Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along
Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you
Speaker 1: insight from the best and economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg dot Com,
Speaker 1: and of course, on the Bloomberg Terminal. Marvin Lowe will
Speaker 1: be with us right now. He's Global macro strategists at
Speaker 1: State Street Global Markets. Kaylee lines, why don't you lead
Speaker 1: off with Mr? Lowe? Well, Marvin obviously is Lisa was
Speaker 1: saying that the market is looking for confirmation in this
Speaker 1: data of a more hawkish, more quickly moving federal reserve.
Speaker 1: Do you think the repricing of those expectations has been
Speaker 1: overblown given the numbers that we're seeing. You know what,
Speaker 1: today's data just confirms that we're moving in the right direction.
Speaker 1: Activity is accelerating to the fourth quarter. UM, that's no
Speaker 1: new news. There. There are hints that the job market
Speaker 1: is UM is pretty good in today's numbers. So it
Speaker 1: really does become that interplay between inflation and jobs. We
Speaker 1: know inflation is more than what they want. UM, if
Speaker 1: there are signs that if there are signs that the
Speaker 1: job market is going to heal itself faster than let's say,
Speaker 1: the second half of next year. Um, you know, rate
Speaker 1: hikes are gonna be live. But having said that, we're
Speaker 1: already pricing amid two and starting to think about May
Speaker 1: of two. So I don't see how much more we
Speaker 1: can get from an aggressive side of things. And because
Speaker 1: I'd probably like that it's getting the market to do
Speaker 1: the tightening for them before they actually have to get
Speaker 1: into the souper nuts there. When can we actually count
Speaker 1: on this data not being noisy? I mean, I'm looking
Speaker 1: right now at initial job with claims and form my data,
Speaker 1: and what it looks like is that this is the
Speaker 1: lowest claims figure going back in decades. This is what
Speaker 1: seems to be a hot market. And yet, as Michael
Speaker 1: McKee was saying, it could be noisy, it is holiday time.
Speaker 1: At what point can we say, no, this actually reflects reality?
Speaker 1: You know what I think about how this year has evolved.
Speaker 1: Where we started in the beginning of the year, and
Speaker 1: we said by the middle of the year we're gonna
Speaker 1: get clean data. Um, and then it was gonna be
Speaker 1: and then it was going to be in the fall
Speaker 1: and that hour at the fall, going into the winter.
Speaker 1: I think it's gonna take until the middle of next
Speaker 1: year before we get a real solid picture of what
Speaker 1: jobs looks like, what prices look like, how these supply
Speaker 1: shocks are are going to make their way out if
Speaker 1: it's gonna have to make some heart decisions based on
Speaker 1: data that's not perfect however, UM, but we've got a
Speaker 1: lot of moving parts, and that pricing data is really
Speaker 1: gonna be in flux. Remember that's beautifully said. In around
Speaker 1: all the different opinions we have on Blueberg surveillance, what
Speaker 1: we can say is consensus is ephemeral, to say the least,
Speaker 1: except we still have to invest. What is your investment
Speaker 1: stands given your ambivalence or your wait and see until
Speaker 1: fourth of July two thousand twenty two, We we we
Speaker 1: we do have to invest in, and we've got to
Speaker 1: look at what we think the world is gonna like,
Speaker 1: in which you know, ultimately companies and economies are going
Speaker 1: to uh to benefit from that. UM. I do think
Speaker 1: that the long end the curve is sending messages the
Speaker 1: fact that you know, whether it's a um A Greenspan
Speaker 1: type conundrum or a view that growth becomes dear against
Speaker 1: once we get to the other side of things is
Speaker 1: telling from me. So you know I continue to like
Speaker 1: um like the growth aspects of the U S economy. UM,
Speaker 1: I do think yields have remained contained and will remain contain.
Speaker 1: That means that growth is dear, income is dear um
Speaker 1: and globally you look for those environments that can benefit
Speaker 1: from that type of environment. Marvin Little, thank you so much.
Speaker 1: Too short to visit here with all this economic data
Speaker 1: with State Street today, greatly greatly appreciate that what we
Speaker 1: do is speak to experts, and Mike Wilson is uniquely
Speaker 1: qualified at Morgan Stanley to lead their equity coverage. He
Speaker 1: does so with some terrific securities analysis is at his
Speaker 1: back in economics of ellen Zner is well, Mike Wilson,
Speaker 1: I want to go to the wonderful Katie Huberty, who's
Speaker 1: looking at hardware in tech. And what Katie Huberty says
Speaker 1: to your cautious call on markets, would everybody calm down.
Speaker 1: Supply is gonna come back and we're gonna get back
Speaker 1: to some normal Why will stocks be quite essent if
Speaker 1: we get back to Katie Huberty is normal? Well, thanks
Speaker 1: time and happy Thanksgiving to everyone. Look, I think, well,
Speaker 1: Katie is actually very much in kind of our page. Frankly,
Speaker 1: she's very focused on you know, the you know, the
Speaker 1: supply channels are not going to rectify themselves quickly, and
Speaker 1: there's a chance that we've actually seen some overordering along
Speaker 1: the supply chain, particularly in tech hardware, which is her
Speaker 1: area of coverage, and and and so we're aligned. In fact,
Speaker 1: I would say Katie and I are more lined than
Speaker 1: I am with some of the other analysts at the
Speaker 1: Home Company, and that around this idea that we could
Speaker 1: have a paymack. As supply comes on, we might see
Speaker 1: some double orderings canceled and that may take a little
Speaker 1: time to digest. So we have I think the supply
Speaker 1: issue now that's pretty obvious. Inflation is the you know,
Speaker 1: the talk of the day in FETs reacting to that,
Speaker 1: and I think that's appropriate. However, there is a possibility
Speaker 1: that you know, we get into next year and a
Speaker 1: supply kind of picks up and we actually see demand curtailed,
Speaker 1: right because we did over consume a lot of things,
Speaker 1: and tech Harbard was one of those areas, and that's
Speaker 1: gonna take a little time to work through time, and
Speaker 1: that's one of the reasons why we think next year
Speaker 1: it's you know, at the index level, we've we've priced
Speaker 1: a lot of good news and it's probably gonna be
Speaker 1: more of a flatish year. Mike Wilson, David will David Wilson,
Speaker 1: no relation retiring from Bloomberg here in a bed. Just
Speaker 1: put up a spectacular Christopher on chart which shows Russell
Speaker 1: one thousand versus two thousand. And you know, the lack
Speaker 1: of breadth in this market is part of the Mike
Speaker 1: Wilson call that big tech will be crushed. Well the
Speaker 1: crush is a strong word, but I mean, look, our
Speaker 1: our big out of consensus call for next year is valuations.
Speaker 1: Then that was you know, someone of our call this
Speaker 1: year too, which didn't fully play out because the rates
Speaker 1: market backed up again. But now it's moving in the
Speaker 1: in the direction that we expected, meaning you know, the
Speaker 1: as the Fed moves towards actually tapering, which they're doing
Speaker 1: now and have to address these higher prices. I think
Speaker 1: we got kind of a you know, an interesting meeting
Speaker 1: this week when the when you know, Paul was renominated
Speaker 1: and and of course, uh, you know, BRAINERD was announced
Speaker 1: as the vice chair. You know, this FED is going
Speaker 1: to take probably a harder stance on what's going on inflation.
Speaker 1: They're gonna they want to show that they're they're not
Speaker 1: you know, falling asleep at the switch, and they're doing
Speaker 1: their job. And I think that's what the rates market
Speaker 1: is reacting to here. And that's in other words, our
Speaker 1: rates call is gonna end up being you know, rates higher,
Speaker 1: and that's a head wind for evaluations. And that's what's
Speaker 1: happened in the last three or four days. Is that
Speaker 1: the end of the world, as at the end of
Speaker 1: the bowl market. Of course not because the Arty story
Speaker 1: is still quite good. But you know, to have peak
Speaker 1: multiples on sort of you know, peak rate of change
Speaker 1: is unusual, and we just think it's taking a little
Speaker 1: bit longer than normal. We think it will happen in
Speaker 1: the first half next year. Multiples come down and then
Speaker 1: we move on our marry way. It's not like I said,
Speaker 1: it's not the end of the world, but we have
Speaker 1: to we have to deal with higher rates, tighter financial conditions,
Speaker 1: and that means lower multiples overall, and we'll to a
Speaker 1: large cap tech feel that of course, they will just
Speaker 1: like every other stock will what's so interesting about the
Speaker 1: range of forecasts for next year is the disagreement on
Speaker 1: the both the pace of the economic momentum as well
Speaker 1: as the read through into the market. The idea here
Speaker 1: that you do think that we're going to see a deceleration,
Speaker 1: but that the FED will still hike rates, and that
Speaker 1: that's still be viewed as a tightening cycle that will
Speaker 1: reduce valuations. How do you push back against TV securities
Speaker 1: call that that deceleration in growth will actually keep the
Speaker 1: FED on the sidelines and allow markets to continue to
Speaker 1: grind higher as they prepare for both very easy monetary
Speaker 1: conditions as well as a still robust economy. Well, like
Speaker 1: I mean our health call as well, we assume that
Speaker 1: the FED is going to move more slowly than the
Speaker 1: market on rate hikes. Okay, but the removal of asset
Speaker 1: purchases to you know, basically to zero over the next
Speaker 1: eight months, I think it's pretty naives it suggested that
Speaker 1: won't have some dampening effect on valuations. More importantly, Lisa,
Speaker 1: I mean, this is right in line with our mid
Speaker 1: cycle transition call. This is what it always works. So
Speaker 1: we've we've written about this for a while, I mean
Speaker 1: eight months talking about how this is very similar to
Speaker 1: two thousand four andleven. As the economy recovers, the FED
Speaker 1: is supposed to react to that. That's their job, and
Speaker 1: they're going to do their job, and that's the normal progression.
Speaker 1: You get the accelerative part of the recovery. That's great.
Speaker 1: Multiples actually expand at the same time. That's what we've had.
Speaker 1: And then as the FED removes policy accommodation, multiples come down.
Speaker 1: So you know, the think that that's not going to
Speaker 1: play out this cycle. I mean, we're going with the
Speaker 1: odds and that's and and I think that process has begun.
Speaker 1: It was somewhat interrupted in October. We saw evaluations actually
Speaker 1: expand again as rates came down. And also I think
Speaker 1: as you know, we saw the seasonal trade, and then
Speaker 1: once that seasonal trade is over, I think back on
Speaker 1: the path of just multiples coming down, and it could
Speaker 1: be a it could be a modest process. Isn't that
Speaker 1: to all happen at once? You know, we're talking about
Speaker 1: multiples coming down over the next twelve months, So if
Speaker 1: it's gradual, you know, the market will deal and it
Speaker 1: will be so it will be just be sort of
Speaker 1: a chop. I don't think it's gonna be a crash
Speaker 1: or anything like that. That's not what we're calling for
Speaker 1: work and and really the opportunity is going to be
Speaker 1: finding the right things to own within the equity market,
Speaker 1: something that we we spend a lot of time on.
Speaker 1: All Right, so what is it? What do you want
Speaker 1: to own? So right now we're very focused on earning,
Speaker 1: stability and valuation, not surprisingly, and one of the sectors
Speaker 1: that we think has those qualities you know right now
Speaker 1: is health care. Health Care is delivering delivering on the
Speaker 1: earnings quite nicely, and it's actually extremely cheap relative to
Speaker 1: its history. Uh, and that looks pretty attractive. Real estate
Speaker 1: blye or not reads look attractive in this kind of
Speaker 1: an environment. And we also think financials look good because
Speaker 1: you know, they should do better as race smooth higher
Speaker 1: and they're cheap. So those are three sectors who are
Speaker 1: recommending right now. Mike Wilson, thank you so much for
Speaker 1: joining us, particularly on this whole day Wednesday, Mike Wilson
Speaker 1: and Morgan Stanley. What is known is at the Royal
Speaker 1: Bank of Canada with a terrific research team including Thomas Porcelli,
Speaker 1: rights in Kings English. The only one who does not
Speaker 1: is Amy Wu Silverman. It's Greek to you, It's Greek
Speaker 1: to me and trusted, it's in the Greek letters of
Speaker 1: the derivative space as well. We're thrilled to Amy, we'll
Speaker 1: could join us uh this morning. Amy I, I look
Speaker 1: at where you are and I want you to dovetail
Speaker 1: it right into Lori Calvacina's constructive call on the market.
Speaker 1: When you look at skew, crtosis and the rest of
Speaker 1: the options dynamics, what does it mean for Lorie Calvacina,
Speaker 1: our listeners and viewers. Yeah, it's a great question. And
Speaker 1: you know, Lori and I talk a lot about you
Speaker 1: know what her O marching equities views look like in
Speaker 1: terms of the derivatives market, and I will tell you
Speaker 1: the I W M in flying volatility and skew. You
Speaker 1: know your favorite term. Tom has been dovetailing with what
Speaker 1: Laurie has been saying, which is that we will see
Speaker 1: a second leg up in that smid slash value section.
Speaker 1: And you see that in the derivatives market with a
Speaker 1: skew much more flat or bullish than you do in
Speaker 1: something like the large cap tech growth area. Amy I
Speaker 1: don't speak Greek, but I am looking at what could
Speaker 1: be potentially some froth being pushed out of the market
Speaker 1: in select areas. I'm thinking particular particularly of the software
Speaker 1: and internet stocks that were the Darling's. In the wake
Speaker 1: of the pandemic, we saw hedge funds really pile into
Speaker 1: those trades even as they climbed higher and higher. And
Speaker 1: now we're seeing the likes of Zoom and others really
Speaker 1: get punctured by reality, by the slowdown in their growth.
Speaker 1: How much is this indicative of broader froth that's being
Speaker 1: punched out of the market as people sort of realize
Speaker 1: that we're in a new territory with a FED perhaps
Speaker 1: as accommodative. Yeah, luckily soa you know, when you want froth,
Speaker 1: you've definitely come to the options market. You know, it's
Speaker 1: just been the home of momentum, of this kind of
Speaker 1: crazy retail call buying. Uh. You know, yesterday the options
Speaker 1: market woke up. In my opinion, we've been talking a
Speaker 1: long time about how that's kew in the queues was
Speaker 1: really not that expensive. People were really not focused on downside,
Speaker 1: despite you know what we know about rates ahead and
Speaker 1: that changed yesterday. We saw a pretty dramatic shift in hedging.
Speaker 1: We saw a lot of the conques both through year
Speaker 1: end and through next year, and that skew indicators starting
Speaker 1: to move. It's becoming more bearished, which really makes sense
Speaker 1: in the context of you know what we know Pal
Speaker 1: has to do in the coming year. Well, Amy, in
Speaker 1: a world where everything seems to be getting more expensive,
Speaker 1: is it going to keep getting more expensive to hedge?
Speaker 1: I think so, you know, and we've been kind of
Speaker 1: banging the drum for a while saying, look, it's been
Speaker 1: so cheap to hedge. Does anyone want to hedge? And
Speaker 1: you know, the answer has been no. And I always
Speaker 1: feel like, you know, people need to see a shoe
Speaker 1: to drop before they think about it. And of course,
Speaker 1: when that happens, your hedging is going to become more expensive.
Speaker 1: Your vix as prob we're going to cross that twenty
Speaker 1: psychological barrier. But that is when people are going to
Speaker 1: start looking at it. Yeah, okay, Well, if I'm looking
Speaker 1: to hedge while it's still more cheap, where do I
Speaker 1: do it? Amy? Yeah? You know one, uh, I I
Speaker 1: guess I call it like the dirty little secret of finances.
Speaker 1: People love to use I w M. QES and spy right,
Speaker 1: because that's what everyone else uses. That's what you benchmark two.
Speaker 1: But if you look to xcel C, the SMP Communications
Speaker 1: et F, it has about a nine percent correlation on
Speaker 1: a five year realized basis to NASSAC to the cues,
Speaker 1: and it has a lot of the same names. It
Speaker 1: has your Netflix, it has your Facebook, has your Twitter,
Speaker 1: and you know it could be an interesting one because
Speaker 1: that implied volatility level is very inexpensive on a relative
Speaker 1: basis compared to cues. But it's just as good as
Speaker 1: a tailhage if you see those growth head winds common
Speaker 1: any very quickly here. Unfortunately, what do the bears get wrong?
Speaker 1: I think there's, especially for derivatives people, there's this case
Speaker 1: to be made of what a tail looks cheap. You
Speaker 1: just feel like you have to own it, not necessarily
Speaker 1: because you think the probability is higher, Tom, but just
Speaker 1: because you know you're in a world when you think
Speaker 1: about things from the bang for the buck of that tail.
Speaker 1: I think that's what bears get wrong. When they see
Speaker 1: tales that cheap, they ask why is it that cheap? Um?
Speaker 1: And sometimes it's that cheap because things are good Amy,
Speaker 1: thank you so much. Jamie was Silverman there equity drew
Speaker 1: of his RBC, a capital market doctor and Say Joins,
Speaker 1: associate professor of emergency medicine at Johns Hopkins back to
Speaker 1: the chief executive officer of a major pharmaceutical company just
Speaker 1: stated that this is trending towards endemic, which basically to
Speaker 1: amateurs like me, says all clear. Are we all clear
Speaker 1: on COVID? Absolutely not all Claire, absolutely not an endemic. Okay,
Speaker 1: well that's a it's radio and TV back. You've got
Speaker 1: to give a longer answer, because I don't have two
Speaker 1: good questions. If it's not endemic, what is it? The
Speaker 1: leader of New Zealand came out overnight and said, you know,
Speaker 1: we still have a challenge here and a problem. We
Speaker 1: all know each and every story. How far are we
Speaker 1: from what the CEO of Astra Zeneca was talking about.
Speaker 1: So we're still in the midst of a pandemic, which
Speaker 1: means we still don't quite know how to overcome the
Speaker 1: current virgin or disease from the from the virus. UM.
Speaker 1: There's still daily deaths, still daily resource limitations. UM. We
Speaker 1: have some strategies that we know to be effective, such
Speaker 1: as social distancing, fascinating, but that has proven to be
Speaker 1: not enough. Also, the virus will continue to evolve UM.
Speaker 1: We don't know when that's going to happen. We've been
Speaker 1: very fortunate so far. It's been a couple of months
Speaker 1: since Delta much UM, but that's something to look out for.
Speaker 1: We am. I'm a little bit concerned as I looked
Speaker 1: the numbers dr An Sati. It looks like even in
Speaker 1: areas where there's high vaccination rates, you're seeing surges in
Speaker 1: the number of cases. I'm thinking of South Korea in particular,
Speaker 1: with seventy of the adult population with both shots of vaccine,
Speaker 1: and yet you're seeing the highest number of cases diagnosed
Speaker 1: going back since the start of the pandemic. Does this
Speaker 1: indicate that the vaccines are less effective than we thought
Speaker 1: they were? So? I don't think it indicates that the
Speaker 1: vaccines are less effective. Remember, testing is also going up.
Speaker 1: We're more likely to test routinely prior to big events UM,
Speaker 1: prior to going to work. In many situations, UM mortality
Speaker 1: hasn't gone up. Hospitalizations are lagging behind. The vaccines are
Speaker 1: definitely effective. I think human behavior plays a big part
Speaker 1: in this virus and what we're seeing in the North
Speaker 1: and the Midwest is that it is getting colder, people
Speaker 1: are going indoors, people are feeling more confident because they're vaccinating,
Speaker 1: Their behavior has changed, and all of that together is
Speaker 1: leading to these surges. How concerning is that for a
Speaker 1: place like Detroit, Michigan, where you can see that the
Speaker 1: percent of cases it's down about six hundred per a
Speaker 1: hundred thousand individuals getting diagnosed with COVID, you're seeing the
Speaker 1: people in the I c used about of them have
Speaker 1: not been vaccinated. How concerning is this that we're seeing
Speaker 1: the surge right ahead of the winter months, right ahead
Speaker 1: of Thanksgiving, right ahead of what everyone gets into a
Speaker 1: small room and breeze on each other. Absolutely, So the
Speaker 1: concern is that the number of cases is perhaps the
Speaker 1: tip of the iceberg, and which means that a large
Speaker 1: number of patients will still have asymptomatic infection with vaccinated individuals.
Speaker 1: That iceberg has gone from this to this, which means
Speaker 1: there's a higher proportion of asymptomatic individuals because people are
Speaker 1: not use a vaccine, you're not mounting the symptoms or
Speaker 1: getting us sick um. The challenges is that say, if
Speaker 1: you were to travel to Michigan for the holidays, then
Speaker 1: the airports, um staying at a hotel. There is all
Speaker 1: of these opportunities for getting sick. Dr Hernsanti, I feel
Speaker 1: like I've asked this question many times throughout the pandemic,
Speaker 1: and each time it's proven that in fact, there aren't
Speaker 1: enough people with natural immunity, or not an enough people
Speaker 1: who are vaccinated in order for the case curve to
Speaker 1: be prohibited from climbing dramatically upward. Are we getting closer
Speaker 1: though to that point, yes, I think Hostler just would
Speaker 1: have been much higher, given the fact that children are
Speaker 1: in schools, workers resumed as normal for many individuals, and
Speaker 1: people are traveling again, taking vacations again. I think if
Speaker 1: the vaccines some inherent immunity UM, we would have had
Speaker 1: much higher searches UM and would have been right where
Speaker 1: we were six months ago. Bacty, thank you so much,
Speaker 1: Blacky and Son. He greatly appreciate it. With Johns Hopkins,
Speaker 1: it's an annual visit and always pointed because no one
Speaker 1: has changed American travel in the last decade than Brian
Speaker 1: Kelly long agoing far away, Young James Gorman and Morgan
Speaker 1: Stanley would call up even younger Kelly and say, Brian
Speaker 1: fixed my computer and he went off and left Morgan
Speaker 1: Stanley and completely changed the travel business in this nation
Speaker 1: with the points guy. You all know the website, the
Speaker 1: forty seven charge cards. Just I'm pleased to tell you
Speaker 1: up in advance, Brian's going to Ecuador for forty seven
Speaker 1: cents here in a weekend. Well, his year world change,
Speaker 1: Brian because of the pitch battle and the credit card
Speaker 1: world between the traditional guys Clarina a firm and the rest.
Speaker 1: Is it business as usual for you this Thanksgiving holiday? Yeah?
Speaker 1: You know the Karna and A firm, those payment firms,
Speaker 1: they're not really impacting the customer that we're talking to,
Speaker 1: the high end travel consumer. You know what has impacted that.
Speaker 1: It used to just be Amex, and it was Amex
Speaker 1: and Chase. Now we're seeing Capital One just launched a
Speaker 1: venture X card to kind of combat that Sapphire reserve.
Speaker 1: So there's so much happening in that premium credit card space,
Speaker 1: and it's good for consumers because the bonuses are out
Speaker 1: of control and your free time. I want you to
Speaker 1: bring a seven forty seven back to British Air. But
Speaker 1: what I see Brian as we changed in the pandemic.
Speaker 1: Is the airlines are really going after the loyal customers.
Speaker 1: Will that sustain when this horrific pandemic is over? You know,
Speaker 1: I think you know, they extended loyalty, They've certainly been
Speaker 1: very friendly, you know, not expiring miles. But what they
Speaker 1: really need to change is the in flight product. I
Speaker 1: flew Barcelona to to Newark the other day, and there's yeah,
Speaker 1: I mean, I guess I couldn't shouldn't complain too much,
Speaker 1: but I can pay for tickets from time to time.
Speaker 1: But I do think that the airlines need those premium
Speaker 1: business travelers and they need to reinvest in their product.
Speaker 1: They can't just keep saying because of COVID, we can't
Speaker 1: give you anything but slop for a meal on a plane.
Speaker 1: So I do think they need to reinvest in service. Well,
Speaker 1: because of COVID is you know something you add to
Speaker 1: a lot of different sentences these days. Obviously, this holiday
Speaker 1: season of COVID times looks a lot different than last
Speaker 1: holiday season. Does. How is that playing out in terms
Speaker 1: of people's desire to travel? You know, I think the
Speaker 1: system is fragile, to say the least. We've seen meltdowns
Speaker 1: from Southwest in American air lines. But luckily, so far
Speaker 1: this week things are good, you know, no major storm issues.
Speaker 1: People are traveling in record numbers, more than twice as
Speaker 1: many that as last year. People are excited to travel again.
Speaker 1: And you know, we just heard this morning New Zealand
Speaker 1: is going to open up in April after nearly two
Speaker 1: years or more than two years, actually being blocked. So
Speaker 1: I think travel is going to continue increasing. We're gonna
Speaker 1: see these surges, you know that we're seeing now. But
Speaker 1: you know, I think for the vaccinated traveler there's gonna
Speaker 1: be more options than ever. And I think consumers are
Speaker 1: ready to get back on the road. Brian, we talked
Speaker 1: a lot about the high consumer savings rate because people,
Speaker 1: you know, got a lot of stimulus because of the pandemic.
Speaker 1: They saved a lot of money, they just weren't spending it.
Speaker 1: Do people just have like a vast trove of points
Speaker 1: ready to deploy or have they already started deploying it? No, absolutely,
Speaker 1: there are so many points. It's it's hard to tell
Speaker 1: because the banks don't report how many outstanding points they
Speaker 1: have exactly, but there's a huge amount, and you know,
Speaker 1: the banks are actually now allowing you to use those
Speaker 1: points for non travel use apple products. Yeah. Yeah, this
Speaker 1: this day, you can get away luggage using your Chase points.
Speaker 1: So they're trying more and more ways for people to
Speaker 1: use them since they're not traveling as much as they
Speaker 1: were in the past. Um. But I think what we're
Speaker 1: seeing too is that people are traveling longer and they're
Speaker 1: spending more on travel, especially because they can work from
Speaker 1: abroad now, so a lot of people are spending a
Speaker 1: couple of weeks working and traveling abroad. So that's the
Speaker 1: key trend that I think it's going to be a
Speaker 1: boon for the travel industry. They're gonna see longer and
Speaker 1: more expensive stays and flights, you know, as travel continues
Speaker 1: to recover. Brian Mr Capiano, Marriott and Marriott bo Envoy
Speaker 1: Dark in the Door recently enjoying the show. And you know,
Speaker 1: the hotel people have been through an absolute nightmare. What
Speaker 1: is the distinction between airline the points guy cards in
Speaker 1: a hotel the points Guys cards? You know, the hotel
Speaker 1: cards have gotten really good and that you get so
Speaker 1: many perks. You know, for a card, you get a
Speaker 1: free night at a hotel. It's very easy to get
Speaker 1: value back on those hotel branding cards. I think where
Speaker 1: consumers are frustrating with hotels in general is that because
Speaker 1: of COVID, we can't offer you all of these services
Speaker 1: we're going to charge you. Some hotels charge a hundred
Speaker 1: fifty dollars just on a resort fee. You know, we
Speaker 1: on some of the luxury hotels, which is blowney considering
Speaker 1: you don't get half of those services. So I think
Speaker 1: what the hotels industry is gonna have to reconcile is
Speaker 1: with the staffing issues they're having. You know, rates are
Speaker 1: up there, making money, but consumers are getting more and
Speaker 1: more agitated with paying for bowl service and not getting it.
Speaker 1: And that's why Airbnb has seen huge increases over the
Speaker 1: pandemic well in terms of agitation for paying more. Brian,
Speaker 1: I have the Chase Sapphire Reserve card and I get
Speaker 1: a lot out of it, don't get me wrong, but
Speaker 1: I also have to pay more for it. It seems
Speaker 1: every year it gets more expensive to have that credit card.
Speaker 1: Is that the trend that as you see more of
Speaker 1: these card companies competing with each other in those types
Speaker 1: of cards, it's just going to get more and more
Speaker 1: expensive to have it absolutely, But you know, American Express
Speaker 1: Platinum raised its rates, but they reported amazing success with it.
Speaker 1: You know, consumers do want to feel like they're part
Speaker 1: of something that they get a lot of value out
Speaker 1: of um. So you know, emium credit cards aren't going
Speaker 1: away anytime soon. Even that new Capital one card, the
Speaker 1: venture xcept launch that has a pretty hepthy feed. But
Speaker 1: it's so easy. I urge people don't get a no
Speaker 1: fee card just because there's no fee. As my dad said,
Speaker 1: cheap as expensive. There's no fee cards. You're a good consumer,
Speaker 1: You're not mean. You can easily get way more value
Speaker 1: back by getting a card with the annual fee. You
Speaker 1: just got to do the math. Brian, I'm not going
Speaker 1: to mince words. You change my life. Until you came along,
Speaker 1: I was looking at you know, fancy pants business class
Speaker 1: travel and you know, frankly, folks, if you just do
Speaker 1: what Kelly says, it actually works for the new year
Speaker 1: for our listeners and viewers. What's the number one way
Speaker 1: to affect cheaper travel? Well, the number one thing is,
Speaker 1: you know, collect your points and and understand how many
Speaker 1: points you have. You know, we just long points guy
Speaker 1: app where you can track all of your loyalty points
Speaker 1: in one place will even give you your net worth
Speaker 1: in points. And I think people don't realize how much
Speaker 1: value they have sitting around in these loyalty points. And
Speaker 1: my number one tip is use them. Uh you know,
Speaker 1: the airlines let you change your if you use it
Speaker 1: freaking fire miles, you can. You have more flexibility than
Speaker 1: if you buy a paid ticket. So use your miles
Speaker 1: and point. Did you once fly from New York, New
Speaker 1: York JFK to Heathrow and they paid you to take
Speaker 1: the trip? Did you actually do that? No? I mean
Speaker 1: so I will always you know, even when I use miles, uh,
Speaker 1: you know there, I always have to pay taxes and
Speaker 1: fees and at the points guy, we don't take free
Speaker 1: you from the airlines. We we we pay, but you
Speaker 1: know we don't definitely get a good deal when I travel.
Speaker 1: I'm shocked. Bryan Kelly, thank you so much with the
Speaker 1: points guys, truly, all the Internet and dot com people,
Speaker 1: He's changed our lives more than any This is the
Speaker 1: Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays
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