WEBVTT - Surveillance: U.S. Economic Data With Loh 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 Jailey. We bring you 0:00:13.320 --> 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, SoundCloud, Bloomberg dot Com, 0:00:23.920 --> 0:00:29.920 and of course, on the Bloomberg Terminal. Marvin Lowe will 0:00:29.960 --> 0:00:33.400 be with us right now. He's Global macro strategists at 0:00:33.520 --> 0:00:36.240 State Street Global Markets. Kaylee lines, why don't you lead 0:00:36.280 --> 0:00:39.519 off with Mr? Lowe? Well, Marvin obviously is Lisa was 0:00:39.520 --> 0:00:42.120 saying that the market is looking for confirmation in this 0:00:42.240 --> 0:00:45.880 data of a more hawkish, more quickly moving federal reserve. 0:00:45.960 --> 0:00:48.720 Do you think the repricing of those expectations has been 0:00:48.760 --> 0:00:52.280 overblown given the numbers that we're seeing. You know what, 0:00:52.560 --> 0:00:55.560 today's data just confirms that we're moving in the right direction. 0:00:55.600 --> 0:00:59.000 Activity is accelerating to the fourth quarter. UM, that's no 0:00:59.120 --> 0:01:02.680 new news. There. There are hints that the job market 0:01:02.800 --> 0:01:04.959 is UM is pretty good in today's numbers. So it 0:01:05.000 --> 0:01:08.120 really does become that interplay between inflation and jobs. We 0:01:08.160 --> 0:01:10.880 know inflation is more than what they want. UM, if 0:01:10.880 --> 0:01:12.560 there are signs that if there are signs that the 0:01:12.680 --> 0:01:16.479 job market is going to heal itself faster than let's say, 0:01:16.520 --> 0:01:19.280 the second half of next year. Um, you know, rate 0:01:19.319 --> 0:01:21.440 hikes are gonna be live. But having said that, we're 0:01:21.480 --> 0:01:25.640 already pricing amid two and starting to think about May 0:01:25.680 --> 0:01:28.840 of two. So I don't see how much more we 0:01:28.880 --> 0:01:31.240 can get from an aggressive side of things. And because 0:01:31.240 --> 0:01:33.040 I'd probably like that it's getting the market to do 0:01:33.080 --> 0:01:35.560 the tightening for them before they actually have to get 0:01:35.600 --> 0:01:38.680 into the souper nuts there. When can we actually count 0:01:38.680 --> 0:01:40.600 on this data not being noisy? I mean, I'm looking 0:01:40.680 --> 0:01:43.639 right now at initial job with claims and form my data, 0:01:43.760 --> 0:01:45.280 and what it looks like is that this is the 0:01:45.319 --> 0:01:49.200 lowest claims figure going back in decades. This is what 0:01:49.280 --> 0:01:51.600 seems to be a hot market. And yet, as Michael 0:01:51.680 --> 0:01:54.240 McKee was saying, it could be noisy, it is holiday time. 0:01:54.560 --> 0:01:57.480 At what point can we say, no, this actually reflects reality? 0:01:58.600 --> 0:02:02.240 You know what I think about how this year has evolved. 0:02:02.280 --> 0:02:04.080 Where we started in the beginning of the year, and 0:02:04.080 --> 0:02:05.559 we said by the middle of the year we're gonna 0:02:05.560 --> 0:02:07.720 get clean data. Um, and then it was gonna be 0:02:07.800 --> 0:02:08.920 and then it was going to be in the fall 0:02:08.960 --> 0:02:11.079 and that hour at the fall, going into the winter. 0:02:11.280 --> 0:02:14.239 I think it's gonna take until the middle of next 0:02:14.320 --> 0:02:16.680 year before we get a real solid picture of what 0:02:16.800 --> 0:02:20.160 jobs looks like, what prices look like, how these supply 0:02:20.280 --> 0:02:22.280 shocks are are going to make their way out if 0:02:22.360 --> 0:02:24.880 it's gonna have to make some heart decisions based on 0:02:25.000 --> 0:02:27.920 data that's not perfect however, UM, but we've got a 0:02:27.960 --> 0:02:31.840 lot of moving parts, and that pricing data is really 0:02:32.400 --> 0:02:35.720 gonna be in flux. Remember that's beautifully said. In around 0:02:35.720 --> 0:02:38.560 all the different opinions we have on Blueberg surveillance, what 0:02:38.639 --> 0:02:42.520 we can say is consensus is ephemeral, to say the least, 0:02:43.160 --> 0:02:47.600 except we still have to invest. What is your investment 0:02:47.760 --> 0:02:52.200 stands given your ambivalence or your wait and see until 0:02:52.280 --> 0:02:56.079 fourth of July two thousand twenty two, We we we 0:02:56.080 --> 0:02:57.799 we do have to invest in, and we've got to 0:02:57.800 --> 0:03:00.160 look at what we think the world is gonna like, 0:03:00.320 --> 0:03:03.239 in which you know, ultimately companies and economies are going 0:03:03.280 --> 0:03:06.160 to uh to benefit from that. UM. I do think 0:03:06.200 --> 0:03:08.600 that the long end the curve is sending messages the 0:03:08.600 --> 0:03:11.560 fact that you know, whether it's a um A Greenspan 0:03:11.680 --> 0:03:16.359 type conundrum or a view that growth becomes dear against 0:03:16.440 --> 0:03:18.640 once we get to the other side of things is 0:03:18.639 --> 0:03:20.680 telling from me. So you know I continue to like 0:03:20.880 --> 0:03:23.760 um like the growth aspects of the U S economy. UM, 0:03:23.800 --> 0:03:27.600 I do think yields have remained contained and will remain contain. 0:03:27.800 --> 0:03:31.160 That means that growth is dear, income is dear um 0:03:31.320 --> 0:03:35.560 and globally you look for those environments that can benefit 0:03:35.640 --> 0:03:38.720 from that type of environment. Marvin Little, thank you so much. 0:03:38.760 --> 0:03:41.000 Too short to visit here with all this economic data 0:03:41.080 --> 0:03:48.280 with State Street today, greatly greatly appreciate that what we 0:03:48.360 --> 0:03:51.960 do is speak to experts, and Mike Wilson is uniquely 0:03:52.040 --> 0:03:55.840 qualified at Morgan Stanley to lead their equity coverage. He 0:03:55.920 --> 0:04:00.720 does so with some terrific securities analysis is at his 0:04:00.880 --> 0:04:04.600 back in economics of ellen Zner is well, Mike Wilson, 0:04:04.640 --> 0:04:07.280 I want to go to the wonderful Katie Huberty, who's 0:04:07.320 --> 0:04:10.600 looking at hardware in tech. And what Katie Huberty says 0:04:10.680 --> 0:04:15.400 to your cautious call on markets, would everybody calm down. 0:04:16.040 --> 0:04:19.119 Supply is gonna come back and we're gonna get back 0:04:19.160 --> 0:04:24.159 to some normal Why will stocks be quite essent if 0:04:24.200 --> 0:04:28.400 we get back to Katie Huberty is normal? Well, thanks 0:04:28.440 --> 0:04:31.600 time and happy Thanksgiving to everyone. Look, I think, well, 0:04:31.680 --> 0:04:35.040 Katie is actually very much in kind of our page. Frankly, 0:04:35.480 --> 0:04:39.240 she's very focused on you know, the you know, the 0:04:39.279 --> 0:04:42.680 supply channels are not going to rectify themselves quickly, and 0:04:43.040 --> 0:04:47.440 there's a chance that we've actually seen some overordering along 0:04:47.520 --> 0:04:50.240 the supply chain, particularly in tech hardware, which is her 0:04:50.279 --> 0:04:53.880 area of coverage, and and and so we're aligned. In fact, 0:04:53.960 --> 0:04:55.720 I would say Katie and I are more lined than 0:04:55.839 --> 0:04:58.960 I am with some of the other analysts at the 0:04:59.000 --> 0:05:01.640 Home Company, and that around this idea that we could 0:05:01.680 --> 0:05:04.720 have a paymack. As supply comes on, we might see 0:05:04.760 --> 0:05:08.360 some double orderings canceled and that may take a little 0:05:08.360 --> 0:05:10.280 time to digest. So we have I think the supply 0:05:10.320 --> 0:05:13.320 issue now that's pretty obvious. Inflation is the you know, 0:05:13.360 --> 0:05:15.560 the talk of the day in FETs reacting to that, 0:05:15.600 --> 0:05:18.560 and I think that's appropriate. However, there is a possibility 0:05:18.600 --> 0:05:20.640 that you know, we get into next year and a 0:05:20.800 --> 0:05:24.720 supply kind of picks up and we actually see demand curtailed, 0:05:25.080 --> 0:05:27.240 right because we did over consume a lot of things, 0:05:27.279 --> 0:05:29.560 and tech Harbard was one of those areas, and that's 0:05:29.560 --> 0:05:31.479 gonna take a little time to work through time, and 0:05:31.520 --> 0:05:33.960 that's one of the reasons why we think next year 0:05:33.960 --> 0:05:35.960 it's you know, at the index level, we've we've priced 0:05:36.000 --> 0:05:37.400 a lot of good news and it's probably gonna be 0:05:37.440 --> 0:05:40.640 more of a flatish year. Mike Wilson, David will David Wilson, 0:05:40.800 --> 0:05:44.240 no relation retiring from Bloomberg here in a bed. Just 0:05:44.279 --> 0:05:47.960 put up a spectacular Christopher on chart which shows Russell 0:05:48.040 --> 0:05:51.159 one thousand versus two thousand. And you know, the lack 0:05:51.200 --> 0:05:54.000 of breadth in this market is part of the Mike 0:05:54.080 --> 0:05:59.440 Wilson call that big tech will be crushed. Well the 0:05:59.480 --> 0:06:01.720 crush is a strong word, but I mean, look, our 0:06:01.800 --> 0:06:04.880 our big out of consensus call for next year is valuations. 0:06:05.160 --> 0:06:06.760 Then that was you know, someone of our call this 0:06:06.839 --> 0:06:08.839 year too, which didn't fully play out because the rates 0:06:08.880 --> 0:06:11.159 market backed up again. But now it's moving in the 0:06:11.200 --> 0:06:13.479 in the direction that we expected, meaning you know, the 0:06:13.600 --> 0:06:16.160 as the Fed moves towards actually tapering, which they're doing 0:06:16.160 --> 0:06:19.400 now and have to address these higher prices. I think 0:06:19.640 --> 0:06:22.080 we got kind of a you know, an interesting meeting 0:06:22.120 --> 0:06:24.960 this week when the when you know, Paul was renominated 0:06:25.000 --> 0:06:27.800 and and of course, uh, you know, BRAINERD was announced 0:06:27.800 --> 0:06:29.839 as the vice chair. You know, this FED is going 0:06:29.920 --> 0:06:32.920 to take probably a harder stance on what's going on inflation. 0:06:32.920 --> 0:06:34.640 They're gonna they want to show that they're they're not 0:06:34.839 --> 0:06:36.800 you know, falling asleep at the switch, and they're doing 0:06:36.839 --> 0:06:39.159 their job. And I think that's what the rates market 0:06:39.200 --> 0:06:41.560 is reacting to here. And that's in other words, our 0:06:41.640 --> 0:06:44.240 rates call is gonna end up being you know, rates higher, 0:06:44.480 --> 0:06:47.240 and that's a head wind for evaluations. And that's what's 0:06:47.240 --> 0:06:48.920 happened in the last three or four days. Is that 0:06:49.000 --> 0:06:50.120 the end of the world, as at the end of 0:06:50.120 --> 0:06:52.120 the bowl market. Of course not because the Arty story 0:06:52.160 --> 0:06:54.720 is still quite good. But you know, to have peak 0:06:54.839 --> 0:06:58.080 multiples on sort of you know, peak rate of change 0:06:58.520 --> 0:07:00.880 is unusual, and we just think it's taking a little 0:07:00.920 --> 0:07:02.560 bit longer than normal. We think it will happen in 0:07:02.560 --> 0:07:04.800 the first half next year. Multiples come down and then 0:07:04.800 --> 0:07:06.440 we move on our marry way. It's not like I said, 0:07:06.440 --> 0:07:07.919 it's not the end of the world, but we have 0:07:08.040 --> 0:07:11.360 to we have to deal with higher rates, tighter financial conditions, 0:07:11.400 --> 0:07:14.320 and that means lower multiples overall, and we'll to a 0:07:14.440 --> 0:07:16.520 large cap tech feel that of course, they will just 0:07:16.560 --> 0:07:18.880 like every other stock will what's so interesting about the 0:07:18.960 --> 0:07:22.000 range of forecasts for next year is the disagreement on 0:07:22.080 --> 0:07:25.200 the both the pace of the economic momentum as well 0:07:25.240 --> 0:07:27.840 as the read through into the market. The idea here 0:07:27.880 --> 0:07:29.880 that you do think that we're going to see a deceleration, 0:07:30.200 --> 0:07:32.400 but that the FED will still hike rates, and that 0:07:32.480 --> 0:07:35.680 that's still be viewed as a tightening cycle that will 0:07:35.720 --> 0:07:39.720 reduce valuations. How do you push back against TV securities 0:07:39.720 --> 0:07:42.440 call that that deceleration in growth will actually keep the 0:07:42.440 --> 0:07:45.240 FED on the sidelines and allow markets to continue to 0:07:45.280 --> 0:07:48.840 grind higher as they prepare for both very easy monetary 0:07:48.840 --> 0:07:52.960 conditions as well as a still robust economy. Well, like 0:07:53.040 --> 0:07:55.640 I mean our health call as well, we assume that 0:07:55.640 --> 0:07:57.320 the FED is going to move more slowly than the 0:07:57.360 --> 0:08:00.640 market on rate hikes. Okay, but the removal of asset 0:08:00.680 --> 0:08:03.520 purchases to you know, basically to zero over the next 0:08:03.560 --> 0:08:06.480 eight months, I think it's pretty naives it suggested that 0:08:06.560 --> 0:08:10.560 won't have some dampening effect on valuations. More importantly, Lisa, 0:08:10.600 --> 0:08:12.120 I mean, this is right in line with our mid 0:08:12.120 --> 0:08:14.800 cycle transition call. This is what it always works. So 0:08:15.320 --> 0:08:17.640 we've we've written about this for a while, I mean 0:08:17.800 --> 0:08:20.160 eight months talking about how this is very similar to 0:08:21.400 --> 0:08:25.480 two thousand four andleven. As the economy recovers, the FED 0:08:25.560 --> 0:08:27.560 is supposed to react to that. That's their job, and 0:08:27.560 --> 0:08:30.160 they're going to do their job, and that's the normal progression. 0:08:30.200 --> 0:08:33.360 You get the accelerative part of the recovery. That's great. 0:08:33.720 --> 0:08:36.560 Multiples actually expand at the same time. That's what we've had. 0:08:36.880 --> 0:08:40.840 And then as the FED removes policy accommodation, multiples come down. 0:08:40.960 --> 0:08:42.920 So you know, the think that that's not going to 0:08:43.000 --> 0:08:45.679 play out this cycle. I mean, we're going with the 0:08:45.720 --> 0:08:48.640 odds and that's and and I think that process has begun. 0:08:48.720 --> 0:08:51.760 It was somewhat interrupted in October. We saw evaluations actually 0:08:51.760 --> 0:08:55.040 expand again as rates came down. And also I think 0:08:55.360 --> 0:08:57.880 as you know, we saw the seasonal trade, and then 0:08:57.960 --> 0:09:00.400 once that seasonal trade is over, I think back on 0:09:00.480 --> 0:09:02.480 the path of just multiples coming down, and it could 0:09:02.480 --> 0:09:05.760 be a it could be a modest process. Isn't that 0:09:05.800 --> 0:09:07.840 to all happen at once? You know, we're talking about 0:09:07.920 --> 0:09:09.800 multiples coming down over the next twelve months, So if 0:09:09.800 --> 0:09:11.920 it's gradual, you know, the market will deal and it 0:09:12.160 --> 0:09:13.480 will be so it will be just be sort of 0:09:13.679 --> 0:09:16.320 a chop. I don't think it's gonna be a crash 0:09:16.400 --> 0:09:18.040 or anything like that. That's not what we're calling for 0:09:18.120 --> 0:09:20.960 work and and really the opportunity is going to be 0:09:20.960 --> 0:09:23.240 finding the right things to own within the equity market, 0:09:23.280 --> 0:09:24.920 something that we we spend a lot of time on. 0:09:25.280 --> 0:09:26.600 All Right, so what is it? What do you want 0:09:26.600 --> 0:09:29.600 to own? So right now we're very focused on earning, 0:09:29.640 --> 0:09:33.520 stability and valuation, not surprisingly, and one of the sectors 0:09:33.520 --> 0:09:36.679 that we think has those qualities you know right now 0:09:36.760 --> 0:09:39.559 is health care. Health Care is delivering delivering on the 0:09:39.600 --> 0:09:43.400 earnings quite nicely, and it's actually extremely cheap relative to 0:09:43.440 --> 0:09:46.719 its history. Uh, and that looks pretty attractive. Real estate 0:09:46.760 --> 0:09:48.920 blye or not reads look attractive in this kind of 0:09:48.920 --> 0:09:52.000 an environment. And we also think financials look good because 0:09:52.040 --> 0:09:53.960 you know, they should do better as race smooth higher 0:09:53.960 --> 0:09:55.840 and they're cheap. So those are three sectors who are 0:09:55.840 --> 0:09:58.360 recommending right now. Mike Wilson, thank you so much for 0:09:58.440 --> 0:10:01.160 joining us, particularly on this whole day Wednesday, Mike Wilson 0:10:01.160 --> 0:10:08.400 and Morgan Stanley. What is known is at the Royal 0:10:08.440 --> 0:10:12.360 Bank of Canada with a terrific research team including Thomas Porcelli, 0:10:12.880 --> 0:10:15.440 rights in Kings English. The only one who does not 0:10:15.960 --> 0:10:18.560 is Amy Wu Silverman. It's Greek to you, It's Greek 0:10:18.640 --> 0:10:21.040 to me and trusted, it's in the Greek letters of 0:10:21.040 --> 0:10:23.760 the derivative space as well. We're thrilled to Amy, we'll 0:10:23.760 --> 0:10:26.720 could join us uh this morning. Amy I, I look 0:10:26.760 --> 0:10:28.960 at where you are and I want you to dovetail 0:10:29.040 --> 0:10:33.520 it right into Lori Calvacina's constructive call on the market. 0:10:33.920 --> 0:10:36.880 When you look at skew, crtosis and the rest of 0:10:36.880 --> 0:10:40.440 the options dynamics, what does it mean for Lorie Calvacina, 0:10:40.800 --> 0:10:45.680 our listeners and viewers. Yeah, it's a great question. And 0:10:45.760 --> 0:10:48.320 you know, Lori and I talk a lot about you 0:10:48.320 --> 0:10:52.240 know what her O marching equities views look like in 0:10:52.400 --> 0:10:54.600 terms of the derivatives market, and I will tell you 0:10:55.080 --> 0:10:58.200 the I W M in flying volatility and skew. You 0:10:58.200 --> 0:11:00.800 know your favorite term. Tom has been dovetailing with what 0:11:00.880 --> 0:11:02.760 Laurie has been saying, which is that we will see 0:11:02.760 --> 0:11:06.800 a second leg up in that smid slash value section. 0:11:06.960 --> 0:11:09.120 And you see that in the derivatives market with a 0:11:09.200 --> 0:11:12.719 skew much more flat or bullish than you do in 0:11:12.880 --> 0:11:16.559 something like the large cap tech growth area. Amy I 0:11:16.600 --> 0:11:18.880 don't speak Greek, but I am looking at what could 0:11:18.880 --> 0:11:21.680 be potentially some froth being pushed out of the market 0:11:21.760 --> 0:11:25.520 in select areas. I'm thinking particular particularly of the software 0:11:25.559 --> 0:11:27.880 and internet stocks that were the Darling's. In the wake 0:11:28.000 --> 0:11:31.319 of the pandemic, we saw hedge funds really pile into 0:11:31.320 --> 0:11:34.040 those trades even as they climbed higher and higher. And 0:11:34.080 --> 0:11:36.640 now we're seeing the likes of Zoom and others really 0:11:36.679 --> 0:11:40.440 get punctured by reality, by the slowdown in their growth. 0:11:40.640 --> 0:11:44.320 How much is this indicative of broader froth that's being 0:11:44.559 --> 0:11:47.040 punched out of the market as people sort of realize 0:11:47.200 --> 0:11:49.840 that we're in a new territory with a FED perhaps 0:11:49.840 --> 0:11:54.720 as accommodative. Yeah, luckily soa you know, when you want froth, 0:11:54.800 --> 0:11:57.280 you've definitely come to the options market. You know, it's 0:11:57.320 --> 0:11:59.720 just been the home of momentum, of this kind of 0:12:00.200 --> 0:12:04.320 crazy retail call buying. Uh. You know, yesterday the options 0:12:04.400 --> 0:12:07.640 market woke up. In my opinion, we've been talking a 0:12:07.679 --> 0:12:11.840 long time about how that's kew in the queues was 0:12:11.880 --> 0:12:15.239 really not that expensive. People were really not focused on downside, 0:12:15.240 --> 0:12:18.560 despite you know what we know about rates ahead and 0:12:18.600 --> 0:12:22.640 that changed yesterday. We saw a pretty dramatic shift in hedging. 0:12:23.000 --> 0:12:25.120 We saw a lot of the conques both through year 0:12:25.200 --> 0:12:28.440 end and through next year, and that skew indicators starting 0:12:28.440 --> 0:12:31.360 to move. It's becoming more bearished, which really makes sense 0:12:31.360 --> 0:12:33.400 in the context of you know what we know Pal 0:12:33.480 --> 0:12:35.760 has to do in the coming year. Well, Amy, in 0:12:35.760 --> 0:12:37.960 a world where everything seems to be getting more expensive, 0:12:38.000 --> 0:12:39.920 is it going to keep getting more expensive to hedge? 0:12:41.880 --> 0:12:44.120 I think so, you know, and we've been kind of 0:12:44.160 --> 0:12:46.640 banging the drum for a while saying, look, it's been 0:12:46.679 --> 0:12:48.760 so cheap to hedge. Does anyone want to hedge? And 0:12:48.800 --> 0:12:51.480 you know, the answer has been no. And I always 0:12:51.480 --> 0:12:53.800 feel like, you know, people need to see a shoe 0:12:53.880 --> 0:12:56.120 to drop before they think about it. And of course, 0:12:56.160 --> 0:12:59.200 when that happens, your hedging is going to become more expensive. 0:12:59.240 --> 0:13:01.240 Your vix as prob we're going to cross that twenty 0:13:01.280 --> 0:13:04.079 psychological barrier. But that is when people are going to 0:13:04.160 --> 0:13:07.040 start looking at it. Yeah, okay, Well, if I'm looking 0:13:07.040 --> 0:13:09.240 to hedge while it's still more cheap, where do I 0:13:09.280 --> 0:13:13.200 do it? Amy? Yeah? You know one, uh, I I 0:13:13.240 --> 0:13:16.119 guess I call it like the dirty little secret of finances. 0:13:16.160 --> 0:13:19.200 People love to use I w M. QES and spy right, 0:13:19.240 --> 0:13:21.800 because that's what everyone else uses. That's what you benchmark two. 0:13:22.200 --> 0:13:25.480 But if you look to xcel C, the SMP Communications 0:13:25.520 --> 0:13:28.320 et F, it has about a nine percent correlation on 0:13:28.360 --> 0:13:31.920 a five year realized basis to NASSAC to the cues, 0:13:32.000 --> 0:13:33.600 and it has a lot of the same names. It 0:13:33.640 --> 0:13:36.680 has your Netflix, it has your Facebook, has your Twitter, 0:13:37.280 --> 0:13:39.440 and you know it could be an interesting one because 0:13:39.480 --> 0:13:43.040 that implied volatility level is very inexpensive on a relative 0:13:43.040 --> 0:13:45.400 basis compared to cues. But it's just as good as 0:13:45.400 --> 0:13:47.959 a tailhage if you see those growth head winds common 0:13:48.559 --> 0:13:52.760 any very quickly here. Unfortunately, what do the bears get wrong? 0:13:55.559 --> 0:13:59.439 I think there's, especially for derivatives people, there's this case 0:13:59.480 --> 0:14:02.240 to be made of what a tail looks cheap. You 0:14:02.320 --> 0:14:04.400 just feel like you have to own it, not necessarily 0:14:04.440 --> 0:14:06.800 because you think the probability is higher, Tom, but just 0:14:06.880 --> 0:14:09.320 because you know you're in a world when you think 0:14:09.320 --> 0:14:11.959 about things from the bang for the buck of that tail. 0:14:12.080 --> 0:14:13.920 I think that's what bears get wrong. When they see 0:14:13.920 --> 0:14:16.960 tales that cheap, they ask why is it that cheap? Um? 0:14:17.080 --> 0:14:19.720 And sometimes it's that cheap because things are good Amy, 0:14:19.800 --> 0:14:22.160 thank you so much. Jamie was Silverman there equity drew 0:14:22.200 --> 0:14:30.760 of his RBC, a capital market doctor and Say Joins, 0:14:30.840 --> 0:14:35.000 associate professor of emergency medicine at Johns Hopkins back to 0:14:35.160 --> 0:14:39.040 the chief executive officer of a major pharmaceutical company just 0:14:39.160 --> 0:14:44.040 stated that this is trending towards endemic, which basically to 0:14:44.160 --> 0:14:48.560 amateurs like me, says all clear. Are we all clear 0:14:48.800 --> 0:14:55.520 on COVID? Absolutely not all Claire, absolutely not an endemic. Okay, 0:14:55.560 --> 0:14:58.800 well that's a it's radio and TV back. You've got 0:14:58.800 --> 0:15:01.160 to give a longer answer, because I don't have two 0:15:01.160 --> 0:15:04.320 good questions. If it's not endemic, what is it? The 0:15:04.440 --> 0:15:07.400 leader of New Zealand came out overnight and said, you know, 0:15:07.480 --> 0:15:09.960 we still have a challenge here and a problem. We 0:15:10.000 --> 0:15:13.280 all know each and every story. How far are we 0:15:13.360 --> 0:15:16.440 from what the CEO of Astra Zeneca was talking about. 0:15:17.360 --> 0:15:19.560 So we're still in the midst of a pandemic, which 0:15:19.600 --> 0:15:23.560 means we still don't quite know how to overcome the 0:15:23.680 --> 0:15:27.240 current virgin or disease from the from the virus. UM. 0:15:27.280 --> 0:15:31.720 There's still daily deaths, still daily resource limitations. UM. We 0:15:31.800 --> 0:15:34.520 have some strategies that we know to be effective, such 0:15:34.520 --> 0:15:37.960 as social distancing, fascinating, but that has proven to be 0:15:38.120 --> 0:15:41.520 not enough. Also, the virus will continue to evolve UM. 0:15:41.560 --> 0:15:43.440 We don't know when that's going to happen. We've been 0:15:43.840 --> 0:15:46.160 very fortunate so far. It's been a couple of months 0:15:46.240 --> 0:15:49.280 since Delta much UM, but that's something to look out for. 0:15:49.840 --> 0:15:51.600 We am. I'm a little bit concerned as I looked 0:15:51.600 --> 0:15:54.400 the numbers dr An Sati. It looks like even in 0:15:54.520 --> 0:15:58.200 areas where there's high vaccination rates, you're seeing surges in 0:15:58.200 --> 0:16:00.760 the number of cases. I'm thinking of South Korea in particular, 0:16:01.080 --> 0:16:05.240 with seventy of the adult population with both shots of vaccine, 0:16:05.280 --> 0:16:07.960 and yet you're seeing the highest number of cases diagnosed 0:16:08.280 --> 0:16:10.840 going back since the start of the pandemic. Does this 0:16:11.040 --> 0:16:13.480 indicate that the vaccines are less effective than we thought 0:16:13.480 --> 0:16:16.800 they were? So? I don't think it indicates that the 0:16:16.880 --> 0:16:20.080 vaccines are less effective. Remember, testing is also going up. 0:16:20.120 --> 0:16:24.680 We're more likely to test routinely prior to big events UM, 0:16:24.720 --> 0:16:28.440 prior to going to work. In many situations, UM mortality 0:16:28.520 --> 0:16:32.720 hasn't gone up. Hospitalizations are lagging behind. The vaccines are 0:16:32.760 --> 0:16:37.200 definitely effective. I think human behavior plays a big part 0:16:37.280 --> 0:16:39.640 in this virus and what we're seeing in the North 0:16:39.680 --> 0:16:42.360 and the Midwest is that it is getting colder, people 0:16:42.360 --> 0:16:46.240 are going indoors, people are feeling more confident because they're vaccinating, 0:16:46.280 --> 0:16:49.200 Their behavior has changed, and all of that together is 0:16:49.280 --> 0:16:51.520 leading to these surges. How concerning is that for a 0:16:51.560 --> 0:16:53.960 place like Detroit, Michigan, where you can see that the 0:16:54.000 --> 0:16:57.280 percent of cases it's down about six hundred per a 0:16:57.360 --> 0:17:01.080 hundred thousand individuals getting diagnosed with COVID, you're seeing the 0:17:01.120 --> 0:17:04.520 people in the I c used about of them have 0:17:04.680 --> 0:17:07.680 not been vaccinated. How concerning is this that we're seeing 0:17:07.680 --> 0:17:10.959 the surge right ahead of the winter months, right ahead 0:17:11.080 --> 0:17:13.359 of Thanksgiving, right ahead of what everyone gets into a 0:17:13.400 --> 0:17:16.920 small room and breeze on each other. Absolutely, So the 0:17:17.000 --> 0:17:19.560 concern is that the number of cases is perhaps the 0:17:19.560 --> 0:17:22.480 tip of the iceberg, and which means that a large 0:17:22.560 --> 0:17:27.280 number of patients will still have asymptomatic infection with vaccinated individuals. 0:17:27.320 --> 0:17:30.120 That iceberg has gone from this to this, which means 0:17:30.119 --> 0:17:34.560 there's a higher proportion of asymptomatic individuals because people are 0:17:34.560 --> 0:17:36.879 not use a vaccine, you're not mounting the symptoms or 0:17:36.880 --> 0:17:40.600 getting us sick um. The challenges is that say, if 0:17:40.600 --> 0:17:43.120 you were to travel to Michigan for the holidays, then 0:17:43.720 --> 0:17:48.159 the airports, um staying at a hotel. There is all 0:17:48.200 --> 0:17:52.720 of these opportunities for getting sick. Dr Hernsanti, I feel 0:17:52.760 --> 0:17:55.320 like I've asked this question many times throughout the pandemic, 0:17:55.320 --> 0:17:57.960 and each time it's proven that in fact, there aren't 0:17:58.040 --> 0:18:00.360 enough people with natural immunity, or not an enough people 0:18:00.359 --> 0:18:03.000 who are vaccinated in order for the case curve to 0:18:03.240 --> 0:18:06.960 be prohibited from climbing dramatically upward. Are we getting closer 0:18:07.000 --> 0:18:10.600 though to that point, yes, I think Hostler just would 0:18:10.600 --> 0:18:13.000 have been much higher, given the fact that children are 0:18:13.040 --> 0:18:17.480 in schools, workers resumed as normal for many individuals, and 0:18:17.600 --> 0:18:21.600 people are traveling again, taking vacations again. I think if 0:18:21.720 --> 0:18:26.200 the vaccines some inherent immunity UM, we would have had 0:18:26.280 --> 0:18:28.680 much higher searches UM and would have been right where 0:18:28.680 --> 0:18:31.840 we were six months ago. Bacty, thank you so much, 0:18:31.840 --> 0:18:34.480 Blacky and Son. He greatly appreciate it. With Johns Hopkins, 0:18:39.200 --> 0:18:42.880 it's an annual visit and always pointed because no one 0:18:42.920 --> 0:18:46.639 has changed American travel in the last decade than Brian 0:18:46.760 --> 0:18:50.639 Kelly long agoing far away, Young James Gorman and Morgan 0:18:50.720 --> 0:18:53.879 Stanley would call up even younger Kelly and say, Brian 0:18:54.000 --> 0:18:56.960 fixed my computer and he went off and left Morgan 0:18:57.080 --> 0:19:01.320 Stanley and completely changed the travel business in this nation 0:19:01.840 --> 0:19:04.000 with the points guy. You all know the website, the 0:19:04.080 --> 0:19:06.959 forty seven charge cards. Just I'm pleased to tell you 0:19:07.080 --> 0:19:11.160 up in advance, Brian's going to Ecuador for forty seven 0:19:11.200 --> 0:19:14.560 cents here in a weekend. Well, his year world change, 0:19:14.640 --> 0:19:18.119 Brian because of the pitch battle and the credit card 0:19:18.160 --> 0:19:21.880 world between the traditional guys Clarina a firm and the rest. 0:19:22.200 --> 0:19:26.760 Is it business as usual for you this Thanksgiving holiday? Yeah? 0:19:26.840 --> 0:19:29.080 You know the Karna and A firm, those payment firms, 0:19:29.080 --> 0:19:32.080 they're not really impacting the customer that we're talking to, 0:19:32.320 --> 0:19:35.520 the high end travel consumer. You know what has impacted that. 0:19:35.640 --> 0:19:37.560 It used to just be Amex, and it was Amex 0:19:37.640 --> 0:19:40.119 and Chase. Now we're seeing Capital One just launched a 0:19:40.200 --> 0:19:43.240 venture X card to kind of combat that Sapphire reserve. 0:19:43.359 --> 0:19:46.679 So there's so much happening in that premium credit card space, 0:19:46.760 --> 0:19:49.320 and it's good for consumers because the bonuses are out 0:19:49.320 --> 0:19:51.480 of control and your free time. I want you to 0:19:51.480 --> 0:19:54.199 bring a seven forty seven back to British Air. But 0:19:54.320 --> 0:19:57.160 what I see Brian as we changed in the pandemic. 0:19:57.560 --> 0:20:01.320 Is the airlines are really going after the loyal customers. 0:20:01.560 --> 0:20:06.919 Will that sustain when this horrific pandemic is over? You know, 0:20:07.000 --> 0:20:09.800 I think you know, they extended loyalty, They've certainly been 0:20:09.880 --> 0:20:13.240 very friendly, you know, not expiring miles. But what they 0:20:13.280 --> 0:20:15.280 really need to change is the in flight product. I 0:20:15.359 --> 0:20:21.880 flew Barcelona to to Newark the other day, and there's yeah, 0:20:22.040 --> 0:20:23.880 I mean, I guess I couldn't shouldn't complain too much, 0:20:23.880 --> 0:20:25.680 but I can pay for tickets from time to time. 0:20:25.920 --> 0:20:28.120 But I do think that the airlines need those premium 0:20:28.160 --> 0:20:31.080 business travelers and they need to reinvest in their product. 0:20:31.160 --> 0:20:33.760 They can't just keep saying because of COVID, we can't 0:20:33.800 --> 0:20:36.399 give you anything but slop for a meal on a plane. 0:20:36.440 --> 0:20:39.320 So I do think they need to reinvest in service. Well, 0:20:39.359 --> 0:20:42.080 because of COVID is you know something you add to 0:20:42.160 --> 0:20:45.400 a lot of different sentences these days. Obviously, this holiday 0:20:45.440 --> 0:20:48.440 season of COVID times looks a lot different than last 0:20:48.480 --> 0:20:51.240 holiday season. Does. How is that playing out in terms 0:20:51.280 --> 0:20:55.240 of people's desire to travel? You know, I think the 0:20:55.320 --> 0:20:58.160