This is the drive
Speaker 1: to the globe. Give me thanks, We'll drying us down
Speaker 1: on Bloomberg Radio. Is it is time for the drive
Speaker 1: to the clothes And I'm just looking at the equity
Speaker 1: trade Doug of course, just breaking down the numbers. We're
Speaker 1: hovering near or loads of this session, as Doug mentioned,
Speaker 1: about half a percent on the S and P dow
Speaker 1: down a hundred seventy two points, also down a half percent.
Speaker 1: Same thing for the NASTAC on a percentage basis, but
Speaker 1: again hovering near our highs on a day where we've
Speaker 1: seen several couple of explosions in Afghanistan. Let's get to
Speaker 1: it with Randy Watts, Randy Watts's chief investment strategist at
Speaker 1: O'Neil Global Advisors, joining us once again on the phone
Speaker 1: from Miami. Wow, Randy, you heard me, And take a
Speaker 1: deep breath a big side there, because that's the type
Speaker 1: of day it has certainly been. Like. Uh, when we
Speaker 1: talk about macro, we often talk about what's happening with
Speaker 1: trade and what's happening, of course with the Federal Reserve
Speaker 1: and with the virus. But today it was a different
Speaker 1: story with those two explosions in Afghanistan. We did see
Speaker 1: the equity markets reach session lows just following that news. Um,
Speaker 1: how did you watch it? Well? First off, thanks for
Speaker 1: having me back. And I do want to say my
Speaker 1: thoughts and prayers go out to the families of the
Speaker 1: servicemen and women and others who were killed in those
Speaker 1: two bombings today in Kabul. Obviously, it's a very bad
Speaker 1: situation my understanding, as they have over five thousand people
Speaker 1: at the airport right now. They're still trying to get out,
Speaker 1: so it's a very tenuous situation and our thoughts and
Speaker 1: prayers are with those people and hoping get them evacuated safely.
Speaker 1: I think what's happening in the Afghanistan is a big deal.
Speaker 1: I think it raises the specter that there is going
Speaker 1: to be more terrorist activity the US is going to
Speaker 1: have to deal with, uh that Afghanistan is not stabilized
Speaker 1: and it's not going to be as quick and easy
Speaker 1: and exitus that maybe some of the some of the
Speaker 1: procrastinator procrastinators thought. So I do. I am a little
Speaker 1: worried about that, and I think anytime there's geopolitical instability,
Speaker 1: that's bad for marketing. So yeah, let me just jump
Speaker 1: into that a little more randy. Does that mean that
Speaker 1: that you see this playing out as a market story
Speaker 1: as well? Like, what what effect does that instability actually
Speaker 1: have on on equity markets and financial markets? I think
Speaker 1: it just adds another kind of negative element to some
Speaker 1: of the other macro negative elements we're dealing with with COVID.
Speaker 1: I don't think it's the dominant story. I think the
Speaker 1: dominant story remains COVID and how we're going to get
Speaker 1: through that and recover from that. But I think it
Speaker 1: does just remind people up the world's a dangerous place,
Speaker 1: and when the US withdraws from places, oftentimes bad things happen.
Speaker 1: And I think we maybe haven't heard the end of
Speaker 1: of things that are going to affect the US and Afghanistan.
Speaker 1: Just because we leave doesn't mean there can't be other
Speaker 1: negative occurrences there like crop up well. And what's interesting
Speaker 1: is I was thinking about this as I watched the
Speaker 1: market trade um branding and good to be talking with
Speaker 1: you again. I was kind of comparing it to the
Speaker 1: First Persian Gulf War, where we saw a huge market impact,
Speaker 1: obviously in the energy markets. I think about after nine eleven,
Speaker 1: to have a terrorism incident right here on US domestic soil,
Speaker 1: a much more severe market impact initially. And I'm not
Speaker 1: saying and I agree with you. My heart's uh and
Speaker 1: thoughts are going out to those friends and families of
Speaker 1: anyone who has lost their lives in Afghanistan. But I
Speaker 1: do feel like the market decline has not been uncontrollable,
Speaker 1: if you will, It's been very measured, and I'm trying
Speaker 1: to understand what that tells us. I think right now
Speaker 1: the mark it still isn't sure exactly how Afghanistan is
Speaker 1: going to play out over the over the longer run.
Speaker 1: I think the fear is does that become a country
Speaker 1: that becomes a breeding ground for further terrorist activity or
Speaker 1: does it stabilize. I think that is obviously a question
Speaker 1: that's up in the air, and whether or not we're
Speaker 1: going to really meet this August thirty first deadline which
Speaker 1: we've imposed on ourselves to to get all of our
Speaker 1: personnel and people out of there. So I think I
Speaker 1: think that remains to be seen. I think this just
Speaker 1: does remind people though that the again the world's a
Speaker 1: dangerous place, and when the US withdraws from places oftentimes
Speaker 1: that let's uh negative parties of faster or grow. All right,
Speaker 1: So we can separate ourselves from this, and I understand
Speaker 1: it's not so easy to do, but if we can
Speaker 1: think about, um, what else is going on? And I
Speaker 1: do want to mention a headline crossing present bind to
Speaker 1: speak about Afghanistan from the White House today, So we're
Speaker 1: monitoring that as well. If we separate out what's going
Speaker 1: on in Afghanistan right now, the major talking point this week, Grandy,
Speaker 1: as you would guess, has been about Jackson Hall and
Speaker 1: what we might get from j Powell. What are you anticipating, uh,
Speaker 1: if anything, and how it might maybe impact your market. Think. So,
Speaker 1: I think we're still going to hear from Powell, and
Speaker 1: and again I do another crystal ball. I'm often wrong,
Speaker 1: but I think we're still going to hear from him
Speaker 1: that the taper is going to start at some time
Speaker 1: in the fourth quarter this year, and the FED, I think,
Speaker 1: really wants to be done by the end of next year.
Speaker 1: And so the question is really the pace of that. Obviously,
Speaker 1: U St. Louis of Federal Reserve Bank President Bullard today
Speaker 1: talked about a quicker taper where they would be done
Speaker 1: by the end of Q one. I think that's unlikely.
Speaker 1: I think, especially given what's going on with the delta
Speaker 1: variant of COVID, that that they're not going to move
Speaker 1: that quickly. If you remember the last time around they
Speaker 1: did this, they did it in in two thousand and thirteen.
Speaker 1: They started in January of two thou and fourteen, and
Speaker 1: they finished in October of two thousand and fourtune, they
Speaker 1: took ten months. They were buying about eighty five billion
Speaker 1: a month back then. Right now we're doing about a
Speaker 1: hundred and twenty billion a month. I do think it's
Speaker 1: going to be more of like that kind of a
Speaker 1: pace of taper. Then it's going to be one where
Speaker 1: they try to do it all in six months. But
Speaker 1: I think the Fed does want it to finish in
Speaker 1: two because I think they want the flexibility to raise
Speaker 1: rates if they need to. In So, what is the
Speaker 1: what is the what is the market listening for? With
Speaker 1: Fed Chair Powell's virtual remarks tomorrow? Right now, the mark
Speaker 1: is expecting that the taper starts in December and that
Speaker 1: they do about ten billion a month in reductions, So
Speaker 1: it takes them twelve months, and they finished kind of
Speaker 1: December next year November next year. I think if if
Speaker 1: if the rate is different than that, or if it
Speaker 1: starts earlier and later, that can affect the market. I
Speaker 1: think if it starts much later, that could have set
Speaker 1: market participants because they feel like inflation continues to get
Speaker 1: a little bit out of hand. If it's a lot
Speaker 1: faster than people expected, that could also cause a little
Speaker 1: bit of a dislocation. One thing that's important for everyone
Speaker 1: to look at is, remember tomorrow we're going to get
Speaker 1: the personal consumption price index for July. If we go
Speaker 1: back and remember the June one was up four percent,
Speaker 1: which was the largest increase since July two thousand and eight.
Speaker 1: The forecast for July is up four point one. So
Speaker 1: it's possible that we're going to get a negative number
Speaker 1: there tomorrow, and that's gonna make market participants anxious about
Speaker 1: when the set does start to taper so they can
Speaker 1: try to maybe eventually move ahead on the inflation. So
Speaker 1: having said that, we have talked a lot randy about
Speaker 1: investors coming in and buying the dip here, how constructive
Speaker 1: is this market to be a buyer right now? Would
Speaker 1: you rather be a seller. I think that the thing
Speaker 1: about the market is it's not quite as good as
Speaker 1: it appears on the surface. Only sixty of the SMP
Speaker 1: is above it's fifty day, but only thirty six percent
Speaker 1: of the NAS deck is above it's fifty days, so
Speaker 1: that's actually not a great number. I think the issues
Speaker 1: are are really twofold. First is when is delta peak?
Speaker 1: And the second is what kind of stimulus we're gonna
Speaker 1: get out of Washington and we're going to get both
Speaker 1: of those bills out of out of the out of Congress.
Speaker 1: Are we're just going to get one of them? And
Speaker 1: how that's going to impact the economy. I think people
Speaker 1: are a little in a little bit of a weight
Speaker 1: and C mode on both of these issues, and that's
Speaker 1: why they've been moving into some of the bigger, more
Speaker 1: stable names, particularly tech. All Right, wait, you have to
Speaker 1: repeat that again because Tim and I are going to
Speaker 1: want to say this, it's only the s andps above
Speaker 1: it's fifty day, and how much of the NASDAC. Only
Speaker 1: thirty six of the nastic is above its fifty day
Speaker 1: moving average. That means breadth has not been good, particularly
Speaker 1: in the nastack investors are rotating into larger cap, more
Speaker 1: defensive stocks, particularly in technology, while they try to get
Speaker 1: a handle on what's going to happen with all three
Speaker 1: things you mentioned, the FED, the delta, and what kind
Speaker 1: of stimulus we're gonna get out of Washington. I think
Speaker 1: investors are maybe holding some money back until they see
Speaker 1: that so they can then make better, more informed decisions.
Speaker 1: Gotta run always wish we had more time. Randy B. Woll,
Speaker 1: Randy Watt's chief investment Strategies that own Neil Global Advisors,
Speaker 1: on the phone in Miami. Thanks for listening to Bloomberg
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