Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along
Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you
Speaker 1: insight from the best and economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com,
Speaker 1: and of course on the Bloomberg Terminal. Sarah House has
Speaker 1: no idea what we're talking about. She'll save us with
Speaker 1: Wells Fargo, their senior economists. Sarah, this is an exceptional
Speaker 1: statement and report for Jerome Powell. I think this is
Speaker 1: another report for a second month in a row that
Speaker 1: does give a lot of credence to that transitory debate.
Speaker 1: So I think we still see some quite a bit
Speaker 1: of pressure coming through the pipeline if you look at
Speaker 1: what's happening, both in terms of supply change on the
Speaker 1: good side, what's happening with labor and wages. But I
Speaker 1: think what we're seeing is at most eye popping rate
Speaker 1: of inflation we saw this spring is coming off the boil,
Speaker 1: and I do think that gives the Fed a little
Speaker 1: bit more time to wait some progress in the labor market.
Speaker 1: I look, Sarah at the labor market and ties and
Speaker 1: how does this inflation report tie into wage inflation? Are
Speaker 1: they linked well? I think where you're seeing some of
Speaker 1: the some of the give back in things like used
Speaker 1: cars prices, I think that is somewhat divorced from what
Speaker 1: we're actually seeing in the labor market. So even as
Speaker 1: we did see a little bit of soft mean in
Speaker 1: the rate of food inflation, we're still seeing quite a
Speaker 1: bit of pressure in the restaurant sector, even in in
Speaker 1: grocery stores. And I think if you look at the
Speaker 1: run rate there and in terms of the monthly print,
Speaker 1: you're you're still seeing strong numbers. And so I think, um,
Speaker 1: we are seeing some of that wage pressure begin to
Speaker 1: filter through, and I think in many areas it's it's
Speaker 1: just beginning to start, particularly in the service side, where
Speaker 1: it does take longer to show up in the inflation numbers.
Speaker 1: What kind of number do you think would make the
Speaker 1: FED comfortable at the town of the year, Sarah, What
Speaker 1: do you think they need to see? Does a three
Speaker 1: handle get it down? Do they give them the comfort
Speaker 1: to say, yes, it's transitree, let's stick with this. I
Speaker 1: think it's more about the numbers you're seeing in an
Speaker 1: inflation expectation. So Yes, we had a very hot consumer
Speaker 1: inflation expectations number coming from the New York Siety yesterday.
Speaker 1: But if you look at the FEDS preferred measure, that
Speaker 1: Common Inflation Index, it's still well within its historic range.
Speaker 1: So that's taking into account what's happening in tips markets,
Speaker 1: what's happening with the Michigan numbers, and well, you've seen
Speaker 1: inflation expectations pick up, there's still at levels that are
Speaker 1: overall consistent with the FEDS, with the FEDS target, and
Speaker 1: so I think that buys them time no matter what
Speaker 1: you're seeing in terms of the CORPC tof later even
Speaker 1: or headline inflation at the end of the year. So
Speaker 1: if you're just chanting to get on READYO on CVS downside,
Speaker 1: surprise time on the inflation print team transit treat getting
Speaker 1: a win hit scoring a girl future is positive full
Speaker 1: tenth of one percent on the SMP advancing, there's seventeen
Speaker 1: points on a SMP yields not doing much off the
Speaker 1: back of this number. Later this comes down to oneing
Speaker 1: now reachs house sales print, then SA to the Fed
Speaker 1: next week. Yeah, I mean, there's a couple of ways
Speaker 1: to read this, and one hand it could be transitory
Speaker 1: the Fed's getting what they want. In the other hand,
Speaker 1: this could be that perhaps the economy is softening more
Speaker 1: than expected at a time when we have a prolonged pandemic. Sarah,
Speaker 1: can you weigh in on what this means? If the
Speaker 1: FED is not getting what they want, if you don't
Speaker 1: see necessarily material labor market improvement like we didn't necessarily
Speaker 1: with a disappointing previous report, what do they do? Do
Speaker 1: they just keep printing money? I mean, do they just
Speaker 1: keep buying bonds? Or they have to change their guidance
Speaker 1: in an additional way. I think they you continue to
Speaker 1: see the status quo, so I think you just get taper.
Speaker 1: The taper gets pushed off further. Um. So I think
Speaker 1: this print suggests that maybe tips the scales a little
Speaker 1: bit more in favor of December rather than a November announcement.
Speaker 1: But I think they keep the current policy in place
Speaker 1: for a little bit longer. You know, I think it's
Speaker 1: important to remember that while yes, we did get a
Speaker 1: disappointing employment report in August, we're still adding jobs. We're
Speaker 1: still seeing the unemployment rate decline. You shall seeing at
Speaker 1: least some movement in terms of labor force participation and
Speaker 1: and the supply, even if it is slow, but accumulatively, accumulatively,
Speaker 1: you're still seeing things move in the right direction. You
Speaker 1: are getting closer to to the feds um to the
Speaker 1: Fed's goals. It's just maybe taken a little bit longer,
Speaker 1: and so that's gonna have them keep policy in place longer.
Speaker 1: Will we look forward to that retail sales figure later
Speaker 1: in the week, Sarah, what is the consumer able to
Speaker 1: do at this point given the roll off of some
Speaker 1: of the stimulus checks and the fact that people still
Speaker 1: are not necessarily getting back into a labor market still
Speaker 1: hobbled in parts by COVID, Right, So I think we're
Speaker 1: going to see a pretty weak number. And when it
Speaker 1: comes to the retail sales, part of that has to
Speaker 1: do with the fact of what we're seeing in terms
Speaker 1: of autos, just where how much we saw sales plummet.
Speaker 1: But I think if you look at the overall position
Speaker 1: of consumers, so we are seeing it weaken a little bit.
Speaker 1: So balance sheets are still good, you shtill have access savings,
Speaker 1: but given the run rate of inflation of late, even
Speaker 1: with today's softer number, it's woodling a way of ethose savings.
Speaker 1: So when you factor in also the unemployment benefits rolling off,
Speaker 1: that that buying power of consumers is weakening. And so
Speaker 1: that does suggest that you are at least getting somewhat
Speaker 1: closer to the supplying demand uh imbalance coming coming better aligned.
Speaker 1: But it's going to take some time, Sarah. Let me
Speaker 1: talk the unspeakable here, which I believe I haven't heard
Speaker 1: come up. What if this is a FED. I'm looking here,
Speaker 1: folks at the wonderful f O m C function on
Speaker 1: the Bloomberg. What if this is a FED that's not September,
Speaker 1: not December, but has to stagger to the decision tree
Speaker 1: of January of next year. What is its signal if
Speaker 1: they have to wait, wait, wait, Well, I think it
Speaker 1: suggests that to some extent the virus is still very
Speaker 1: much in control. So I don't think it's completely out
Speaker 1: of out of the room possibility that even as we're
Speaker 1: seeing delta cases level off, you get another way of
Speaker 1: calm from the winter. And so I think it suggests
Speaker 1: that this is not the necessarily the rapid immediate rebound
Speaker 1: a lot of folks were looking for earlier earlier this spring.
Speaker 1: But there's still a lot to work through both in
Speaker 1: terms of the virus. There's still a lot of frictions
Speaker 1: in the economy, whether it's to the labor market or
Speaker 1: supply chains, and those are going to take some time
Speaker 1: to work out, and so the FED might might have
Speaker 1: to to hold hold course for for someone longer. Sarah,
Speaker 1: thank you. Always go to hit from you Santa House
Speaker 1: West founda security senior economists also associated with US as
Speaker 1: Barry Dholtz, Bloomerg opinion columnists D Holts Wealth Management. Barry,
Speaker 1: thank you so much for joining. I love your essay
Speaker 1: this weekend Housing. We need a new dishwasher. The some
Speaker 1: pump has been used in Hurricane Ida. I love home ownership.
Speaker 1: Is it worth it? You've got to live somewhere a right,
Speaker 1: And as someone who's lived in rentals and owned conda
Speaker 1: and my own house, it's nice not to live in
Speaker 1: a off white no change to any of the living circumstances.
Speaker 1: The old joke is no one washes a rented car,
Speaker 1: nobody improves a rented apartment. So if you want an
Speaker 1: updated kitchen, if you want to paint your house a
Speaker 1: different color or put in new carpet of stuff, ownership
Speaker 1: is how you manage to do that. A lot of
Speaker 1: the metrics that show that real estate is a bad
Speaker 1: investment kind of ignore the fact that as an owner occupier,
Speaker 1: you gotta live somewhere, and that's where homeowners came well.
Speaker 1: But you know, I mean the home renovation A Brando said,
Speaker 1: a renovation it was a quarter of a million dollars.
Speaker 1: But you know, Barry, when you when you look at
Speaker 1: home ownership, what's the actual phenominal or real return of
Speaker 1: home ownership versus owning the standard? In real terms, it's
Speaker 1: probably flat to negative. Once you work in, you gotta
Speaker 1: pay taxes, there's a ton of maintenance and upkeep um
Speaker 1: net relative to inflation. You're lucky if it's a break
Speaker 1: even if not worse, but it keeps coming back to
Speaker 1: what you pay is a key issue. And the thing
Speaker 1: to remember is if you're putting ten percent down and
Speaker 1: you're not buying the property out right, um, it's a
Speaker 1: there's a lot of leverage in that, and so those
Speaker 1: return characteristics are different than let's say black Stone running
Speaker 1: around and buying up multifamily units and farmland and everything else. Um.
Speaker 1: Just to be very clear, the quarter a million dollar
Speaker 1: right and renovation really accounts for basically putting in a
Speaker 1: new divider for my silverware. So it's not exactly the
Speaker 1: same scale. I will just say that just to set
Speaker 1: the scale straight. Very just sort of follow on though
Speaker 1: with this idea we started talking about banks. We moved
Speaker 1: the real estate market a pivotal moment for urban areas
Speaker 1: as we try to get back to the office at
Speaker 1: a time where the variant is really delaying a lot
Speaker 1: of those plans to get back to the office. How
Speaker 1: significant is it the longer that some of these two
Speaker 1: lays go on for property values in urban centers. So
Speaker 1: so it's that's a really complex question. And I'll give
Speaker 1: you like a thirty thousand foot view. When you look
Speaker 1: around places like San Francisco, in Manhattan, there's a ton
Speaker 1: of new office space that has gone up to meet
Speaker 1: the pre pandemic demand. Suddenly, the pandemic has taught us, hey,
Speaker 1: we've really been inefficient in how we use our time,
Speaker 1: both going to the office, commuting, etcetera. And so it
Speaker 1: appears that there's now an excess of office space and
Speaker 1: a shortage of I don't even want to say affordable
Speaker 1: house and just reasonably priced housing in major cities and
Speaker 1: if you remember, we we just went through the twenty
Speaker 1: year anniversary of No. Eleven Post No eleven Lower Manhattan
Speaker 1: converted to a very residential area, lots and lots of
Speaker 1: office buildings converted. I wouldn't be surprised to see something
Speaker 1: like that take place over the next couple of years
Speaker 1: in major urban centers to adjust that that imbalance between
Speaker 1: supply and demand for both too much office space and
Speaker 1: too little residential space. So going forward, are you going
Speaker 1: back to the office And we talked a lot about
Speaker 1: this back in the day, and I'm wondering, given your
Speaker 1: read on the breath of Wall Street in terms of
Speaker 1: what they're doing, where they are working for, what's the
Speaker 1: zeitgeist right now on that front. So a handful of
Speaker 1: companies originally had September fifteenth as their target. A bunch
Speaker 1: has been pushed pushed back to October fift I've been
Speaker 1: trying to get into the city at least once a week, um,
Speaker 1: and as has all my colleagues in the office. UM. Now,
Speaker 1: the there's a chicken and egg issue in that a
Speaker 1: lot of mass transit has been running on weekend schedules,
Speaker 1: not normal peak commute schedules. I think a bunch of
Speaker 1: that along railroad Metro North. I think that return earns
Speaker 1: back to its normal schedule, or it was scheduled to
Speaker 1: September fift so once you can. I was at a
Speaker 1: conference yesterday at the Javit Center, at the SALT Conference,
Speaker 1: and on the way home yesterday at to thirty, it
Speaker 1: was bumped upumper traffic in a car, and I think
Speaker 1: that's because people are uncomfortable either riding the trains or
Speaker 1: they're just running to and frequently. Once things get back
Speaker 1: to normal on the commuter rails and other forms of
Speaker 1: mass transit, you're gonna start to see people move back
Speaker 1: into the office a little more regularly. Very thank you.
Speaker 1: How is the SALT conference? It was interesting. I sat
Speaker 1: down with Steve Cohen of Points seventy two and Dmitri Blisanis,
Speaker 1: Mike Rockefeller of um Woodbine and Alana um Gold. Seemed fascinating,
Speaker 1: fascinating conversation. Nobody cares. What did say about the Mets.
Speaker 1: He's having a lot of fun with the team, he's
Speaker 1: excited about upcoming changes, and he thinks they are going
Speaker 1: to be a contender sooner rather than later. It was
Speaker 1: really interesting discussion. What was fascinating about walking around the
Speaker 1: event with him, is people stopping him to talk about
Speaker 1: the Mets. No one wants to talk about exactly. That's
Speaker 1: why they want to talk about. I mean, Barry, when
Speaker 1: you buy the Knicks, it will be the same way,
Speaker 1: Barry Redhold. Thank you so much, Opinion dot com. This
Speaker 1: is a really really important conversation. Is my head your had?
Speaker 1: Everybody else has had swirls on the pandemic. Amish Adalgia
Speaker 1: has been extremely competent in engaging the debate worldwide over
Speaker 1: a perfect solution to pandemic to virology. He is with
Speaker 1: Johns Hopkins Center for Health Security and joins US right now.
Speaker 1: Dr Delja I was thunderstruck that Auckland looks for perfection.
Speaker 1: They have thirty three new cases one point seven million people.
Speaker 1: And you know, I'm gonna dazzle you. Now, Amish two
Speaker 1: times ten to the minor six scientific notation. We got
Speaker 1: to go to folks. It's a tenC weed see amount
Speaker 1: that's ill. How do you respond to their attempt to
Speaker 1: be perfect? I don't think it's the right approach. I
Speaker 1: think that this is something that's popular in New Zealand,
Speaker 1: but it doesn't really justify what they do. Their level
Speaker 1: three and level four lockdowns are really borrowing from the
Speaker 1: Chinese playbook. And I don't think that they're the way
Speaker 1: that they're so blanket they they pick up so many
Speaker 1: activities that aren't leading to spread, that don't allow people
Speaker 1: to do things and a safer manner, for example, go
Speaker 1: outside or not have to wear a mask when they're outside,
Speaker 1: or even be able to get take out dining when
Speaker 1: they're under level for lockdown. So I don't necessarily think
Speaker 1: what they've done is correct, but they are vociferous defenders
Speaker 1: of it, as I found out when you criticize them.
Speaker 1: But it is something that I think really needs to
Speaker 1: be examined because it's not sustainable. And they have about
Speaker 1: thirty percent of their population fully vaccinated. That's that's not
Speaker 1: a lot, and that their rates are going up, but
Speaker 1: they don't think we need to do this in the
Speaker 1: in the post vaccine era. And also we've got rapid tests,
Speaker 1: we've got so much technology to allow people to do
Speaker 1: things safely that this absinence only approach, even if it's popular,
Speaker 1: shouldn't be what's done and definitely shouldn't be enforced with
Speaker 1: with police the way they do in New Zealand. I
Speaker 1: don't sense it in America, but maybe I'm uninformed. Do
Speaker 1: we have elements of New Zealand from sea to Shining Sea.
Speaker 1: We don't. We've had some aspects of it, For example,
Speaker 1: when you look at California, which had a very strict
Speaker 1: restriction on indoor dining or an outdoor dining as well,
Speaker 1: and you still saw cases really going up in California
Speaker 1: because what that was doing, that absence only approach in
Speaker 1: California was driving behavior underground where it was more risky.
Speaker 1: And I think the lesson from this pandemic is that
Speaker 1: harm reduction something that we do with HIV was sexually
Speaker 1: transmitted infections. That's the way we want to approach public
Speaker 1: health with voluntary means, trying to give people tools to
Speaker 1: make better risk calculations. No one we're never going to
Speaker 1: get cases to ze or that there's going to be
Speaker 1: a baseline number of cases hospitalizations invest but just trying
Speaker 1: to keep our hospitals from going into crisis. And I
Speaker 1: think we should have of doing that back from January.
Speaker 1: And I don't think that the US is a good
Speaker 1: example here. I think they're both false alternatives New Zealand
Speaker 1: And in the United States and there is a better
Speaker 1: way away like countries like Taiwan, followed Dr ADLTA. In
Speaker 1: the meantime, the debate over booster shots continues to heat up,
Speaker 1: and just on a Arrival Network, Dr Fauci has been
Speaker 1: speaking and he's saying that he does expect the FDA
Speaker 1: to decide to give boosters. Meanwhile, several FDA members have resigned,
Speaker 1: saying that it's unnecessary or perhaps scientifically unpacked. Where do
Speaker 1: you fit into this in terms of the need or
Speaker 1: lack there of of boosters? To meet the threshold for
Speaker 1: needing a booster would have be someone that's fully vaccinated
Speaker 1: getting a breakthrough infection that lands them in the hospital.
Speaker 1: That's just not happening. There's definitely probably going to be
Speaker 1: some need for boosters down the road, but I don't
Speaker 1: think it's going to be on September twenty or six
Speaker 1: months or eight months post to your second does. It's
Speaker 1: something we need to be proactive about, but I don't
Speaker 1: think we're ready to pull the trigger for healthy people.
Speaker 1: There may be an argument to be made for the
Speaker 1: elderly people in nursing homes, but that also needs to
Speaker 1: be driven by clinical data, not just looking at antibody
Speaker 1: levels coming down, but actually seeing do people get severe
Speaker 1: infections this this many months out from their vaccination, and
Speaker 1: does a third dose not only boost their antibodies but
Speaker 1: doesn't actually protect them against that. So we want clinical data.
Speaker 1: We want this to be driven by the usual process
Speaker 1: of the CDC, the f d A and all that
Speaker 1: data being published so that people can actually look through
Speaker 1: it and sift through it. Not something that's get that's
Speaker 1: primarily being announced by the White House. That's that's triggering
Speaker 1: people at the FDA to announce their retirement into writing
Speaker 1: medical journals opposing it. Dr Adlgia. What's the potential concern
Speaker 1: here about giving boosters? Is there any scientific evidence of
Speaker 1: harm or that it doesn't really affect things at all,
Speaker 1: or is it simply a matter of distribution of vaccine
Speaker 1: and trying to get unvaccinated vaccinated throughout the world as
Speaker 1: quickly as possible. There's probably not a major harm signal.
Speaker 1: But again, if you read what the FDA, the departing
Speaker 1: FDA members wrote, they're worried about side effects that might
Speaker 1: occur if that third dose is too close to the
Speaker 1: second dose, or or what that might do to the
Speaker 1: reacting genicity of the vaccine. But again, this is something
Speaker 1: that can be solved and answered with clinical data, just
Speaker 1: to look and see what happens to people who get
Speaker 1: a third dose. And that's what's really missing, or at
Speaker 1: least hasn't been presented publicly, and and that's why I
Speaker 1: think you've seen such a backlash against this plan from
Speaker 1: the infectious disease community. With a few few notable exceptions,
Speaker 1: but in general, most of us don't think, for healthy
Speaker 1: people that we're ready to recommend boosters in the absence
Speaker 1: of data. And it's important to remember what's happening in
Speaker 1: the United States with with the number of hospitalizations and
Speaker 1: worries about crisis and places like Idaho and Kentucky. That's
Speaker 1: not going to be solved by third doses. It's first
Speaker 1: and second doses that solved that. And I think that's
Speaker 1: where the focus needs to be. And I think that
Speaker 1: we can prepare for boosters, get ready, but make sure
Speaker 1: that we do this right so that people have confidence
Speaker 1: that the process actually was scientifically driven and not driven
Speaker 1: by any other considerations. Don't to thank you for it's
Speaker 1: on this small and I guess O wise, don't hamish
Speaker 1: it down to that of Jones Hopkin's sense of house security.
Speaker 1: They seen the Escala on the equity market. Christopher Gercanti
Speaker 1: joins us right now with m Ai Capital a droid.
Speaker 1: US usually start with a general phrase, Chris, but I
Speaker 1: know you're gonna be hanging on every word at one
Speaker 1: pm on Apple? Can you own Apple here? You've been
Speaker 1: a long term affiliate of Apple. Can you go long
Speaker 1: Apple right now? Sure? Tom, I think if you're a
Speaker 1: long term investor, you know there's there's hardly a better
Speaker 1: run company, hardly better company with market position. Having said that,
Speaker 1: we don't currently own Apple. We prefer some of the
Speaker 1: other fang stocks, mostly because it's, uh, it's a combination evaluation.
Speaker 1: Plus they've almost outdone themselves. I mean, the iPhone is
Speaker 1: so good that we're not expecting much from today's launch.
Speaker 1: I think a few incremental changes, a better camera. So
Speaker 1: you know, I'm a little afraid that at this lofty
Speaker 1: valuation of thirty times, that's gonna that's gonna disappoint. Can
Speaker 1: we get to the story over Amazon, Chris, it's not
Speaker 1: a stokey hold it is. Can you tell me why
Speaker 1: in a world where they might have to pay up
Speaker 1: a lot more for light. But this is a big
Speaker 1: employer in America. Now, sure, well, Jonathan, there are so
Speaker 1: many ways to win. I mean, clearly this is old news.
Speaker 1: But but just point to a WS a Amazon Web
Speaker 1: Services where they created, you know, a multi billion dollar
Speaker 1: company out of nothing, and that that we estimate is
Speaker 1: now worth about four hundred billion dollars. So there's that,
Speaker 1: there's prime um, there's the international growth. So sure, just
Speaker 1: like every other corporation in America, they're going to have
Speaker 1: to pay more for labor. That doesn't uh mess up
Speaker 1: our investment thesis. Maybe it cuts the margin of per
Speaker 1: cent or two, but I think long term, I'm pleased
Speaker 1: to be a holder of Amazon. Chris, So, you've been
Speaker 1: a bull, and you've been an unapologetic bull, and you're
Speaker 1: saying that all of the pessimists right now want to
Speaker 1: sound smart. However, that has not been a good way
Speaker 1: to make money. When you talk about making money, why
Speaker 1: do you like Boeing? Why do you like some of
Speaker 1: the outliers that frankly continued to be souring in many
Speaker 1: people's fears are well, as Tom always teases me, you know,
Speaker 1: I'm a contrarian. So it's very hard. Buying stocks today
Speaker 1: is like going to the produce department in the market
Speaker 1: at six o'clock at night. Everything is picked over. It's
Speaker 1: really hard to find something good. So Bowing has a
Speaker 1: lot of hair on it. But believe me, okay, it's
Speaker 1: sasquatch basically. But if you look three to five years
Speaker 1: out from now, when COVID is a grim memory, where
Speaker 1: the middle class all over the world is looking for
Speaker 1: more airline seats and there's only two companies that can
Speaker 1: satisfy them, I think Bowing, which is selling for half
Speaker 1: the price it was two years ago, is one of
Speaker 1: the few attractive things in the market today. Well, let's
Speaker 1: talk about Bowing. Is it a cyclical? You know, it
Speaker 1: didn't used to be. Tom. It's funny if you do
Speaker 1: a regression analysis, and you'll love this, your stat guy,
Speaker 1: If you do a regression analysis against Bowing in the
Speaker 1: last two years, it correlates very closely with the airlines,
Speaker 1: But for the five or six years before that it
Speaker 1: does not. And in other words, in good times when
Speaker 1: we don't have a worldwide pandemic, Bowing is not a cyclical.
Speaker 1: It's a worldwide It's a world leading manufacturing company that
Speaker 1: has terrific margins and terrific returns on equity. So it
Speaker 1: is it. I think it's a chance to buy a
Speaker 1: great company that's being labeled today as a cycle. Take
Speaker 1: me step back, Chris, when you talk about being a
Speaker 1: bull in this environment, it really does come down to
Speaker 1: relative valuations in addition to a fundamental story. But how
Speaker 1: comparable is the relative value story at a time when
Speaker 1: people think that bond deals are going to go up,
Speaker 1: at a time when frankly, there is so much economic
Speaker 1: uncertainty and such varying views on the path of inflation
Speaker 1: going forward. Well, you know, at least I think it's
Speaker 1: somewhat ironic that people seem more scared now than they
Speaker 1: were nine months ago, even though the market nine months
Speaker 1: ago was selling it twenty seven times forward earnings and
Speaker 1: now is it twenty one times. I'm not making an
Speaker 1: argument that that's cheap, but I am making an argument
Speaker 1: that it's cheaper now than it was nine months ago
Speaker 1: because of strong earnings growth. And I think that trend
Speaker 1: over the next six to twelve months will continue. There's
Speaker 1: a lot of cross currents, inflation being the number on
Speaker 1: one that I'm afraid of the more next year than
Speaker 1: this um you know, in the delta variant and the
Speaker 1: crummy August jobs report, But you know those are the
Speaker 1: things that create opportunities. So some faith that we really multiples,
Speaker 1: Chris school, As you indicate earnings have grown really quickly.
Speaker 1: Do you think it could be a threat to multiples
Speaker 1: though in a world where the Federal Reserve might be
Speaker 1: forced to pull back a little bit earlier than anticipated.
Speaker 1: In that world, yes, but I don't think we're living
Speaker 1: in that world, Jonathan. I I think we The Fed
Speaker 1: again and again and again has said, um, you know,
Speaker 1: damn the torpedo full speed ahead. They don't care about
Speaker 1: five percent inflation, at least not right now. Their sole
Speaker 1: goal is to get us out of the COVID pandemic.
Speaker 1: And look, next year is a different world. And I
Speaker 1: don't I don't doubt that we're you and I are
Speaker 1: gonna be sitting here talking about wage inflation and other things.
Speaker 1: But the backdrop right now is a FED that has
Speaker 1: the pedal to the metal. And and you know, inflations
Speaker 1: is down the list of words. Chris gotta leave you
Speaker 1: that smart as always gonna catch up with the Chris
Speaker 1: Kers Suncy, that m Ai Capital equity strategist in sitia
Speaker 1: port folio manager. This is the Bloomberg Surveillance Podcast. Thanks
Speaker 1: for listening. Join us live weekdays from seven to ten
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Speaker 1: best in economics, finance, investment, and international relations. And subscribe
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Speaker 1: and of course on the terminal. I'm Tom Keene, and
Speaker 1: this is Bloomberg