WEBVTT - Surveillance: U.S. Vaccination Rate With Brady 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.240 --> 0:00:13.200 with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you 0:00:13.280 --> 0:00:18.600 insight from the best and economics, finance, investment, and international relations. 0:00:18.960 --> 0:00:23.840 Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot com, 0:00:23.920 --> 0:00:29.320 and of course on the Bloomberg Terminal. Coming to us, 0:00:30.320 --> 0:00:33.640 Mr Brady of Texas, Kevin Brady, of course a Republican 0:00:33.720 --> 0:00:36.400 from Texas and farmer that far more than that, I 0:00:36.400 --> 0:00:39.200 should say, one of the clearest thinkers on the Republican 0:00:39.320 --> 0:00:43.000 side on what is correct away from the federalism of 0:00:43.080 --> 0:00:46.200 this nation. Kevin Brady, I want to take you down 0:00:46.200 --> 0:00:51.519 to your woodlands, down to Houston Methodist Hospital and Kelty Baker, 0:00:51.640 --> 0:00:55.760 the head of medicine at that wonderful institution. I want 0:00:55.800 --> 0:01:01.160 you to explain how you dovetail Dr Baker's aients with 0:01:01.400 --> 0:01:04.520 the tony or not of anti science, but the tone 0:01:04.520 --> 0:01:09.800 of doubt that we see nationwide among the unvaccinated. You know, 0:01:09.880 --> 0:01:12.880 I know this is this is frustrating. I am vaccinated, 0:01:12.959 --> 0:01:16.479 have been urging my constituents and neighbors to do the same. 0:01:16.600 --> 0:01:20.480 It is uh, it is a difficult argument to win. Frankly, 0:01:20.520 --> 0:01:22.240 with those thrown vaccine. I think at the end of 0:01:22.240 --> 0:01:27.280 the day, it comes down to genuinely for most you know, 0:01:27.360 --> 0:01:30.480 they don't know that this is safe yet. I think 0:01:30.520 --> 0:01:32.759 many of them are telling me, you know, get out 0:01:32.800 --> 0:01:36.800 of the emergency authorization, make that a permanent safety decision. 0:01:37.120 --> 0:01:40.160 I think that will help some, if not all. Convis 0:01:40.160 --> 0:01:43.200 of Brady, you were at great support for Donald Trump. 0:01:43.360 --> 0:01:47.440 He got vaccinated quietly, without fanfare. What do you need 0:01:47.560 --> 0:01:51.040 from your guy right now to change the trend of 0:01:51.080 --> 0:01:55.160 the unvaccinated. Yeah, I think the key thing here obviously 0:01:55.480 --> 0:01:58.800 reward people for being vaccinated. We're seeing in places like 0:01:58.880 --> 0:02:02.880 Houston where actually asking the vaccinated to mask up to 0:02:02.960 --> 0:02:08.720 protect the unmasked unvaccinated that I think that's probably wrong incentive. Secondly, 0:02:08.880 --> 0:02:12.200 I think we need a permanent authorization for those vaccines 0:02:12.240 --> 0:02:16.800 and a lot more consumer education. Uh, certainly in our area, 0:02:17.520 --> 0:02:19.920 I think that would be key. So we're seeing, you know, 0:02:20.000 --> 0:02:23.440 more of this delta in some of the land the variant. 0:02:23.639 --> 0:02:27.040 We're also unforcedly seeing that coming across the southern border, 0:02:27.360 --> 0:02:29.799 which is troubling people in a big way as well. 0:02:29.880 --> 0:02:33.080 So I'm hopeful we can keep making progress but but 0:02:33.080 --> 0:02:35.720 I will tell you too, I think I think President 0:02:35.720 --> 0:02:40.160 Biden vice President Harris did the country disservice during the campaign, 0:02:40.600 --> 0:02:44.919 essencially planning the seeds of doubt on the vaccines developed 0:02:45.000 --> 0:02:50.280 under President Trump. And I think that that Okay, please, 0:02:50.520 --> 0:02:52.720 I'm gonna give you that idea that they planted the 0:02:52.720 --> 0:02:54.800 seeds of doubt and it was part of the campaign 0:02:54.800 --> 0:02:57.920 as well. But you didn't answer my question, what does 0:02:57.960 --> 0:03:01.520 this nation need from the former president right now to 0:03:01.639 --> 0:03:05.760 explain to the jackson Ian unvaccinated that they need to 0:03:05.800 --> 0:03:09.600 be vaccinated. Well, I think the president President Trump has 0:03:09.639 --> 0:03:12.880 been clear about this that he has talked about the 0:03:12.960 --> 0:03:16.959 need to be vaccines, talked about the remarkable success in 0:03:17.040 --> 0:03:20.760 bringing these vaccines to market in record times. So I 0:03:20.800 --> 0:03:23.360 will tell you I think it is this president and 0:03:23.520 --> 0:03:26.079 vice president who bear the burden right now. And I'll 0:03:26.080 --> 0:03:29.000 tell I'm willing to help, an eager to help. I've 0:03:29.000 --> 0:03:31.560 been preaching this back home in a in a big way, 0:03:31.840 --> 0:03:36.080 especially as we see these new variants coming forward. Representative, 0:03:36.440 --> 0:03:39.120 there is a huge delta, and I'd forgive me for 0:03:39.120 --> 0:03:41.520 the pun between Republicans and Democrats when it comes to 0:03:41.520 --> 0:03:44.640 the vaccination rates and actually in more heavily democratic areas, 0:03:44.960 --> 0:03:48.040 the vaccination rates tend to be much higher and people 0:03:48.080 --> 0:03:51.960 tend to be more open to getting vaccinated. How is 0:03:52.000 --> 0:03:54.600 it that you see President Biden playing a big role 0:03:54.680 --> 0:03:57.760 in shoring up confidence and vaccines. If it's largely the 0:03:57.800 --> 0:04:01.680 Republican regions that still show down out well, I'll tell 0:04:01.720 --> 0:04:04.400 you it was early on. It was the Democratic regions 0:04:04.400 --> 0:04:08.480 where the problems were at Everyone criticized President Trump for that. 0:04:08.640 --> 0:04:12.960 I think, frankly, to be fair, the president, this president 0:04:13.120 --> 0:04:17.880 now in the administration bears the responsibility and certainly, you know, 0:04:18.000 --> 0:04:22.000 perhaps for the first time, bring both parties together on 0:04:22.040 --> 0:04:25.120 this mission, because I think it is so important right now. 0:04:25.160 --> 0:04:29.360 Again it is. It's frustrating for us of us who 0:04:29.400 --> 0:04:32.320 think we should find common ground here to have this 0:04:32.480 --> 0:04:35.760 just go at a loan mentality. I'm a little frustrated 0:04:35.800 --> 0:04:38.000 with it. But we have to keep making progress and 0:04:38.000 --> 0:04:41.080 it's not going door to door, not mandating. I think 0:04:41.120 --> 0:04:42.520 we can do more of that. I think we can 0:04:42.520 --> 0:04:45.560 do better. All right, Just a forty five seconds left. Congressman, 0:04:45.600 --> 0:04:48.600 I'm wondering you talk about bipartisanship and bringing people together 0:04:48.680 --> 0:04:52.320 in Washington. What's your chance in your opinion based on 0:04:52.360 --> 0:04:55.279 your Republican colleagues of having a bipartisan agreement in a 0:04:55.400 --> 0:04:58.719 very near term on this one trillion dollar infrastructure spending 0:04:58.760 --> 0:05:01.560 package that so many people uh seemed to support whatever 0:05:01.560 --> 0:05:04.080 side of the aisle that they are on. Yeah, I 0:05:04.120 --> 0:05:06.440 think I think we're all hopeful that they can find 0:05:06.480 --> 0:05:08.960 common ground here. We haven't seen munch of details, but 0:05:09.000 --> 0:05:12.640 I think we're we're encouraging people to find common grounds. 0:05:12.720 --> 0:05:16.680 I'm left optimistic about the votes for because clearly the Speaker, 0:05:16.880 --> 0:05:20.039 Clothy and leaders Humor want this to be the pilot 0:05:20.120 --> 0:05:22.760 shoot that pulls along that three and a half trillion 0:05:22.760 --> 0:05:26.680 dollar massive expansion of the welfare state. There won't be 0:05:26.760 --> 0:05:29.920 Republican and support that if they were truly separate. If 0:05:29.920 --> 0:05:33.440 one went forward period, I think there'd be song support 0:05:33.480 --> 0:05:37.479 from structure. We all to get it done. Kevin, Thank 0:05:37.480 --> 0:05:39.880 you so much. Kevin Ready with US of Texas greatly 0:05:39.880 --> 0:05:47.960 appreciated the Congressman from the Woodlands. Right now, off of 0:05:48.040 --> 0:05:51.919 Dr Bremer's comments, Dr emsh adalgia with JOHNS. Hopkins Center 0:05:52.240 --> 0:05:55.440 for Health Security, I need to talk to you doctor 0:05:55.520 --> 0:06:00.720 about the medicine realities within democracy and liberty. Ian Bremer 0:06:00.880 --> 0:06:05.480 is talking from a political aspect, you represent the medical aspect. 0:06:05.560 --> 0:06:10.159 Can you succeed that your medicine amid American democracy and 0:06:10.240 --> 0:06:14.760 our definition of American liberty? Yes, I think we can. 0:06:14.839 --> 0:06:17.200 And I think if you're talking about vaccine mandates, I 0:06:17.200 --> 0:06:19.400 think it's one thing for the government to mandate, and 0:06:19.440 --> 0:06:22.520 I think that's very difficult and doesn't usually happen. But 0:06:22.640 --> 0:06:26.640 we've got so many private organizations, employers, schools, or things 0:06:26.640 --> 0:06:30.120 that are transportation companies where I do think it's justified 0:06:30.320 --> 0:06:33.039 for mandates, including in my own industry where we're struggling 0:06:33.120 --> 0:06:35.279 to get nurses, for example vaccine. And so I do 0:06:35.400 --> 0:06:39.440 think that when we institute mandates, you see vaccination rates 0:06:39.480 --> 0:06:41.960 go up, and I think it illustrates confidence in the 0:06:42.040 --> 0:06:44.640 vaccines because they are safe and effective. This you should 0:06:44.640 --> 0:06:49.279 be a non controversial vaccine. Why are selected nurses afraid 0:06:49.360 --> 0:06:54.039 to be vaccinated. It's unclear to me, because plus of 0:06:54.080 --> 0:06:56.320 doctors are vaccinated, But when you go to nurses, it's 0:06:56.360 --> 0:06:59.720 maybe in some hospitals fift and it's likely because they've 0:06:59.720 --> 0:07:03.159 swall of misinformation, At least from my personal experience talking 0:07:03.160 --> 0:07:05.520 to some of these nurses, they've seen something on Facebook 0:07:05.880 --> 0:07:10.520 specifically things about fertility, things about this being experimental. Uh. 0:07:10.520 --> 0:07:12.920 And there are some people who believe these ideas about 0:07:13.000 --> 0:07:16.280 microchips and five G as well, which is kind of surprising, 0:07:16.560 --> 0:07:19.679 but it's taken hold, and I think the nursing unions 0:07:19.680 --> 0:07:22.800 have kind of given them cover and have blocked administrators 0:07:22.800 --> 0:07:26.160 from or at least scared off administrators from mandating the vaccines, 0:07:26.200 --> 0:07:27.680 but more and more of them are going to do it, 0:07:27.680 --> 0:07:30.000 and I think once we get full left approval, I 0:07:30.000 --> 0:07:32.400 think it's really going to be universal. I think the 0:07:32.480 --> 0:07:36.040 VA steps yesterday as well as other organizations, are going 0:07:36.080 --> 0:07:38.400 to make it the norm that health care workers should 0:07:38.400 --> 0:07:40.800 be vaccinated. And I think that's what it should be 0:07:40.800 --> 0:07:43.720 because it's it's a professional obligation and I was one 0:07:43.760 --> 0:07:45.640 of the first people to get vaccinated the minute I 0:07:45.680 --> 0:07:48.600 could before Christmas amish. Some people might say this is 0:07:48.600 --> 0:07:51.400 an overly narrow or complicated issue at this time of 0:07:51.440 --> 0:07:52.960 the day, but I feel like this goes to the 0:07:53.000 --> 0:07:55.160 heart of the issue, and that is the Department of 0:07:55.200 --> 0:07:57.640 Justice and the memo that they put out yesterday basically 0:07:57.680 --> 0:08:01.480 saying that even though this vaccine only has emergency authorization, 0:08:01.800 --> 0:08:06.160 that doesn't necessarily mean that employers and that universities cannot 0:08:06.240 --> 0:08:09.600 mandate that people get vaccinated. This sort of goes to 0:08:09.680 --> 0:08:12.880 the heart of the issue of legal immunity for entities 0:08:12.880 --> 0:08:15.920 that decide to create some sort of vaccination mandates. How 0:08:15.960 --> 0:08:20.400 important is it for the government to lead on this issue. 0:08:20.800 --> 0:08:23.880 It's important that the government give these companies assurance because 0:08:23.920 --> 0:08:26.239 they were kind of brought into this by the government's 0:08:26.240 --> 0:08:30.000 request through Operation Warp Speed. And often during pandemics, when 0:08:30.000 --> 0:08:33.080 there's a public health emergency, there are indemnifications done for 0:08:33.120 --> 0:08:35.960 those companies in order to get them to make this 0:08:36.080 --> 0:08:37.800 vaccine because they have to do it quickly, they have 0:08:37.920 --> 0:08:40.920 to do it uh in an expeditious manner, and there 0:08:40.960 --> 0:08:43.120 is some uncertainty, and this is what happened during the 0:08:44.120 --> 0:08:47.280 seventy six wine fluid, happened during two thousand and one pandemic. 0:08:47.480 --> 0:08:49.560 So I think it is important that the government say 0:08:49.679 --> 0:08:53.760 that these companies are going to be um indemnified because 0:08:53.800 --> 0:08:55.319 we're in a we're in it. Basically, this is a 0:08:55.360 --> 0:08:59.440 government run program in order to curtail this pandemic. I 0:08:59.520 --> 0:09:01.600 don't think that there's going to be that many losses. 0:09:01.600 --> 0:09:03.880 So because when you look at the safety and efficacy 0:09:03.880 --> 0:09:06.160 of these vaccines. They're really off the charts when it 0:09:06.200 --> 0:09:09.600 comes to any vaccines that humans have ever created. So 0:09:09.640 --> 0:09:13.520 then why haven't they Why haven't these vaccines gotten full authorization? 0:09:13.559 --> 0:09:15.960 Why do we still have an asterisk around them at 0:09:16.000 --> 0:09:18.400 a time when there is such efficacy rates? And why 0:09:18.520 --> 0:09:20.679 is it that kids under the age of twelve cannot 0:09:20.679 --> 0:09:25.320 get vaccinated? So the emergency use authorization was necessary because 0:09:25.600 --> 0:09:27.320 in order for the f DAY to approve a vaccine, 0:09:27.320 --> 0:09:29.080 they need six months of data. That's just sort of 0:09:29.080 --> 0:09:32.439 what they do. So I fiser recently crossed that threshold. 0:09:32.600 --> 0:09:36.120 They've applied now for priority review. It's likely to happen 0:09:36.200 --> 0:09:38.640 faster than than the six months that they have during 0:09:38.640 --> 0:09:40.640 a priority review, but it is something that I think 0:09:40.679 --> 0:09:43.160 we should do faster and quicker because we know that 0:09:43.200 --> 0:09:45.600 this is holding up many places for mandating the vaccines, 0:09:45.640 --> 0:09:48.520 and it's giving anti vaccine activists a talking point calling 0:09:48.520 --> 0:09:51.600 an experimental even though emergency use authorizations have been around 0:09:51.800 --> 0:09:53.560 for a long time, when we use them during H 0:09:53.559 --> 0:09:55.880 one N one and doing PICA, I think that we're 0:09:55.880 --> 0:09:59.679 gonna see children approved below the age of twelve. But 0:09:59.720 --> 0:10:01.719 it's in iportant that we do the studies because we're 0:10:01.720 --> 0:10:03.560 trying to make sure that this is safe and effective 0:10:03.559 --> 0:10:06.600 at the risk benefit ratio favors the vaccine in that 0:10:06.679 --> 0:10:08.960 age group because remember, as you get to those younger 0:10:09.000 --> 0:10:12.800 age groups, the risk of severe disease falls to very 0:10:12.840 --> 0:10:15.280 low levels, lower than influenza for a child less than 0:10:15.280 --> 0:10:17.120 twelve years of age. So we want to get it right, 0:10:17.200 --> 0:10:19.320 want to get the dosing right. Hopefully this will be 0:10:19.360 --> 0:10:22.640 something that we see probably in late fall early winter. 0:10:23.040 --> 0:10:26.120 Dr Deult join a game theory basis, It seems to 0:10:26.120 --> 0:10:29.680 be that the medical community is drowning in success. It's 0:10:29.720 --> 0:10:34.320 a miracle that we got the mRNA vaccines done so quickly. 0:10:34.960 --> 0:10:38.280 Is most of the angst right now, because this is 0:10:38.360 --> 0:10:43.480 all happening so fast, unlike a slower process of previous pandemics. 0:10:44.960 --> 0:10:47.360 It may be part of it because m RNA vaccines 0:10:47.600 --> 0:10:50.520 do give you that great advantage to make a vaccine 0:10:50.559 --> 0:10:54.079 candidate within hours or weeks and then move into clinical 0:10:54.080 --> 0:10:56.680 trials quickly. And I think that the lightning speed of this, 0:10:56.800 --> 0:10:58.520 which was one of the advantages of m r and 0:10:58.600 --> 0:11:02.439 A vaccines, has been something that people have exploited to 0:11:02.480 --> 0:11:05.520 say this happened too quickly, But you imagine if we 0:11:05.520 --> 0:11:08.079 were still waiting the old way for a new vaccine, 0:11:08.640 --> 0:11:10.800 how many more hundreds of thousands of people would have 0:11:10.840 --> 0:11:13.440 died United, how many illnesses would have happened. So I 0:11:13.520 --> 0:11:16.360 think that the speed of the MR and A vaccines 0:11:16.440 --> 0:11:18.959 is what makes them the most attractive thing about them, 0:11:19.000 --> 0:11:21.200 and it's probably going to change the way we face 0:11:21.280 --> 0:11:24.400 infectious disease outbreaks in the future forever. It's it's a 0:11:24.480 --> 0:11:27.520 huge advantage and we now have as humans against the 0:11:27.600 --> 0:11:30.160 viral kingdom. Doctor. We appreciate your time and thank you 0:11:30.280 --> 0:11:32.360 very much for your heart works joining us at the 0:11:32.440 --> 0:11:34.600 end of a very long shift. I'm sure doctor amish 0:11:34.600 --> 0:11:37.160 it down to the John's Hopkins Center for how Security, 0:11:37.160 --> 0:11:46.160 senior scholar. Most people in this building would call me 0:11:46.200 --> 0:11:49.320 a humble guy, extremely humble and always willing to listen 0:11:49.360 --> 0:11:51.880 to really smart people. And here's the first line in 0:11:51.880 --> 0:11:54.319 the note that I got from Jude to Immanuel his guests. No, 0:11:54.440 --> 0:11:57.120 it's just the first line, Tom, Johnny is right, So 0:11:57.200 --> 0:12:00.079 let's start there. Judemanuel bt I g chief for a 0:12:00.400 --> 0:12:03.480 derivative strategist. J Let's stop that. Why is John Wright? 0:12:05.240 --> 0:12:07.800 Because John, You've been saying this for quite some time 0:12:07.840 --> 0:12:10.720 now that you know, just asking the question, why can't 0:12:10.760 --> 0:12:14.160 you just be a passive S and P index investor 0:12:14.840 --> 0:12:18.760 in a world where, if you look at one, active management, 0:12:18.800 --> 0:12:21.840 as we heard from guests earlier in the show, has 0:12:21.880 --> 0:12:24.480 been giving you headaches for the most part, at least 0:12:24.480 --> 0:12:28.640 the last several months. The answer is to us, because 0:12:29.080 --> 0:12:33.400 if you're just simply a passive investor, you sort of 0:12:33.440 --> 0:12:36.559 are open to this range of emotions that frankly, if 0:12:36.559 --> 0:12:38.680 you look at the course of investing over the last 0:12:38.679 --> 0:12:41.080 twelve or thirteen years, certainly since the bottom of the 0:12:41.080 --> 0:12:44.520 financial crisis, you have to be in the psychological mode 0:12:45.000 --> 0:12:48.440 to where you're buying the dips. It's very difficult to 0:12:48.600 --> 0:12:52.000 say I'm going to commit cash in March of last year. 0:12:52.400 --> 0:12:55.120 Very difficult to say I'm going to commit cash in 0:12:55.200 --> 0:12:57.560 March of two thousand and nine, the times when you 0:12:57.640 --> 0:13:01.040 really wanted to do it. So either having something that 0:13:01.120 --> 0:13:04.520 causes you to outperform to the upside or outperformed of 0:13:04.600 --> 0:13:08.720 the downside gives you that psychological edge to do what 0:13:09.000 --> 0:13:11.520 we think you're gonna need to do and want to 0:13:11.559 --> 0:13:13.679 do for a number of years to come. I should 0:13:13.679 --> 0:13:15.800 be very careful here I'm not making a trade recommendation, 0:13:15.880 --> 0:13:17.560 want to be clear about that, Julian. You're the man 0:13:17.600 --> 0:13:19.720 who's got to do that for me. Work through it 0:13:19.760 --> 0:13:21.880 now then with me. I got all these issues on 0:13:21.920 --> 0:13:24.439 the horizon at the moment. How COVID cases play out. 0:13:24.480 --> 0:13:28.240 Do they translate into higher depths, increased hospitalizations, maybe more 0:13:28.280 --> 0:13:31.000 restrictions on the economy that just turned down the dial 0:13:31.040 --> 0:13:33.160 on mobility. Then you've got the China factor as well. 0:13:33.400 --> 0:13:36.439 It's just worry after worry, Julian, just parting up as always, 0:13:36.440 --> 0:13:39.079 and this market keeps climbing that wall of worry to 0:13:39.200 --> 0:13:43.160 all time highs. How do you navigate those issues? So again, look, 0:13:43.400 --> 0:13:46.840 the price action tells all right now. And the price action, 0:13:48.360 --> 0:13:51.040 even though it is telling all, is telling us somewhat 0:13:51.080 --> 0:13:54.559 contradictory message that at the headline, the S and P 0:13:54.679 --> 0:13:58.760 five continues to rise, very much propelled by the NAZAC 0:13:59.000 --> 0:14:02.480 within the NASDA, very much propelled by a number of stocks, 0:14:02.720 --> 0:14:05.040 all of whom we're gonna hear about earnings over the 0:14:05.080 --> 0:14:08.440 next two to three days. Um, but you, there is 0:14:08.520 --> 0:14:13.560 starting to be a diminution amongst the rest of the troops. 0:14:14.120 --> 0:14:18.760 Breath has turned a little bit soft that can continue. 0:14:19.560 --> 0:14:22.280 But frankly, from our point of view, when you look 0:14:22.320 --> 0:14:24.720 at the bigger picture, when you've seen the kind of 0:14:24.760 --> 0:14:28.320 economic strength that we have seen build over the course 0:14:28.360 --> 0:14:31.560 of the year, whether this is the peak growth or not, 0:14:32.120 --> 0:14:35.560 the implication is stocks are likely moving higher over a 0:14:35.680 --> 0:14:38.640 multi year period. From Julie, you look at the dynamics 0:14:38.800 --> 0:14:40.960 that are out there, the derivatives and all that. Let's 0:14:40.960 --> 0:14:42.960 look at the one derivative, which is cash on the 0:14:43.040 --> 0:14:47.880 balance sheet today this afternoon. The three big ones Microsoft, Apple, 0:14:48.400 --> 0:14:52.920 the other one Google hundred thirty five plus plus two 0:14:53.000 --> 0:14:56.600 hundred and four kazillion dollars. These guys could top trick 0:14:56.840 --> 0:15:01.000 half a trillion dollars cash in their report worth this afternoon. 0:15:01.560 --> 0:15:04.280 What's the social good of all that money? Should they 0:15:04.320 --> 0:15:09.280 return it to shareholders? Well, look, they are for the 0:15:09.320 --> 0:15:14.720 most part slowly through buy backs. Um, you know, the 0:15:15.400 --> 0:15:18.640 signaling of sort of a special dividend or something like 0:15:18.680 --> 0:15:23.240 that from companies like that that are poised for continuous growth. 0:15:23.280 --> 0:15:27.040 Secular growers has tended over time not to be good. 0:15:27.200 --> 0:15:30.720 You can argue about the social good, but I think frankly, 0:15:30.920 --> 0:15:33.120 what you're going to hear from them is, you know, 0:15:33.400 --> 0:15:39.280 ways of getting stakeholders more included in the debate rather 0:15:39.320 --> 0:15:43.560 than just shareholders. So talking about wages, talking about employment 0:15:43.560 --> 0:15:48.920 programs in an economy that frankly confounds people because of 0:15:49.640 --> 0:15:53.600 the lack of the return of the participation rate in 0:15:53.640 --> 0:15:58.080 a in a market where there are jobs incredibly plentiful. Julian, 0:15:58.120 --> 0:16:00.480 what's signaling power does the bond market have for equities 0:16:00.480 --> 0:16:04.720 at this point? Lisa, that is the I don't know, 0:16:05.160 --> 0:16:09.160 twenty trillion dollar question the size of the U S economy. 0:16:09.280 --> 0:16:14.320 From our point of view, Uh, it's really rather limited. Look. Obviously, 0:16:14.360 --> 0:16:16.840 we know that the Fed has, as you said earlier, 0:16:17.160 --> 0:16:20.760 put their thumb on the bond market. Um. But also 0:16:20.880 --> 0:16:24.440 when you think about it, all the extraordinary monetary and 0:16:24.560 --> 0:16:28.720 fiscal stimulus has come together to chase asset prices higher 0:16:29.000 --> 0:16:34.520 across the entire range, whether it's commodities earlier in the year, obviously, stocks, 0:16:35.200 --> 0:16:39.360 goods prices i e. Inflation, or the bond market. To us, 0:16:39.480 --> 0:16:42.160 it's all the wall of money. And the question is 0:16:42.360 --> 0:16:46.440 is policy or perceptional likely to change? And our view 0:16:46.600 --> 0:16:49.040 is that you could get to a point where if 0:16:49.080 --> 0:16:53.960 the labor market does sort of uh, remove the logjam 0:16:54.080 --> 0:16:57.080 that we have come the fall, which is the Fed's expectation. 0:16:57.600 --> 0:16:59.800 UH in an environment where the FED is not likely 0:16:59.800 --> 0:17:03.840 to advance the taper conversation materially, this week you could 0:17:03.880 --> 0:17:06.679 see yields start to rise in the long end, Julian, 0:17:06.720 --> 0:17:08.880 just quickly, you still at full pans and dr end 0:17:09.040 --> 0:17:13.480 on SMP. We are, and and here's here's the reasoning. John. Again, 0:17:13.520 --> 0:17:17.440 as I said earlier, this kind of economic strength, while 0:17:17.480 --> 0:17:20.840 it bodes very very well on a multi year period, 0:17:21.280 --> 0:17:25.720 doesn't necessarily mean that corrections don't happen. We've gone quite 0:17:25.760 --> 0:17:29.320 some time without a correction, and frankly, we're concerned about 0:17:29.400 --> 0:17:33.040 some of those internals, the lack of breath um and 0:17:33.080 --> 0:17:35.480 we think, actually, if you look at it, this be 0:17:35.520 --> 0:17:38.760 a week where there's a potential for a surprise in 0:17:38.840 --> 0:17:41.800 terms of reaction from the large cap tex stocks, which 0:17:41.800 --> 0:17:44.679 have been doing all the heavy lifting. Interesting they started 0:17:44.680 --> 0:17:47.600 reporting in earnest a little bit later after the close, Julian, 0:17:47.600 --> 0:17:50.480 thank you, sir, Jenny Emanuel Ba, chief equity and derivative 0:17:50.480 --> 0:17:57.240 strategist Judian love catching up these sur and so White 0:17:59.200 --> 0:18:01.720 we're gonna start stop now and look at Apple will 0:18:01.760 --> 0:18:04.520 power with us with Bear the senior research analysts with 0:18:04.560 --> 0:18:06.879 a terrific note, and what's so great about will power? 0:18:06.960 --> 0:18:10.159 At the bottom of his note he shows you his 0:18:10.280 --> 0:18:13.600 belief and his track record from another time. This is 0:18:13.640 --> 0:18:17.879 a guy who just before COVID, just before the pandemic, 0:18:18.440 --> 0:18:23.439 was outperformed on ninety and will power sustain that outperform 0:18:23.440 --> 0:18:28.000 through thick and thin? Will power you sustain your outperformed today? Simply? 0:18:28.080 --> 0:18:32.640 Can Beijing upset the Apple Apple cart? Can Beijing all 0:18:32.720 --> 0:18:38.160 this upset in China derail your outperform? Well, Tom, that's 0:18:38.160 --> 0:18:41.040 a great question. Good morning. Thanks, there's always for having me. 0:18:41.240 --> 0:18:43.840 Great great to be on on the on the show. Here. 0:18:44.119 --> 0:18:46.360 Look at China is always a big wild card, and 0:18:46.520 --> 0:18:49.160 you know, at least at this point has still been 0:18:49.760 --> 0:18:52.240 a big driver of Apples and results, and we're still 0:18:52.400 --> 0:18:54.680 expecting that to change near term. But it's certainly something 0:18:54.680 --> 0:18:57.600 we keep an eye on with all the tumult that's 0:18:57.640 --> 0:18:59.879 that's underway in that country with respect to you know, 0:19:00.119 --> 0:19:02.680 other other tech companies, But at this point Apples be 0:19:02.760 --> 0:19:06.280 able to navigate that market fairless successfully. Of course, that's 0:19:06.320 --> 0:19:08.040 just one piece of the puzzle for Apple. As you 0:19:08.080 --> 0:19:10.560 think about the broad based drink we expect again you 0:19:10.600 --> 0:19:13.160 know this quarter. Well, as you know, the cheap guide 0:19:13.160 --> 0:19:15.320 to Apple over the last decade is just to buy it, 0:19:15.520 --> 0:19:18.000 to keep buying it, and then to keep buying it. 0:19:18.000 --> 0:19:20.320 It's complex on one front, though, and I've always struggled 0:19:20.359 --> 0:19:21.800 with it, and I'd love you to guide me through it. 0:19:22.000 --> 0:19:25.040 What multiple do you put on a name like Apple 0:19:25.119 --> 0:19:29.120 given the evolution of this company over the last ten years. Well, 0:19:29.119 --> 0:19:31.360 it's a great question. It's been one of the central questions, 0:19:31.359 --> 0:19:33.840 and I think you know, lunch panel probably if there's 0:19:33.840 --> 0:19:37.399 a bare thesis is probably on the valuation, decreation and 0:19:37.640 --> 0:19:41.200 multiple expansion. You know that that's occurred here over time. Look, 0:19:41.480 --> 0:19:43.520 we played a long game with Apple, right, and our 0:19:43.600 --> 0:19:45.600 view over a long pretty time has been it will 0:19:45.600 --> 0:19:49.400 continue to grow into valuation and you're betting on their 0:19:49.440 --> 0:19:52.720 ability to continue to add new value added you know, 0:19:52.840 --> 0:19:56.400 services and solution you know, for in customers, and that 0:19:56.560 --> 0:19:59.280 in turn continues to drive you know more, you know, 0:19:59.359 --> 0:20:03.399 shareholder value. Our view is that increasingly you know, falls 0:20:03.440 --> 0:20:05.639 into the consumer staples camp, right, so that it's not 0:20:05.720 --> 0:20:08.280 a name that you can like cop against traditional big 0:20:08.320 --> 0:20:10.520 cap tech you know, per se. If you start to 0:20:10.520 --> 0:20:13.320 look at consumer stables names it's you know, we think 0:20:13.359 --> 0:20:16.560 you can justify multiple and get your closer to thirty times, 0:20:16.600 --> 0:20:18.480 which ultimately is what we're currently using to get to 0:20:18.520 --> 0:20:20.600 our hundred sixty dollar target price. Well, this is an 0:20:20.640 --> 0:20:23.320 important point, the idea that you emphasize services. Does that 0:20:23.359 --> 0:20:26.600 mean that at this point people are basically not looking 0:20:26.640 --> 0:20:29.919 for Apple to necessarily innovate with the Apple Watch or 0:20:29.960 --> 0:20:32.320 some other product that really it has to do with 0:20:32.400 --> 0:20:35.960 ongoing revenues from either iPhone sales or from the services 0:20:36.160 --> 0:20:38.160 that you can get on the iPhone that will determine 0:20:38.280 --> 0:20:41.080 the future revenues. Well, I think that's a great point, 0:20:41.160 --> 0:20:44.880 and look at me services now is of revenue, it's 0:20:44.920 --> 0:20:48.800 growing north of has a much higher than average who's 0:20:48.840 --> 0:20:52.280 margin and close to se and that's that's a big 0:20:52.320 --> 0:20:55.840 part of the story in terms of driving higher higher 0:20:55.920 --> 0:20:59.119 multiple than what it traded at historically. And our expectation 0:20:59.200 --> 0:21:01.240 is that can tanna look at me they I think 0:21:01.320 --> 0:21:04.520 just last quarter reported of course, the six D sixty 0:21:04.560 --> 0:21:07.920 million paid subscriptions you know on the platform. That's the 0:21:07.960 --> 0:21:10.960 number that continues to rise by forty million, you know, 0:21:11.040 --> 0:21:13.760 every quarter, and that's why it's critical that that services 0:21:13.760 --> 0:21:16.240 like Apple TV Plus and things down the road continue 0:21:16.880 --> 0:21:19.440 um to take off because that helps that helps strive 0:21:19.520 --> 0:21:21.840 that line of business for them. Of course, that's just 0:21:21.880 --> 0:21:23.399 one piece of it, right The key to the story 0:21:23.400 --> 0:21:27.080 has been the consistent diversification beyond iPhone, which is now 0:21:27.200 --> 0:21:29.440 a little underfif of revenue, but still of course the 0:21:29.560 --> 0:21:31.879 lynchpin to the story and a big driver near a 0:21:31.920 --> 0:21:34.160 medium term. Still, would you like to see Apple become 0:21:34.200 --> 0:21:36.440 a media company? I mean, there's been so much speculation 0:21:36.680 --> 0:21:39.800 about their buying let's say, a Netflix or some other 0:21:39.880 --> 0:21:44.080 big service provider that way to enhance their Apple TV. 0:21:44.600 --> 0:21:47.800 Is that still on the table? Well, I think Apple 0:21:47.840 --> 0:21:49.919 TV Plus is very much on the table as you 0:21:49.960 --> 0:21:52.280 know right, Ted Lasso of course has been a great show, 0:21:52.920 --> 0:21:55.000 but they need a few more hits like that. I 0:21:55.040 --> 0:21:58.159 think at this point it doesn't appear they plan to 0:21:58.200 --> 0:22:01.200 buy a major media company. I'm kind of jump start 0:22:01.240 --> 0:22:03.879 that effort. I mean, what kinds that's always twenty Perhaps 0:22:03.960 --> 0:22:06.120 they should have done that, Perhaps they should have looked 0:22:06.119 --> 0:22:08.240 at something in the Tontom Hiss viah Gole market. I 0:22:08.280 --> 0:22:10.480 think these are all things of intense interests as you 0:22:10.640 --> 0:22:12.280