Speaker 1: This is Bloomberg Business Week. I'm Carol Masser. Every day
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Speaker 1: Global News, Top Business, and definitely top stock story today
Speaker 1: is the Walt Disney Company, because man, it is a
Speaker 1: fifteen percent in today sessions. It's amazing given that the
Speaker 1: business model has been completely upended by the pandemic. To right,
Speaker 1: Its parks are closed, movie theaters are closed, right exactly,
Speaker 1: so many parts of their business and they're like, you
Speaker 1: know what, We're going to wrap it up when it
Speaker 1: comes to streaming, and investors like it. So let's get
Speaker 1: into it. Um. We do get a bunch of headlines
Speaker 1: late yesterday and that's why we're seeing such strong stock reaction.
Speaker 1: Let's do a deep dive into the company. Chris mary
Speaker 1: is l a bureau chief for Bloomberg News. He's on
Speaker 1: the phone in Los Angeles. Also Bloomberg opinion columnist Tarala Chapelle.
Speaker 1: She covers the business of entertainment, telecommunications, and the deal's world.
Speaker 1: She's on the phone in New Jersey. Chris, I want
Speaker 1: to kick it off with you. WHOA why is I
Speaker 1: mean the stock is that it's all about streaming. Yeah,
Speaker 1: I mean you know it's like to your point, Uh,
Speaker 1: if you know you said at the beginning of the
Speaker 1: year there was going to be a global pandemic that
Speaker 1: would shut you know, theme parks and cruise lines at
Speaker 1: movie theaters and live sports, and you know, should you
Speaker 1: sell Disney? Of course you would say yes. And yet
Speaker 1: here it is continuing to hit new highs for a
Speaker 1: couple of weeks. Now, um, it's yeah, it's all about streaming.
Speaker 1: You know that they happen to launch this product Disney Plus, uh,
Speaker 1: a year ago in November, right before the pandemic, and
Speaker 1: everybody's now focused on home entertainment and what can I
Speaker 1: do with a family at home? And uh, schools out
Speaker 1: and so subscription surge all around the world. Uh. And
Speaker 1: why Wall Street loves This is because it's a recurring
Speaker 1: subscription business. Everybody is paying their monthly Disney Plus bill
Speaker 1: and so they can project those subscribers out at infinitem.
Speaker 1: So it's a you know, it's it's a lot more
Speaker 1: reassuring than trying to get a movie sold this weekend.
Speaker 1: Great visibility, right, Yeah, yeah, it really is. And I
Speaker 1: want to bring Tarry in here because she got She
Speaker 1: has a new column out today called Disney's new streaming
Speaker 1: Star is a Netflix? Is Netflix? You guys talked earlier
Speaker 1: on We talked earlier on Quick Take, and it's all
Speaker 1: about Star and what Star is doing and how Disney
Speaker 1: is positioning Star internationally. Tara, take us through this because
Speaker 1: it didn't get a lot of attention when Disney first
Speaker 1: acquired Star, but now it's kind of becomes center stage, right,
Speaker 1: especially when Bob Tapek is sitting up in front of
Speaker 1: a big screen and you see the Disney Plus and
Speaker 1: then you see Star behind at the logos. Tara, Right,
Speaker 1: that's what was so telling. You know, Hulu was moved
Speaker 1: to the side and right behind shapec or whoever was
Speaker 1: speaking last night, you saw Disney Plus and Star and
Speaker 1: that was definitely new and What I love about it is,
Speaker 1: you know, covering mergers and acquisitions, when you see deals
Speaker 1: the size of the when Disney did for Fox eight
Speaker 1: five billion dollars, what often happens is there are businesses
Speaker 1: that are bought part of those deals that the acquirer
Speaker 1: doesn't really want, some smaller units or brands that they
Speaker 1: get because they kind of have to because they're buying
Speaker 1: the company. But with Star, I think it was a
Speaker 1: little overlooked at the time when the deal closed, people said, well,
Speaker 1: it's an Indian TV brand. Yeah, there's growth there, but
Speaker 1: it's going to stay kind of a smaller piece of Disney.
Speaker 1: And instead, Disney is putting it front and center and
Speaker 1: building this brand into an international streaming powerhouse. It's going
Speaker 1: to be there global version of Netflix, the brand with
Speaker 1: all the sort of adult programming beyond the stuff that's
Speaker 1: on Disney Plus. And it just makes a whole lot
Speaker 1: of sense. It's kind of filling a hole that Disney
Speaker 1: Plus had, and I think people are gonna like it.
Speaker 1: It's gonna make it a really compelling offering. Vias of
Speaker 1: the Netflix, Sarah, we won't see it are in the
Speaker 1: US though, right, We'll see Hulu instead. Right, So they're
Speaker 1: only doing it outside the US with Star in the US.
Speaker 1: It seems like, at least for now, they're sticking with
Speaker 1: this bundle for thirteen dollars a month where you can
Speaker 1: get Disney plus Hulu if you want some more, um
Speaker 1: you know, adult programming and ESPN Class if you're sports fan.
Speaker 1: I think the the US offering is a little bit messy.
Speaker 1: They need to figure it out a little bit more.
Speaker 1: But the global offerings are really compelling. Well, and you know, Chris,
Speaker 1: come on back in on this conversation. Global, right, there's
Speaker 1: US growth and growing in the US market, but global
Speaker 1: and the opportunities there for Disney, Um, they've always thought
Speaker 1: about beyond the US. Well, if you look at the
Speaker 1: projections they made yesterday, three fifty million worldwide subscribers by
Speaker 1: four that's bigger than you know, Netflix right now is
Speaker 1: a million. But even our our consensus forecast on Bloomberg
Speaker 1: is for Netflix around three d and twelve million. So
Speaker 1: they're basically saying we're going to be big than Netflix.
Speaker 1: They have an advantage, which is they have these four
Speaker 1: uh streaming services, so you can you know, if you're
Speaker 1: a Netflix customer, you're only getting one they have different
Speaker 1: plans even with ads without but you're but you're not
Speaker 1: subscribing to both. With Disney, you can easily have three
Speaker 1: different services so than one customer three uh you know plans.
Speaker 1: So so they have that advantage. You know, they're tailoring
Speaker 1: these for different markets, as Tara said, you know, sports
Speaker 1: for Latin American customers and streaming uh in Europe, you know,
Speaker 1: the sort of f X content, and they have more
Speaker 1: adult Fox films are going to be bundled in with
Speaker 1: Disney plugs for a higher fee. So they're trying all
Speaker 1: these different strategies. So Terry, if if if your Netflix
Speaker 1: right now, what are you what are you thinking? Because
Speaker 1: you know, Netflix was the company that invented direct consumer streaming.
Speaker 1: Is it threatened by Disney's power now? Yeah? But Netflix
Speaker 1: will say that they welcome the competition. That kind of there.
Speaker 1: They always they always say that, but I think it's
Speaker 1: it's what it means is that, you know, Netflix isn't
Speaker 1: standing still like they are growing. They're constantly creating new content,
Speaker 1: so they're going to have more competition. But I think
Speaker 1: what it means is they kind of try to step
Speaker 1: that up a little bit, maybe the quality of the
Speaker 1: stuff they're putting on their service, maybe more kids stuff
Speaker 1: so that they can try to compete head on with
Speaker 1: Disney the way Disney is trying to do with Netflix.
Speaker 1: But you know, as a consumer, this is a good time.
Speaker 1: Everyone's always trying to figure out who's going to be
Speaker 1: the Netflix killer, who's going to be left standing at
Speaker 1: the end of the streaming wars. But for consumers, it's
Speaker 1: important to remember competition is a good thing. It keeps
Speaker 1: prices low, it keeps the value proposition up, so more
Speaker 1: companies that are fighting for our dollars the better. How
Speaker 1: much of this in terms of the emphasis on streaming was,
Speaker 1: you know, the brainchild of Bob Iger, longtime CEO UM
Speaker 1: now I think he's executive chairman. Uh. And also how
Speaker 1: much of it is Bob J Peck Well, uh, you know,
Speaker 1: there was this narrative earlier this year that you know,
Speaker 1: Bob Iger was still running the show. He's a powerful force,
Speaker 1: no doubt, Um certainly listens to him. But you know,
Speaker 1: there were certainly hallmarks in yesterday of of J Pick
Speaker 1: running the things. In fact, there was almost this disconnect
Speaker 1: where Bob Iger gets up to speak and he said,
Speaker 1: you know, we're going to emphasize, uh, quality over quantity,
Speaker 1: and they announced a hundred movies and TV shows. Uh,
Speaker 1: every retread you could possibly imagine Sister Act three, the
Speaker 1: Dog from Up gets his own series. I mean we
Speaker 1: need Chris the Board, Bob J. Peck, you know, sitting
Speaker 1: like at a you know, portable table in the lot
Speaker 1: parking lot of Disney, just saying yes to a long
Speaker 1: line of people pitching him ideas. Uh, it was. It
Speaker 1: was very much, uh, let's throw everything at the wall,
Speaker 1: and and really just pretty different from Disney Films strategy
Speaker 1: under Eiger when he took over. You know, they deliberately
Speaker 1: paired back all of those movies that were you know,
Speaker 1: the sports films, the you know adult ori need comedies,
Speaker 1: and they really focus deliberately on these big blockbuster Superhero
Speaker 1: and Star Wars and Pixar movies that they can get
Speaker 1: more bang for the buck out of. And so totally
Speaker 1: different strategy. Now, this stuff is expensive to do though,
Speaker 1: it's expensive to shoot, it's expensive to get the talent.
Speaker 1: Why do investors seem to be ignoring how much cash
Speaker 1: this is actually going to cost Disney. It gets back
Speaker 1: to our earlier point about it's all about the subscriber numbers.
Speaker 1: And so if you can get to three million subscribers
Speaker 1: paying you ten bucks a month, you know, it's it's
Speaker 1: just a huge surge and dependable revenue. So what Wall Street,
Speaker 1: It's not about the earnings right now, and the Disney's
Speaker 1: is losing money. Uh, you know, given the pandemic and everything,
Speaker 1: it is all about the future subscriber. I mean, this
Speaker 1: is Netflix's playbook. Netflix just burns cash, and they've been
Speaker 1: burning cash for years buying content. It's it's almost any
Speaker 1: tech company, right, h And is the Amazon story right
Speaker 1: with that? When exactly how how many you know, long
Speaker 1: term subscribers can you get? Because subscribers stick around and
Speaker 1: and and you know, it's it's predictable revenue. So so yeah,
Speaker 1: so the fact that they're spending more money losing more
Speaker 1: money Wall Street applause. So so, Chris, listen, you've been
Speaker 1: following this company for a long time. I mean, where
Speaker 1: does I don't know, things like Hulu fit into this.
Speaker 1: Where do those you know, big releases to the big screen.
Speaker 1: You know, certainly after Warner Brothers kind of shocked the
Speaker 1: industry by saying, you know, we're gonna go straight to
Speaker 1: you know, streaming or offer them in streaming and theater
Speaker 1: at the same time. Where does all of that fit
Speaker 1: into Disney's world, Because the big screen it's important to Disney.
Speaker 1: It is and and I think one of the takeaways
Speaker 1: from YESTERD is they they indicated that they were not
Speaker 1: going the Warner Brothers route, and in fact, some of
Speaker 1: the theater chain stocks are up quite a bit today
Speaker 1: as a result. Um, you know, so they're gonna save
Speaker 1: the new Indiana Jones with Harriton for the next Star
Speaker 1: Wars directed by Wonder Woman director Patty Jenkins. Those are
Speaker 1: going in theaters. Um, you know. They announced one movie,
Speaker 1: you know, a new animated film which was entirely new,
Speaker 1: uh contacts there and The Last Dragon is going to
Speaker 1: go up in theaters and on Disney Plus for a
Speaker 1: premium thirty dollar purchase on the same day. So they're
Speaker 1: testing that model. You know. They they're putting a Tom
Speaker 1: Hanks Pinocchio movie direct to Disney Plus. So you know,
Speaker 1: they're trying a lot of different things. But they're very
Speaker 1: clearly not saying everything is going to the streaming service
Speaker 1: day and day with the movie release theater release. So
Speaker 1: it's a it's a different approach, and it's more nuanced
Speaker 1: than it gives the theater some hope. Yeah, exactly, good stuff.
Speaker 1: Good stuff. Ten Star Wars series spinoffs and ten Marvel
Speaker 1: series that will debut you on Disney Plus. I know,
Speaker 1: family members, that's what we want. I have a baby brother, man,
Speaker 1: he's just gonna be like all into that. Look, as
Speaker 1: long as they continue to have the Mandalorian, I'm going
Speaker 1: to keep paying for Disney Plus. You're gonna be paying
Speaker 1: for it for a long time. With your son two
Speaker 1: years old, You'll be paying for it for a long time.
Speaker 1: Chris Paul Mary, thank you so much. L a bureau
Speaker 1: chief at Bloomberg News on the phone from l A.
Speaker 1: Check him out at Chris Paul Mary on Twitter. I mean,
Speaker 1: listen the Disney story. I'm just fascinated by the company
Speaker 1: and the strategy those acquisitions of Lucasfilm and Pixar and Marvel.
Speaker 1: I mean, we're brilliant then and even looking more brilliant now. Yep.
Speaker 1: And they just kind of, you know, the strategy, they
Speaker 1: just move it around the platforms. This is Bloomberg Business
Speaker 1: Week with Carol Messer from Bloomberg Radio. You're listening to
Speaker 1: Bloomberg business Week Carl Masser along with Tim Stenovik a
Speaker 1: Bloomberg Quicktake and Tim this story. I noticed it's been
Speaker 1: among the most read on the Bloomberg. It's about a
Speaker 1: group of guys trade ors who rode the crash in
Speaker 1: oil prices and as a result, they made hundreds of
Speaker 1: millions of dollars not too shabby. It's all about what
Speaker 1: happened in April. I remember that day where I was
Speaker 1: because this was just mind bending what happened, right because
Speaker 1: the oil prices, neil prices crashing going to negative, essentially
Speaker 1: requiring that people pay you to take oil off your hands.
Speaker 1: You paid people rather to take off your hands, right, Like,
Speaker 1: it just didn't make sense for anybody who's been following
Speaker 1: the financial markets. This story is reported for Bloomberg Business Week,
Speaker 1: and here to tell us about the guys and the
Speaker 1: ride is Bloomberg business Week. Get it to Joe Webber
Speaker 1: on the access line in Brooklyn. It's written by Liam Vaughan,
Speaker 1: senior reporter at Bloomberg News and Joe, let's kick it
Speaker 1: off with you. Uh. This is like one of those
Speaker 1: stories that I feel like again, you can make a
Speaker 1: movie out of it. Yeah, well, it's what we try
Speaker 1: to do and this was one that you know, Liam
Speaker 1: has been close to for a while. Um. And you
Speaker 1: know we reported in Business Week back over the summer
Speaker 1: actually when we found out the details of of the
Speaker 1: trade and that it was more than five million and
Speaker 1: now it turns out it's even more than that. It's
Speaker 1: it's six and sixty million dollar profit. And what we've
Speaker 1: also learned in that time is is what makes this
Speaker 1: story so special, um, And it becomes almost a character
Speaker 1: portrait of the group of of guys who were behind
Speaker 1: the trade, and um, we know very little about them,
Speaker 1: but what we do know is all in the story
Speaker 1: and it's this little group of guys in Essex, England.
Speaker 1: Paul Cummins, I mean, I feel like it's just like,
Speaker 1: as I said, you could just kind of you know,
Speaker 1: you just want to pull out his story, um, because
Speaker 1: it's his name. Which is part of the joy of
Speaker 1: the story is that the case of characters, it's so
Speaker 1: it's almost like a guy Ritchie film and they have
Speaker 1: it's a really tight knit crew. And and the character
Speaker 1: that you mentioned it goes by Cuddles or that's how
Speaker 1: he's affectionately known within the group. I feel well. And
Speaker 1: then there's another guy named Dog, right, ye Dog. And
Speaker 1: you know that was part of the charm of the
Speaker 1: story was that you know, we we uh, as we
Speaker 1: found out a little bit about their details, we tried
Speaker 1: to kind of bring them all uh to light. And
Speaker 1: the fact that, um, you know, the other element of
Speaker 1: the story that I just find totally fascinating is his
Speaker 1: Cuddles actually really does know oil. He's been in the
Speaker 1: trenches for for decades now, but some of these other people,
Speaker 1: um don't in their in their twenties. Uh. And basically
Speaker 1: it's this ring of of of characters, characters who sort
Speaker 1: of know each other and that's all they all they know,
Speaker 1: and they they've kind of grown up with each other
Speaker 1: and have learned the oil trade. And that's kind of
Speaker 1: I mean, they're almost like novices in that they're they
Speaker 1: probably don't have that much experience, and yet they at
Speaker 1: a heck of a day on April. Well, and this
Speaker 1: is one of those stories like as Tim was talking
Speaker 1: about joll like when it happened, we're all thinking, Okay,
Speaker 1: first of all, this makes no sense negative you know,
Speaker 1: we're all getting used to negative rates. But this whole
Speaker 1: idea of negative oil prices and what it what it
Speaker 1: meant and the thing is it happened and then it
Speaker 1: it went away. Um. But as as people wanted to
Speaker 1: kind of understand the trade that day and how it happened,
Speaker 1: that's where investigators on in the US and I guess
Speaker 1: elsewhere really started looking into to try and understand how
Speaker 1: did this happen, and that's what really led them to
Speaker 1: this gang of nine. Yeah, we we don't really have
Speaker 1: visibility into into where any sort of investigation or where
Speaker 1: that stuff could go. But what we do know is
Speaker 1: that the trade is um. You know, some of these
Speaker 1: details were ones that we are able to report on
Speaker 1: earlier but then even learn a little bit more of.
Speaker 1: For this story, UM, it comes down to Tad's T A. S.
Speaker 1: And the it's also known as quote unquote banging the
Speaker 1: clothes and settlement exactly. And there is um a little
Speaker 1: bit of um understanding within the community that this is not,
Speaker 1: you know, anything nefarious or illegal. It's been practiced for years,
Speaker 1: especially back in the commodities glory days, and that's kind
Speaker 1: of where UM cuddles as he goes. But UH perfected
Speaker 1: this and so we think that they basically were able
Speaker 1: to do that during the close really take advantages of
Speaker 1: the price going negative. There is some some speculation or
Speaker 1: interest in it whether or not they actually pushed it
Speaker 1: negative just through their own trading activity, but that's not
Speaker 1: for us to say. But yeah, you know, when you
Speaker 1: look back on the course of this year, we've seen
Speaker 1: so many incredible things, so many weird circumstances that you know,
Speaker 1: even even that that day and negative oil remains one
Speaker 1: of the weird are just things, and and yet you know, uh,
Speaker 1: this this crew is responsible for for perhaps maybe the
Speaker 1: trade of the year. I think, yeah, And I guess
Speaker 1: my question would be, you know, even though it was
Speaker 1: such an anomaly to see oil do this and crash
Speaker 1: like this in a day, is this trade still possible
Speaker 1: in the future, or by shining a light on it
Speaker 1: like this as a sort of decrease the opportunity that
Speaker 1: people can can do this, you know, it's it's hard
Speaker 1: to know. Um. I think in many ways this was
Speaker 1: a perfect alignment where we had a coronavirus and supply
Speaker 1: and demand things, so we had oil already come down
Speaker 1: and then you know, all of this coincided basically with
Speaker 1: this one day that happens every month with oil where
Speaker 1: the contracts roll over. So you know, we we even
Speaker 1: thought maybe the following month there could be a repeat
Speaker 1: because we were still on lockdown right then and demand
Speaker 1: had evaporated. So who knows. I do think, you know,
Speaker 1: one thing we know about about finances that weird things happened.
Speaker 1: There are glitches. Um, no one thought the prices could
Speaker 1: ever go negative until they were starting to be warnings
Speaker 1: like days before that it was it was possible. So
Speaker 1: I think it took a special alignment. And when you
Speaker 1: kind of actually, um, you know, read the story closely,
Speaker 1: it it seems like they knew what they were doing,
Speaker 1: and everything happened to align just right well and to
Speaker 1: be fair and to be fully transparent. No authorities have
Speaker 1: accused Vega Capital or any of the traders referenced in
Speaker 1: this story on doing anything illegal. And I love the
Speaker 1: law firm. I guess that represents eight of the nine
Speaker 1: traders in this group toll each the quote is, each
Speaker 1: of our clients regularly puts his own money at risk
Speaker 1: to try to make a profit. Sometimes it works, sometimes
Speaker 1: it doesn't. And and and Liam even includes in his
Speaker 1: story that you know, if they've made maybe seven million
Speaker 1: dollars that day, nobody would have maybe really you know,
Speaker 1: like yeah, okay, whatever, But it was just they made
Speaker 1: almost seven hundred millions, and so authorities, yeah they had
Speaker 1: to take a law and maybe they don't. Yeah, yeah, exactly. Yeah,
Speaker 1: I think you know that. That last note of the
Speaker 1: story is another trader who says, look, if it was
Speaker 1: BP or Goldman Sacks, nobody would be saying anything but
Speaker 1: the fact that these are, you know, working class lads
Speaker 1: in the neighborhood like Essex, which is is basically the
Speaker 1: equivalent of New Jersey for thank hey, so there you go.
Speaker 1: But yeah, it was just a correct trade. Maybe it
Speaker 1: was just a great trade. So that that's what got
Speaker 1: people talking about it, the fact that these aren't it's
Speaker 1: not a firm that everybody knows. It's just some guys
Speaker 1: who had a great day kind of like jefter then
Speaker 1: Joel Webber, have a good weekend. You told it, well,
Speaker 1: everybody should check it out. Joe Webber, editor of Bloomberg
Speaker 1: Business Week, on the remote Access from Brooklyn, given some shade. Yeah,
Speaker 1: you're not going to forget about that comment come monday.
Speaker 1: Are you liked him really up to that point? All right?
Speaker 1: For those of you listening to New York DC in
Speaker 1: San Francisco watching a YouTube Bloomberg Business Week. We're going
Speaker 1: to continue if listening on Bloomberg one or six one
Speaker 1: in Boston based day Business is coming up next. Check
Speaker 1: out the magazine Incredible Stories. You can find it on newsstands,
Speaker 1: on the Bloomberg and online at Bloomberg dot com. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer on Bloomberg Radio.
Speaker 1: All right, so yeah, tough story once again of our day,
Speaker 1: of our week, of our year, no doubt about it.
Speaker 1: Is everything and anything to do with the coronavirus and vaccine.
Speaker 1: Charlie Pellett just talking about the story that we've seen
Speaker 1: came out of the Washington Post that the White House
Speaker 1: Chief of Staff Mark Meadows telling Stephen han In, the
Speaker 1: Commissioner of the FDA, to submit his recognition but Hans
Speaker 1: saying no, that's not likely, right or not happy? That's
Speaker 1: what That's what han is responding. And and look, I
Speaker 1: think it raised if this story indeed turns out to
Speaker 1: be true. I mean it's a Washington Post story. Um,
Speaker 1: it doesn't help confidence in the vaccine at a time
Speaker 1: when Americans are concerned that it's been rushed through exactly.
Speaker 1: And let's get into that with our next guest, Dr
Speaker 1: Ian lous Bader with us as he is always every Friday,
Speaker 1: his clinical associate Professor of Medicine at n y U
Speaker 1: Landgown Medical Center, on the phone in New York, on
Speaker 1: a day when global cases exceed sixty nine point seven
Speaker 1: million deaths, surpassing one point fifty nine million UM. Dr Lesbad,
Speaker 1: are nice to have you back with Tim and myself. Um,
Speaker 1: how are you okay? Doing doing well? Thank you, Carol
Speaker 1: and Tim. Happy Friday. Yeah, you sound a little tired. Well,
Speaker 1: it's been a long week. It's been a busy week.
Speaker 1: And uh, but I think we have good news coming.
Speaker 1: I think where we within the next few days, I
Speaker 1: think we are going to get FDA approval. The Vaccine
Speaker 1: Advisory Committee uh seventeen to four voted uh, you know,
Speaker 1: to to approve this authorization, and I think, uh, literally
Speaker 1: within the next few days we'll get the full f
Speaker 1: d A committee to approve it. I think by the
Speaker 1: hanging I want to I want to get to that,
Speaker 1: but I do want to get to that headline that
Speaker 1: it looks like the Washington Post was was or they
Speaker 1: were reporting that the White House was threatening the FDA
Speaker 1: chief um to basically prove it or else. Yeah, So yeah,
Speaker 1: what does that do? And Tim brought up a really
Speaker 1: good point, what does that do to confidence in the process,
Speaker 1: especially for the American public when there are still many
Speaker 1: out there it's safe to say that are a little
Speaker 1: nervous about taking the vaccine there are and even some
Speaker 1: physicians I know, or or a little hesitant. You know.
Speaker 1: I don't think politically or scientifically that was good. I mean,
Speaker 1: you have to let the the FDA evaluate it, which
Speaker 1: they did. The vaccine data is very good in terms
Speaker 1: of efficacy and hopefully lives to be saved, and and
Speaker 1: side effects are are low, not zero. So to me,
Speaker 1: it's certainly unnecessary to um, you know, to threaten or
Speaker 1: cajole the f d A and you know, we really
Speaker 1: should sort of stay out of that scientific realm. So
Speaker 1: I think that was an error in judgment and I
Speaker 1: think unnecessary because the FDA is going to do no
Speaker 1: matter what, the right thing. I don't think you're really
Speaker 1: subject to a political pressure anyway. Because these are committees
Speaker 1: and they're composed of infectious disease specialists and heads of
Speaker 1: departments and people who know what they're doing. Well, what
Speaker 1: would dr what would you say to someone who is
Speaker 1: seeing the news from the UK this week and understanding
Speaker 1: that people in the UK are already getting shots of
Speaker 1: Visor bion Tech Vaccine American company Visor at least, and
Speaker 1: not getting shots here in the US. I mean, what,
Speaker 1: what like can you shed on the FDA approval process
Speaker 1: as to why it is taking a few more days
Speaker 1: to get it approved here? Well, Uh, it is really
Speaker 1: just the difference of a few days. And I think
Speaker 1: this is not like the space race where you have
Speaker 1: to be the first one on the moon. Uh. You know,
Speaker 1: I think we've had an amazing under a year to
Speaker 1: get a vaccine is really unheard of. I think Worpspeed
Speaker 1: did did an amazing job, you know. And I think
Speaker 1: the FDA, or at least the way we work here
Speaker 1: is that it's goes through several committees. And it was
Speaker 1: eight hours plus of discussion on the back seen Um
Speaker 1: Advisory Committee. They had lots of different opinions. You can
Speaker 1: listen to it if you want on YouTube. I think
Speaker 1: it's a long, a long series and they really waited
Speaker 1: out the pros and concepts just how we do it here.
Speaker 1: And I think people should feel confident about that because
Speaker 1: really experts, leading experts reviewed the data, they went over it.
Speaker 1: This was not a rush judgment in anyway. I'm not
Speaker 1: saying the UK was a rush judgment. Maybe their committees
Speaker 1: work faster, or maybe they started a few days earlier.
Speaker 1: But I think we're going to start giving out the
Speaker 1: first vaccines. My bet it's later next week. Wow, And
Speaker 1: that's when are you anticipate coming to n y U
Speaker 1: landgoing that you guys start to get it? I do.
Speaker 1: I think the FDA sometime in the next two three days,
Speaker 1: four days will formally approve it. I think based on
Speaker 1: all the data, and I think it will be ready
Speaker 1: to shift by midweek. Uh if all goes well, And
Speaker 1: I think the first vaccines probably will be later next
Speaker 1: week or early the week after. Is my my guests,
Speaker 1: I have no insight information and but that's my guess
Speaker 1: is to the timeline. Do you think the rollout from
Speaker 1: the recommendations from the CDC about making sure frontline workers,
Speaker 1: healthcare workers and those who are most at risk, this
Speaker 1: is the right way to distribute the vaccine? I do
Speaker 1: you know? Unfortunately, we literally see multiple COVID patients every day. Fortunately,
Speaker 1: the volume in the hospital at leash in our area
Speaker 1: is taking up, but not massively. Um. And I think
Speaker 1: the frontline healthcare workers are the most at risk. Elderly
Speaker 1: at the most at risk and uh, and then the
Speaker 1: rest of the population. And I think once some people
Speaker 1: see that we chuck it and that we're doing fine,
Speaker 1: there'll be more encouraged to take it as well. That's
Speaker 1: a really good point. Yeah, when when they see the
Speaker 1: doctors taking it totally right. And what I do wonder
Speaker 1: too is Santa Fie and Glaxo Smith Klein Um they
Speaker 1: delayed some advanced trials of their experimental COVID nineteen shot.
Speaker 1: I guess it didn't produce the strong enough response in
Speaker 1: some older people, so that they're drugs are being pushed
Speaker 1: out maybe in terms of availability to the end of
Speaker 1: next year. I mean, ian, this is what we're going
Speaker 1: to see. But that does complicate potentially getting vaccines to
Speaker 1: the entire world. Correct. We need all of these companies
Speaker 1: to have success we do. Manufacturing vaccines is not easy. Uh,
Speaker 1: there are a lot of limiting steps and I think
Speaker 1: we need multiple vaccines. Again, the data that I've seen
Speaker 1: parliamentarily at least with Feisser and Maderna Astra Zeneca. Is that,
Speaker 1: you know, again playing with a dose a little bit.
Speaker 1: You know that we're getting into the um efficacy, which
Speaker 1: is great. You know again, flu shots not even that
Speaker 1: strong in their mandatory in many medical institutions. You know,
Speaker 1: they may be effective. So, uh, we do need a
Speaker 1: lot of companies. And then when you start getting out
Speaker 1: into Africa or other countries where they don't have infrastructure,
Speaker 1: you really need vaccines that that need to be transported
Speaker 1: without such critical conditions of you know, minus subzero temperatures.
Speaker 1: So in a way, it's good that that perhaps more
Speaker 1: Western countries who have the technology are getting at first.
Speaker 1: It's great that Fiser is coming out. I want to
Speaker 1: get to this news that we learned earlier today from
Speaker 1: Governor Cuomo saying that indoor dining here in New York
Speaker 1: City is set to close on Monday. Is this, in
Speaker 1: your opinion, the right move? Well, uh, that's a good question.
Speaker 1: You know, I think everyone is trying to make their
Speaker 1: best judgments all the way around. We do expect a
Speaker 1: bit of a bump a surge in cases after Thanksgiving
Speaker 1: and probably um, you know, around the holidays in December
Speaker 1: as well. UM, certainly we know outdoor dining is fine.
Speaker 1: I think it's a tough call to really restrict indoor dining.
Speaker 1: I think what happened is that it was hard to
Speaker 1: sort of that is a reasonable number. But I think
Speaker 1: there's been a number of infections people have had from
Speaker 1: dining out. So I can understand it. The poor restaurants
Speaker 1: have been understrain. The whole industries or understrained. But I
Speaker 1: think I have to agree, at least temporarily for for
Speaker 1: a short window to perhaps let case volume drop a
Speaker 1: bit um. I think it should be reevaluated, probably on
Speaker 1: a weekly basis, because if if positivity rates come down,
Speaker 1: they should be reopened. I can tell you it's a
Speaker 1: tough time. By next summer, we are not going to
Speaker 1: be wearing masks. Most Americans will have a vaccine and
Speaker 1: we will look back on this, but it is going
Speaker 1: to be a rough few weeks. I wish we could
Speaker 1: take a time machine and get there, yeah and move ahead. Yeah.
Speaker 1: There's a headline out from ABC that Dr Anthony Fauci
Speaker 1: says he will get vaccinated publicly. Um, so Charlie Pellett
Speaker 1: is sharing that with me. So yeah. I mean, listen,
Speaker 1: I think he understands. So many people understand and we
Speaker 1: were talking, you know, Ian that you know, by you
Speaker 1: and other members of the medical community getting the vaccine,
Speaker 1: I think that is going to really provide incredible reassurances
Speaker 1: to the mass public. I'm hoping by next Friday, when
Speaker 1: we do another medical segment, that I will have had
Speaker 1: it by then, so I will let you know if
Speaker 1: I did, and how I feel well, and look forward
Speaker 1: to go ahead. Yeah, I mean, one thing I want
Speaker 1: to know is what it feels like to get a
Speaker 1: shot of something that's stored at negative seventy degrees into
Speaker 1: your arm, right, I mean, that's got it. You can
Speaker 1: feel that, right for sure. It's a deep I am injection. Uh,
Speaker 1: it's got these lipid particles that protect the messenger R
Speaker 1: and A. Yeah, it's a it's a unique vaccine, it's
Speaker 1: a new vaccine. I'll let you know how it feels
Speaker 1: if I If I get it before Friday, well, we
Speaker 1: look forward to that. Hey, Ian, I do want to
Speaker 1: ask you to, um, what are you seeing when it
Speaker 1: comes to COVID cases in New York City. We're definitely
Speaker 1: seeing a slight increase the hospitals are also seeing uh
Speaker 1: an increase nowhere near March. I suspect part of what
Speaker 1: we're seeing is the positivity. In other words, we're estimating
Speaker 1: at twenty or over at least of the New York
Speaker 1: City population has antibodies, so I think that may be
Speaker 1: moderating it a bit. And when the vaccine starts rolling out,
Speaker 1: there is some protection after the first shot. We don't
Speaker 1: really know how much, and we certainly know many vaccines,
Speaker 1: like the shingles vaccine, the moni vaccine, you really need
Speaker 1: two shots for optimal antibodies. But I think there's some
Speaker 1: data that there will be protection after one shot. So
Speaker 1: I really think in the next few weeks we will
Speaker 1: at least have some good news coming along. But cases
Speaker 1: are up a little bit, and I think that probably
Speaker 1: factored into Governor Cuomo's decision about restaurants. But we've got
Speaker 1: to hang in there a few more weeks, and I
Speaker 1: think we'll begin to see a little more daylight. Yeah,
Speaker 1: figures crossed here. The other thing, though, that is still tricky,
Speaker 1: right that you can get the vaccine and so you
Speaker 1: are essentially protected, but you still don't know you can
Speaker 1: You can still though potentially spread the virus. Is that correct?
Speaker 1: Help me understand that? Well, yeah, you're a good, very
Speaker 1: good point. You're you're you're on the cutting edge with
Speaker 1: with nuances. So there's some rational abt people who've had
Speaker 1: it wearing a mask. In other words, you've had antibodies,
Speaker 1: you had COVID, you survived, should you wear a mask?
Speaker 1: And you know, we feel that it does make sense
Speaker 1: for a while, and that's probably true to the vaccine.
Speaker 1: There may be some carriage of the virus in nasal passages.
Speaker 1: I think that's a relatively low risk um and I
Speaker 1: don't I think it's not going to be meaningful. I
Speaker 1: think most physicians planned to wear masks even after they
Speaker 1: get the vaccine as they're seeing patients really for a
Speaker 1: few months until we really see a drop in cases.
Speaker 1: And I think part of that is cosmetic. I think
Speaker 1: it looks good and probably there's some protection. But once
Speaker 1: you have antibodies, generally they will go everywhere, and alluding
Speaker 1: to the nose where there's the virus, there's some thought
Speaker 1: that there will be fewer antibodies in the nose and
Speaker 1: you could harbor it or potentially infect other people. I
Speaker 1: think it's a theoretical risk, but a relatively low risk.
Speaker 1: A doctor. We don't have much time left. But what
Speaker 1: message do you have for people who may be putting
Speaker 1: off going to the doctor because they're worried about being
Speaker 1: exposed to the virus of our medical office is doing
Speaker 1: a safe are protecting people? At great point, Kim, thank you,
Speaker 1: A great point. People need to come in for their screening, testing, colonoscopy, mammograms, vaccines,
Speaker 1: flu shots. The offices are safe, there's social distancing. Everyone
Speaker 1: wears masks. Many offices have air purifiers. I went to
Speaker 1: my dentist and they have ultra violet air purifiers. So
Speaker 1: we need to be less afraid. Get out there and
Speaker 1: get your baseline healthcare done and uh and avoid crowds inside.
Speaker 1: You may need to take a little break from restaurants,
Speaker 1: but I think the doctor's offices are relatively safe and
Speaker 1: it's important to get your you're screening healthcare than I got.
Speaker 1: I gotta say, I got a root canal. I've been
Speaker 1: in and out of doctor's offices done. I gotta go
Speaker 1: to the down screening. They have been incredible. So yes,
Speaker 1: you do need to go to then. I mean not
Speaker 1: not for anything, but you just got to take care
Speaker 1: of your deep What are you telling me? All right?
Speaker 1: Dr Ian les Bader, stay safe, be well, Clink Associate
Speaker 1: Professor of Medicine, and y you land goom bro my
Speaker 1: turn on. Yeah, but you let me drive? No no, no,
Speaker 1: he's home. Please, I'll do the right vel. Lets me.
Speaker 1: I want to drive all Just drive baby, it's the
Speaker 1: question trying. This is the drive to the Globe community. Thanks,
Speaker 1: we'll dry us to Dawn on Bloomberg Radio. All right, folks,
Speaker 1: we've just got about eleven minutes left in today's trading session.
Speaker 1: It is time for of the drive to the clothes.
Speaker 1: Getting ready to wrap up this trading week. We're off
Speaker 1: our lows big time. We need to take a look
Speaker 1: at the trading day. Tim It's been kind of a
Speaker 1: funny day, like we kind of sold off a little bit,
Speaker 1: but not dramatically. But we've definitely bounced back here. But
Speaker 1: we're kind of overall a little changed. Yeah, and I
Speaker 1: think investors taking a step back and thinking about stimulus
Speaker 1: or lack thereof, and when is that going to happen?
Speaker 1: If ever, like a little bit of a breather and
Speaker 1: we'll see what happens. Except for those Disney investors, except
Speaker 1: for those Disney investors, or if you happen to hit
Speaker 1: one of the I P O s this week. So
Speaker 1: let's get right. So let's get into it with Ryan Dietrich.
Speaker 1: He's chief markets strategist over at LPL Financial. They've got
Speaker 1: eight hundred ten billion dollars in assets under management. He
Speaker 1: joins us once again on the phone from Charlotte, North Carolina. Here, Ryan,
Speaker 1: Nice to have you back with us here on Bloomberg. Um, So,
Speaker 1: Tim and I are watching the markets. It's kind of
Speaker 1: a little bit of a mellow day, but it's been
Speaker 1: an interesting week. But I think we are on track
Speaker 1: for some losses for the week overall. When it comes
Speaker 1: to the broader market in the SNP five hundred, how
Speaker 1: do you see the market environment right now? Are there
Speaker 1: any technicals kind of you know, jumping out at you
Speaker 1: at this point? Yeah, Carol, thanks for having me back.
Speaker 1: What's You're right? And I guess markets they don't go
Speaker 1: up forever, right, We're having a little poll back now.
Speaker 1: It looks not forgot we had over a ten percent
Speaker 1: rally and equities just in November, and if you look
Speaker 1: into the market technical seasonality, the first half of December
Speaker 1: historically is actually kind of flat for stocks. Most people think,
Speaker 1: you know, Santa Claus comes to town. December is always strong.
Speaker 1: The majority of the strength in the month of December
Speaker 1: tends to take place the second half of the month.
Speaker 1: And that's, you know, kind of where obviously we're heading here,
Speaker 1: uh fairly soon. But technicals are strong. I mean, coming
Speaker 1: off the guys for a while saying there's a lot
Speaker 1: of participations, technicals are strong. The one thing that gets me,
Speaker 1: I consider a kind of market sentiments part of market technicals.
Speaker 1: Cinema is awfully frosty. I know you guys have talked
Speaker 1: about all the big I p o s, the excitement
Speaker 1: that comes with those. Put the call ratios, and here's
Speaker 1: the lowest level they've been in decades. If you look
Speaker 1: like the five days CBO, we put the call ratio,
Speaker 1: UM investor Cinema polls. We can go on and on
Speaker 1: margat to keep going up when Cinnamon is optimistic, but
Speaker 1: that does that a much higher bar, but maybe a
Speaker 1: little bit of disappointment UM and markets finally can pull
Speaker 1: backcause people are a little too optimistic. We think that
Speaker 1: makes sense. We head into early sometime early next year,
Speaker 1: what is the political risk here? I mean, what are
Speaker 1: you watching for in terms of from Washington? It it
Speaker 1: does seem like that there will be some sort of
Speaker 1: bill pass, but it's going to be smaller than I
Speaker 1: think the Democrats want. I mean that's pretty much guaranteed.
Speaker 1: But what does it mean for what you're watching right? Well,
Speaker 1: first OFFTI not nice to talk with you, but but
Speaker 1: you're right, I mean, that's that's pretty priced in at
Speaker 1: this point, right, some type of fis stimulus bill is
Speaker 1: extremely priced in. I mean, we think it's going to happen, right,
Speaker 1: I mean, honestly, guys, we were talking about on August six,
Speaker 1: the summer resets, right, that's what we thought we were
Speaker 1: gonna have this stimulus bill. Now Here we are in
Speaker 1: the middle of December, still talking about it. So it's
Speaker 1: it's going to happen. I mean, I at the same
Speaker 1: time and his politics are waiting on the runoff in Georgia.
Speaker 1: The makeup of Congress. Um. You know, at the end
Speaker 1: of the day, the truth doesn't matter is the Fed
Speaker 1: is still a major backs of fiscal stimulus is coming.
Speaker 1: The economy obviously, the vaccine news is great, right, economy
Speaker 1: is opening up, so all these things are playing in there. UM,
Speaker 1: and just the fact that earnings are likely going to
Speaker 1: increase more than the US and emerging markets next year. UM.
Speaker 1: You know, fiscal stimulus matters in your term, but bigger picture,
Speaker 1: there's just a lot of stee wins that do say, hey,
Speaker 1: things are still looking pretty good next year. Hey, Ron,
Speaker 1: I want to go back to Tave Wilson a chart
Speaker 1: of the day, because he talked about UM earnings estimates
Speaker 1: for the next couple of years making us do more
Speaker 1: costly in historical terms than just one year's worth of
Speaker 1: projections or even past results. And he said, SMP five
Speaker 1: hundred closing yesterday at twenty six times earnings. Uh, and
Speaker 1: it goes it's close to the September second ratio of
Speaker 1: twenty seven point two that was the highest since we
Speaker 1: saw some data being compiled by US. UH here at Bloomberg,
Speaker 1: which goes back in when you look at the valuation
Speaker 1: of the market, are you concerned, Uh, when you look
Speaker 1: at next year's earning estimates, We're not super concerned. Is
Speaker 1: is it a one something that we think, oh, this
Speaker 1: is like n markets extremely overvalued? I think so here, Carol,
Speaker 1: but I'll tell you what look at emerging markets. I
Speaker 1: mentioned them a second ago. They're extremely cheap ralt to
Speaker 1: the US, and you know, a lot the emerging markets
Speaker 1: are not above where they were in two thousand eighteen.
Speaker 1: Emergy markets aren't even above where they were in two
Speaker 1: thousand seven. You're gonna talk about a long base and
Speaker 1: a long time to kind of consolidate that we like
Speaker 1: the US still don't get me wrong, But in the
Speaker 1: models that we run for our more than seventeen thousand advisors,
Speaker 1: emerging markets are an area that we really think next
Speaker 1: year from a globally diversifying portfolio point of view, that
Speaker 1: could be an area that you really start to see
Speaker 1: some strength and out performance, honestly led by China. Nobody
Speaker 1: trust Chinese data. I get that, but I'll tell you
Speaker 1: there's a lot of positives South three of Taiwan, China.
Speaker 1: There are some really good things happening in next places
Speaker 1: we're looking for investments next year are chief to be honest,
Speaker 1: what does the recovery here look like? Does it? Does it?
Speaker 1: It doesn't look like this v shape. We're we're not
Speaker 1: going to have that. We know that, Um, what do
Speaker 1: you look at? Yeah? I mean everyone wants to the shape. Right,
Speaker 1: we've been saying a swoosh shaped recovery where it's easy
Speaker 1: off the initial surge. We saw that the last couple
Speaker 1: of months. Now it's getting tough. We're looking at initial
Speaker 1: planes just yesterday. Um, you know, there's there's gonna be
Speaker 1: some sticky points here. But but the truth of the
Speaker 1: matter is, we just released our one outlook. We called
Speaker 1: it powering Through Here at LKI Research, we think the
Speaker 1: US can grow about four percent next year globally probably
Speaker 1: five percent or again. Earnings in the SMP can game
Speaker 1: maybe about twenty percent, which you get it to a
Speaker 1: one sixty five multiple. And we've got a fair value
Speaker 1: target on the SMP of thirty. And I know that's
Speaker 1: a little lower than what a lot of people have
Speaker 1: been laying out there, But honestly, I've become all with
Speaker 1: you guys where we've been bullish pretty much this whole time,
Speaker 1: and and we think maybe now that everyone's starting to
Speaker 1: get optimistic, here that inner contrarian and it says, well,
Speaker 1: maybe let's pull it back a little bit. Seing globally,
Speaker 1: my goodness, grations. The emerging markets are an area that,
Speaker 1: like I said earlier, is a lot of opportunity for investors.
Speaker 1: All right, we're gonna leave it on that note. Ryan,
Speaker 1: thank you so much. Have a good weekend. Ryan Detrich,
Speaker 1: chief market Strategies at p L Financial on the phone
Speaker 1: from Charlotte, North Carolina, so kind of laying out his
Speaker 1: metrics and what he's watching. But I think it is
Speaker 1: a week and I think you said it well that
Speaker 1: it just feels like a day where we're going to
Speaker 1: just take a break a little bit, and maybe the
Speaker 1: week because it does look like we're gonna end lower
Speaker 1: for the week. Overall, I think investors are just kind
Speaker 1: of waiting to see if we pull something out of
Speaker 1: DC potentially that gives us some optimism that kind of
Speaker 1: helps shore up the economy. Is Yeah, and I think,
Speaker 1: like Ryan was saying that it's kind of priced in
Speaker 1: right now. I think the big surprise would be if
Speaker 1: we continue not to get something as the end of
Speaker 1: the year gets closer and closer. Yeah, exactly. I think
Speaker 1: that would certainly create some disappointment. I'm just going over
Speaker 1: to Airbnb and door dash because I wanted to see
Speaker 1: how these docks are trading. So Airbnb, which was up
Speaker 1: finishing up about a hundred and thirteen percent yesterday, it's
Speaker 1: down about two and a half percent, So not a
Speaker 1: big deal. Uh. Door Dash, which was up almost eighty
Speaker 1: six percent and it's first day of trading on Wednesday,
Speaker 1: lost about two percent yesterday and it's down about six
Speaker 1: percent today, which is to be expected considering the But
Speaker 1: it'll be fun too and interesting to watch what the
Speaker 1: trend line will be. Yeah, the hard work is ahead
Speaker 1: for these companies. They have to live up to the expectations.
Speaker 1: And these expectations got lofty this week. Yeah, and listen,
Speaker 1: both of them are pandemic plays, and I think some
Speaker 1: think that maybe we'll see who has the longer term
Speaker 1: play post pandemic. Ultimately, I don't think it's gonna be Yeah,
Speaker 1: I don't know. People could say I think door Dash
Speaker 1: because they're so in terms of market share and cemented
Speaker 1: in food delivery, but who knows. Yeah, I mean maybe
Speaker 1: people are gonna be traveling in living in different places.
Speaker 1: Airbnb could benefit exactly, exactly. Thanks so much for listening
Speaker 1: to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
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