Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanibek. We're here every day bringing
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Speaker 1: radio show at two pm Eastern Time on Bloomberg Radio
Speaker 1: or watch us on YouTube search Bloomberg Global News. During
Speaker 1: a White House COVID nine Team Response Team briefing earlier today,
Speaker 1: CDC Director Rochelle will Lyndsky explained why Americans need to
Speaker 1: remain vigilant in fighting the virus check it out. This
Speaker 1: is a critical moment in our fight against the pandemic.
Speaker 1: As we see increases in cases, we can't afford to
Speaker 1: let our guard down. We are so close, so very
Speaker 1: close to getting back to the everyday activities we all
Speaker 1: miss so much. And that, of course, was ADC Director
Speaker 1: Rochelle will Lanski earlier today. This as there's many virus
Speaker 1: and vaccine headlines again, and we just had one just
Speaker 1: a few minutes ago, crossing the Bloomberg France starting a
Speaker 1: four week nationwide lockdown on Saturday. That is coming from
Speaker 1: their leader at Emmanuel mccrowna. And of course just a
Speaker 1: reminder that there's parts of the world that are still
Speaker 1: seeing um the numbers really troubling. Yeah, despite the progress
Speaker 1: that we've made here in the United States, much of
Speaker 1: the world remains unvaccinated. Dr Ian LUs Bader is clinical
Speaker 1: Associate Professor of medicine at n y U Lanego in
Speaker 1: a medical center, joining us now on the phone from
Speaker 1: New York City. Dr LUs Bader, it it's always great
Speaker 1: when you join us. Thank you so much for taking
Speaker 1: the time. Let's get right into it and talk about
Speaker 1: what's happening in Europe, as we just learned from Carol
Speaker 1: France starting a four week nationwide lockdown on Saturday. The
Speaker 1: big question I have is is this the direction that
Speaker 1: that we're going in here, considering we're starting to see
Speaker 1: cases creep up as well? I don't think so. And
Speaker 1: Happy Wednesday, Tim and call hopeball as well. Definitely, there's
Speaker 1: a number of countries around the world that are seeing
Speaker 1: a rise. Fortunately we're not seeing a big rise in
Speaker 1: the United States, but and we've done fairly well. A
Speaker 1: lot further to go in terms of vaccinations, but frances
Speaker 1: uh in a bit of trouble, Poland, part of the UK,
Speaker 1: and certainly other countries like Brazil, even Mexico. So we're
Speaker 1: seeing a number of areas and I think they will
Speaker 1: relate to probably one of three or four different reasons.
Speaker 1: One is vaccine availability. We've been fairly fortunate here that
Speaker 1: we've purchased a large number of different vaccines. They're all
Speaker 1: fairly effective, and I think the availability now is even greater.
Speaker 1: So I think we've had that many countries in Europe
Speaker 1: have been either hesitant to take vaccines, and some of
Speaker 1: them relate to I'll take this vaccine, but not that
Speaker 1: you know, another vaccine there is suspicious about astra Zeneca
Speaker 1: or gsk or or fiser has a preference. So um
Speaker 1: part of it is um, the availability of it is
Speaker 1: vaccine hesitancy. Part of it as a lifestyle if there
Speaker 1: are more social country and they're not really following barriers
Speaker 1: six ft and so forth, if they're more social. But
Speaker 1: also some new strains that be one one, seven has
Speaker 1: a higher transmissibility. So if you're dealing with um a
Speaker 1: population that has not had a lot of vaccine, and
Speaker 1: you've got a variant that is more transmissible, in other words,
Speaker 1: one person can infect instead of two or three, potentially
Speaker 1: four or five or six people, then you're going to
Speaker 1: have many more problems. So mm hmmm, are we likely
Speaker 1: to have a fourth wave because of people who might
Speaker 1: not be taking the vaccine, are putting it off, and
Speaker 1: because we're seeing a COVID nineteen strain that as it mutates,
Speaker 1: are very As we see the variants and they're higher,
Speaker 1: as you said, a higher transmissibility, are we likely then
Speaker 1: to have a fourth wave? Well, I think that's what
Speaker 1: the authorities are worried about, and I we could do
Speaker 1: a better job at addressing people's vaccine hesitancy. There are
Speaker 1: people who who are concerned about taking it. There are
Speaker 1: a lot of rumors unfortunately on social media and on
Speaker 1: the internet that are really misinforming people. And I don't
Speaker 1: think it's enough to say we have to keep our
Speaker 1: guard up and we have to you know, get everyone vaccinated.
Speaker 1: I think we need to directly address some of the
Speaker 1: concerns in terms of safety. Uh, and in terms, we
Speaker 1: just had FISER data that showed very high efficacy in
Speaker 1: kids twelve to fifteen. I think we need to broaden
Speaker 1: our availability and really kind of address populations that are concerned,
Speaker 1: why they're concerned, and can we have the experts UH
Speaker 1: from the CDC or other infectious disease specialists kind of
Speaker 1: really spell out what people are worried about and why
Speaker 1: those concerns really are not so valid? Dr Spader? Are
Speaker 1: we still seeing people change their thoughts around getting the
Speaker 1: vaccine in the sense of what we saw early on
Speaker 1: December January, especially with with with healthcare workers. Maybe they
Speaker 1: were hesitant, but then people inside their social circles insteade,
Speaker 1: their families started getting the vaccine their friends, and then
Speaker 1: that sort of change the way that they thought about it.
Speaker 1: Is that still happening very much so when I think
Speaker 1: you've hit on a very important point, which is people
Speaker 1: need to share with others that they've had the vaccine,
Speaker 1: that they did well with it. There are always some
Speaker 1: mild side effects. I think some people are concerned about,
Speaker 1: you know, potentially longer term UH side effects which were
Speaker 1: really not seeing um or this report about clots and
Speaker 1: so forth, which really didn't pan out either. And I
Speaker 1: think the best way to reduce vaccine hesitancy is to
Speaker 1: have people in a peer group socioeconomic group, your friends
Speaker 1: basically say hey, I did fine, you should get it
Speaker 1: as well. Uh, And we're not seeing that as much
Speaker 1: as we should. We talked about the Fiser vaccine it
Speaker 1: protection for kids ages twelve to fifteen. That was in
Speaker 1: a study that the company released the data for early
Speaker 1: this morning. Dr LUs better. It doesn't get any better
Speaker 1: than right, yes, really encouraging data and in order to
Speaker 1: really reach herd immunity, which unfortunately is the only reasonable
Speaker 1: way we're going to end the pandemic. I know many
Speaker 1: people talk about therapeutics and so forth, but really having
Speaker 1: to have people get the infection and then treat them
Speaker 1: is is a very cumbersome way. So vaccines really are
Speaker 1: the key. And having a efficacy in this young population
Speaker 1: that is certainly exposed to in social settings and so forth,
Speaker 1: um and can harbor the virus who have a little
Speaker 1: less symptoms. Sometimes this really is key data and hopefully
Speaker 1: we'll reassure people in terms of safety, certainly efficacy, and
Speaker 1: I think we need to ramp this up and and
Speaker 1: ultimately distry rebut it that's really the key thing is
Speaker 1: getting the vaccine eligibility for really more people and ultimately
Speaker 1: younger people is the way to to move forward. Hey
Speaker 1: speaking a key data research also, I think it was
Speaker 1: out just this week to uh, there's a study. It's
Speaker 1: kind of a growing part of evidence suggesting that the vaccines,
Speaker 1: these are the vaccines by maderna advisor, not only reduce
Speaker 1: the risk of getting seriously ill with covedanteam, but can
Speaker 1: prevent catching the virus in the first place. In other words,
Speaker 1: I we can't be hosts even if we're vaccinated. That's
Speaker 1: also key. I agree with you completely. You know, many
Speaker 1: people are concerned or one of the excuses for vaccine
Speaker 1: hesitancy is saying, look, even if I get the vaccine,
Speaker 1: I could still harbored in my nasal firings and transmitted
Speaker 1: And that never really made much sense to me, because
Speaker 1: once you have antibodies, it's much less likely. Of course,
Speaker 1: you've got blood flow in antibodies in your in your
Speaker 1: nose and nas of fairings. So you know, there's probably
Speaker 1: a few people who may have that, you know with
Speaker 1: studies where they swab you after a vaccine. But the
Speaker 1: evidence to me is building greater and greater that the
Speaker 1: vaccines will really make a big difference also in decreasing
Speaker 1: transmission and acquisition of getting it. But yet, for example,
Speaker 1: we have about twenty five hundred people in the US
Speaker 1: that have had a vaccine about we're growing about thirty
Speaker 1: three out of a hundred in the UK, but only
Speaker 1: about eight out of a hundred, only about eight percent
Speaker 1: in Europe, which I think is why we're seeing this
Speaker 1: rise in cases. Well, we're seeing the rising cases here.
Speaker 1: We have to address that. Well, I want to talk
Speaker 1: about that a little bit because in the United Kingdom,
Speaker 1: where the vaccination campaign is a few weeks even a
Speaker 1: month ahead of where we are in the United States, um,
Speaker 1: Israel significantly ahead of the United States as well, cases
Speaker 1: and deaths have really really dropped. When does that happen here? Like,
Speaker 1: what do we know about the inflection point that happened
Speaker 1: in those countries and when that starts to happen in
Speaker 1: the US. Well, the numbers in Israel are are certainly encouraging,
Speaker 1: are closer to like seventy percent of the population or
Speaker 1: seventy eight out of a hundred. So that's really when
Speaker 1: you have heard immunity, and and and the numbers show
Speaker 1: that it's hard to know here because part of her
Speaker 1: immunity are people who have already had the virus, and
Speaker 1: we think those antibodies do stay around for a while.
Speaker 1: So I think our numbers, I think our herd immunity
Speaker 1: is higher than the I'm guessing we're probably closer to fifty.
Speaker 1: And I think that that number is close to the
Speaker 1: sixty or seventy that we really need in order to
Speaker 1: sort of break viral transmission. So I think we're close,
Speaker 1: But I think, as the CDC says, we're not there yet.
Speaker 1: Um hopefully in the next few months and well before
Speaker 1: the summer, hopefully we will reach those numbers where we
Speaker 1: will not have to have the same restrictions. But and
Speaker 1: do we know how long we stay protected from bodies
Speaker 1: vaccine means? Is it months? Is it a year? We
Speaker 1: don't And I think that's a really good question, And
Speaker 1: people ask me that question too, They say, well, why
Speaker 1: should I even take the vaccine? I don't know how
Speaker 1: long it's protective. We do have studies out certainly six
Speaker 1: to now going on maybe twelve months that do suggest
Speaker 1: there is protection and people may need a booster. We
Speaker 1: don't really know, uh, And certainly if there are more variants,
Speaker 1: is possible you may need a new strain booster. But
Speaker 1: I wouldn't really worry about that at this point because
Speaker 1: it's hard to measure T cells. And we do think
Speaker 1: that immunity may be longer even than than antibodies, but
Speaker 1: the antibody levels are high and they do last for
Speaker 1: many months at least. Look, I gotta say, I'm not
Speaker 1: so concerned about the idea of getting a booster. It's
Speaker 1: it's what I do each year for a flu shot,
Speaker 1: So why not just throw the flu shot in with
Speaker 1: a booster for the COVID shot. It's and look, I
Speaker 1: know that not everybody gets a flu shot, but perhaps
Speaker 1: that will change. Do we get T cells out of
Speaker 1: these vaccines just quickly? We think we do, yes, absolutely,
Speaker 1: and that probably provides much longer lasting immunity than the
Speaker 1: actual tighter of the inner bodies. But with all the studies,
Speaker 1: the antibody tigers are high, higher than the natural infection
Speaker 1: and last even longer. So I think there's a lot
Speaker 1: of good data and we need to address that. Well.
Speaker 1: Always good fun, let's talk about the lab lee listen
Speaker 1: always good information for me. I was thinking, I can't
Speaker 1: wait to where we're in a world where we can
Speaker 1: just go wherever we want with Dr LUs Bader, because
Speaker 1: we discover so many different Maybe do it in the studio,
Speaker 1: and do it in the studio, all right, Dr Ian
Speaker 1: LUs Bader, Stay safe, Be well, Clinical Associate Professor Medicine
Speaker 1: at n y U Landgoing Medical Center. On the phone
Speaker 1: in New York City. This is Bloomberg Business Week with
Speaker 1: Carol Masser and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio.
Speaker 1: So we are hyper focused on President Biden's tune, a
Speaker 1: quarter twillion dollar US infrastructure plan. He is expected to
Speaker 1: announce it in about I think ninety minutes from now,
Speaker 1: and reporting for Bloomberg Business Week is national course by
Speaker 1: that Josh Green, He wrote and notes that the infrastructure
Speaker 1: boon risks adding to the President's immigration woes. It's another
Speaker 1: side of the story that we hadn't thought about. Yeah,
Speaker 1: and like everything else, it is much more nuanced than
Speaker 1: meets the eye. Joel Weber is editor at Bloomberg Business Week,
Speaker 1: joining us on the remote from Brooklyn. Amanda Colson Hurley
Speaker 1: as Politics editor for Bloomberg Business week Joel Josh makes
Speaker 1: a great point in this piece, makes a lot of
Speaker 1: great points that the focus really has been on on
Speaker 1: on one thing, this idea of a surge at the border.
Speaker 1: But there's a reason why people are coming across the
Speaker 1: United States border with Mexico. And at the same time,
Speaker 1: it's not necessarily as many children as people think. Yeah,
Speaker 1: I thought what Josh did that was really interesting when
Speaker 1: in this was just like take it sort of two
Speaker 1: steps further than than at least my brain was was
Speaker 1: already going, which was, you know, this infrastructure bill that
Speaker 1: we expect Biden to announce big money. It will mean
Speaker 1: that there will be a big boost to the economy.
Speaker 1: It also means that the humanitarian crisis, immigration uh struggles
Speaker 1: that we've seen on the border could only get amplified
Speaker 1: because of that. So so Amanda's bring you in. Um,
Speaker 1: how how is Josh able to connect those dots? Yeah,
Speaker 1: I mean the way that Josh connects them is really
Speaker 1: looking at um the you know, economic prospects in both
Speaker 1: the US and in Mexico. UM. One of the Yeah,
Speaker 1: one of the things that's kind of been missed or
Speaker 1: overlooked in some of the coverage of what's going on
Speaker 1: at the border is that although there's been this um
Speaker 1: quite pronounced increase in uh families seeking asylum, there's also
Speaker 1: been a steady increase since last year in the number
Speaker 1: of uh, you know, just kind of soul soul adults
Speaker 1: not traveling with families, not seeking asylum, just crossing the
Speaker 1: border for for you know, economic opportunity, um. And a
Speaker 1: lot of those adults traveling alone are are also Mexican.
Speaker 1: And so what you know, what Josh says is that, um,
Speaker 1: you know a lot of these migrants are drawn to uh,
Speaker 1: you know, opportunities in the US as the US recovers
Speaker 1: from the pandemic. Uh, you know, with vaccination going pretty
Speaker 1: well here, with jobs coming back, it's it's an attractive prospect.
Speaker 1: And Mexico, you know, on the other hand, has been
Speaker 1: hit very hard by COVID, as has the US, but uh,
Speaker 1: you know, vaccination is not nearly so far along. Uh.
Speaker 1: And also the Mexican government has not provided uh, you know,
Speaker 1: a generous relief at all. Uh. It's taken more of
Speaker 1: a kind of austerity approach. So those kind of factors,
Speaker 1: I think, for for some perspective, migrants would would tip
Speaker 1: the balance to uh, you know, maybe maybe trying to
Speaker 1: go to the US. This is one of those stories,
Speaker 1: as you said at the top, Tim, it's like just
Speaker 1: the facts and that this whole idea of this data.
Speaker 1: Two of those apprehended recently are single adults crossing the
Speaker 1: border from Mexico into the US Mexicans. The thing that's
Speaker 1: interesting about this, Amanda to first of all, is getting
Speaker 1: those statistics and kind of understanding exactly what's going on, UM,
Speaker 1: but also understanding that adults are looking for jobs they
Speaker 1: don't require maybe you know, as much handling as obviously
Speaker 1: kids would who are crossing the border from Mexico into
Speaker 1: the United States. Oh, that's right. And uh, you know,
Speaker 1: one of the things that the Josh Green notes in
Speaker 1: this in the story, uh is that obviously, you know,
Speaker 1: higher numbers of people making that crossing, uh, you know,
Speaker 1: would be a logistical and potentially political you know, a
Speaker 1: headache for the Biden administration, but not the same way
Speaker 1: as UM, you know, unaccompanied miners or or families. In
Speaker 1: terms of UM, these are not people fleeing persecution you know,
Speaker 1: back home. If if they end up being deported, it's uh,
Speaker 1: you know, it's not a humanitarian crisis of sending them
Speaker 1: back into danger. So um, some of those logistical and
Speaker 1: complications and political risks are not, uh do not rise
Speaker 1: to the level that they would um with the family
Speaker 1: asylum seekers. So given that, we expect the economy to
Speaker 1: start to do and continue to do pretty well here
Speaker 1: in the United States. Unclear how the economy in Mexico
Speaker 1: will do, but as Josh points out, there significantly behind
Speaker 1: the United States when it comes to inoculating the population. Well.
Speaker 1: At the same time, I'm wondering about potential tools that
Speaker 1: the White House actually has for fixing this crisis. What
Speaker 1: are those, Amanda, Um, Yeah, I mean if there are
Speaker 1: certain policies you know that it could try to pursue, um,
Speaker 1: you know, the Trump administration had suspended temporary work these
Speaker 1: is um, it could bring those back, um, you know
Speaker 1: and kind of generally open up some of those legal
Speaker 1: paths immigration that have been have been blocked for a while.
Speaker 1: I'm part of what, uh, what we're seeing with the
Speaker 1: increase in unauthorized immigration is um kind of overflow from
Speaker 1: what you know otherwise might have happened in legal channels. UM,
Speaker 1: you know, divide administration could even kind of offer assistance
Speaker 1: to Mexico with vaccination. You know it could um write uh,
Speaker 1: you know, when we have a surplus of vaccine, I
Speaker 1: guess we already do, you know, divert some of that
Speaker 1: to Mexico and that would help revive revive the Mexican
Speaker 1: economy in terms, so then people would have more opportunities
Speaker 1: at home, right. Something we talked to Nobel Lauri h
Speaker 1: Joseph Stiglets about recently about how the developed world has
Speaker 1: to help out the developing nations on a couple different levels,
Speaker 1: but you know, first and foremost helping them get COVID
Speaker 1: under control and sharing those vaccines. Folks, thank you how much.
Speaker 1: Bloomberg Business Week editor Joe Webber with us along with
Speaker 1: Bloomberg Business Week Politics editor Amanda Coulson Hurley. This is
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovich from Bloomberg Radio. So among our most read
Speaker 1: stories in the Bloomberg includes this next one, uh, not
Speaker 1: delivering in its first day of trading as a public company.
Speaker 1: We're talking about Delivery holdings collapsing, Tim and its London
Speaker 1: public debut. Investors abandoning the food delivery startup and that's
Speaker 1: because of its labor practices, among other things. Yeah, really
Speaker 1: interesting story happening, and it's not one that's necessarily playing
Speaker 1: out in the United States. And that's what's so interesting
Speaker 1: to me about this because investors here don't really seem
Speaker 1: to care about those But it's trending high. It is.
Speaker 1: It is, Oh, it is. What I mean, those investors
Speaker 1: don't care about it with American companies, Yeah, exactly, that's
Speaker 1: what I mean. That it doesn't transfer, Yeah, it doesn't transfer.
Speaker 1: Diana Gomes is consumer staples analyst at Bloomberg Intelligence, joining
Speaker 1: us on the phone from London. Diana, help us make
Speaker 1: sense of this because what I'm what I'm getting at
Speaker 1: here is that E s G is something that investors
Speaker 1: talk a lot about here, it's something that banks talk
Speaker 1: a lot about, but at the end of the day,
Speaker 1: it's not part of earnings, and investors look at earnings.
Speaker 1: That's what moves the company stock. And it seems like
Speaker 1: from what I've read and from what I understand about
Speaker 1: the delivery story, there are some big investors that are
Speaker 1: unwilling to actually buy the company's stock because of the
Speaker 1: company's labor practices. Yes, Hi, thank you for having me UM.
Speaker 1: That's uh, that's part to it true. That's uh, yes,
Speaker 1: you doesn't quite transfer to earnings UM. So it's some
Speaker 1: of the biggest UK asset managers came out over the
Speaker 1: last week saying this is not aligned with with our
Speaker 1: investment practice. And yes, part of it has to do
Speaker 1: with the statues of the writers. So Deliver is a
Speaker 1: logistics focused trying to serve on demand food delivery from
Speaker 1: restaurants and also grocery stores. So it needs this big
Speaker 1: foot of writers that can um really serve the demand
Speaker 1: for for these UH goods, especially at the time where
Speaker 1: we are spending so so much time at home with
Speaker 1: lockdowns and restrictions. So there is some concern as some
Speaker 1: of the writers may be earning much WEST and the
Speaker 1: minimum wage and and that really depends how we count
Speaker 1: the hours. But the other point is uh, this is
Speaker 1: a profit loss in company, so it has been burning
Speaker 1: cash UH and the possible regulation changes, especially in many
Speaker 1: of the European markets where Deliver competes with the other
Speaker 1: very aggressive competitors, the regulation is changing and that will
Speaker 1: mean higher costs because it could mean UH a minimum wage,
Speaker 1: it can mean insurance UM eight holi days we've um
Speaker 1: and all that will then transfer into the learning. So
Speaker 1: it is a big risk and it's a risk that
Speaker 1: we were reflected in their perspectives as well. Diane, I
Speaker 1: got a couple of questions, but how how likely is
Speaker 1: this too that just these types of companies which have
Speaker 1: been pandemic plays in the past year are just kind
Speaker 1: of falling out of favor with investors. We see that,
Speaker 1: and you point this out in your story. I mean
Speaker 1: door Dash is down twenty this month. Uh, you see
Speaker 1: others like that, um also just takeaway European rival, uh
Speaker 1: delivery Hero. They have fallen this year. Is it just
Speaker 1: a case of like not so interested in these kinds
Speaker 1: of companies right now? Yes, So the story is really
Speaker 1: turning as we see the vaccinations rolling out, even if
Speaker 1: quite slowing in some countries. But the story is turning
Speaker 1: into yes, the consumer will want to do things outside
Speaker 1: house and we'll want to go dying at their favorite
Speaker 1: restaurants and with friends and all that. So this companies
Speaker 1: rely on delivering meals from Russians at home, and that's
Speaker 1: not the demand will not be at the same level
Speaker 1: as it's right. I have to say, Tim and I
Speaker 1: had a conversation off air, and we're just like so
Speaker 1: tired of take out, Like just like we're talking about cooking.
Speaker 1: It's hard when you're working and all that stuff, right him.
Speaker 1: But we were just saying, I'm done kind of a
Speaker 1: taking Yeah, but the hard I mean, look, it's it's
Speaker 1: a tough it's a tough thing to be thinking about
Speaker 1: because in one sense it has absolutely saved people during
Speaker 1: during the pandemic when it was like difficult to get
Speaker 1: other types of food, people who were really concerned about
Speaker 1: going outside and just thinking about the people who were
Speaker 1: the essential workers who were delivering this food, right, And
Speaker 1: that's a big part of the conversation here in the
Speaker 1: United States. But I go back to some companies restaurants
Speaker 1: exactly and helping out restaurants. But a big part of
Speaker 1: the conversation is it's it's just not necessarily on the
Speaker 1: radar of investors the same way that it's on the
Speaker 1: radar of investors in the UK when they're thinking about
Speaker 1: out the regulatory risks. I think and and and perhaps
Speaker 1: this is some sort of harbinger of things to come
Speaker 1: in the United States. What do you think, Diana, I mean,
Speaker 1: do you think there's a chance that some of the
Speaker 1: regulatory risk could come to US companies. Yes, I think
Speaker 1: the regulatory risk is smaller in the US, especially with
Speaker 1: the California Act. It was agreed on quite recently. That's
Speaker 1: that's required some minimum benefits to be paid, but it
Speaker 1: was quite limited so there, and it was limited to
Speaker 1: California as well. So I think the sentiment and the
Speaker 1: the perspectives are different. And that probably hurts Deliver as
Speaker 1: well because they had the choice of wing in London
Speaker 1: instead of New York. And and well that's what I
Speaker 1: wondered to about what it ultimately does for the London
Speaker 1: IPO market. Diana, thank you so much for breaking it down.
Speaker 1: Diana goes consider Staples analyst Pepperleinberg intelligent with us on
Speaker 1: the phone in London. I'm bro Macro a journal now.
Speaker 1: But you let me drive. Oh no no, no, drive home, honey, please,
Speaker 1: I'll do the riding drivel let me. I want to drive,
Speaker 1: Just drive, baby, it's the questions trying. This is the
Speaker 1: drive to the Globe Commune. Thanks, we'll drying us down
Speaker 1: on Bloomberg Radio. All right, just about ten and a
Speaker 1: half minutes left in today's trading session. Let's get to
Speaker 1: it with Walter Todd, chief investment Officer, Greenwood Capital Associates,
Speaker 1: back with us and on the phone from Greenwood, South Carolina. Walter,
Speaker 1: how are you doing good, Carol? Thanks for having me
Speaker 1: on today. Thank you well, it's good to have you
Speaker 1: back with us. How do you feel like where we
Speaker 1: are in terms of out of COVID into a recovery
Speaker 1: into blank for the markets? Yeah, it's really it's really
Speaker 1: amazing to reflect back on twelve months ago. I was
Speaker 1: just looking at S and P cloes four that day
Speaker 1: and we're pushing four thousand here this afternoon. So one
Speaker 1: of the biggest questions I get from people is how
Speaker 1: do you explain this disconnect between what's happened in the
Speaker 1: markets over the past twelve months and what's happened in
Speaker 1: the economy. And that's it's very difficult to explain until
Speaker 1: you look at the federalers are a balance sheet, and
Speaker 1: the and the US deficit, and then you can you
Speaker 1: can make some sense of it. But looking forward, you know,
Speaker 1: I feel very good about where we are kind of
Speaker 1: on the vaccine front here in the US and the
Speaker 1: outlook for the economy for the rest of the year.
Speaker 1: But ironically the market may struggle a little bit more
Speaker 1: as we reopen than it did when you know, things
Speaker 1: seem the worst. So you kind of get that the
Speaker 1: market looking ahead anticipating the reopening, and then the challenge
Speaker 1: as you actually get very good economic numbers for the
Speaker 1: rest of this year. So a lot of optimism already
Speaker 1: priced into markets, is what you're saying, right, Yeah, I
Speaker 1: think you know that. I think there is a as
Speaker 1: the saying goes, the easy money has been made, and
Speaker 1: I think the money moving forward, or the games moving
Speaker 1: forward are going to be more challenging, going to be
Speaker 1: more nuance. There's gonna be a lot of chop, which
Speaker 1: we've seen over the past you know, a month or
Speaker 1: so in terms of the rotation in the market. And
Speaker 1: then we've got the risks out there, you know from Europe.
Speaker 1: I mean, France just announced today they're going back into
Speaker 1: lockdown for four weeks. So we've got other parts of
Speaker 1: the globe that are not nearly as good shape as
Speaker 1: the US is. Does that make you a little nervous
Speaker 1: when you see what's going on over in Europe? Yeah, definitely.
Speaker 1: I mean that, you know, Europe as a block is
Speaker 1: a bigger you know, economic um influence on the world
Speaker 1: economy than the US, so it's very important. Um, they're
Speaker 1: clearly lagging behind from a vaccine standpoint, and I think
Speaker 1: that is one of the bigger risks out there that
Speaker 1: they don't kind of get a move and start to
Speaker 1: emerge from this as we have. Of course, they don't
Speaker 1: have the benefit of a tracks going into bank accom out,
Speaker 1: so that's that's a little bit of a challenge as well.
Speaker 1: I have to say, you know, you pull up the
Speaker 1: S and P five hundred. I'm just doing that on
Speaker 1: the Bloomberg and obviously it doesn't work for radio. But
Speaker 1: you know, we were kind of building off of the
Speaker 1: New Year, uh, and then you definitely saw I'm going
Speaker 1: back to pre pandemic, so we built up and then
Speaker 1: of course there was a big drop down into um,
Speaker 1: you know, March, and then we've had quite a rally
Speaker 1: and we have recovered not only what we lost um
Speaker 1: because of the pandemic, but we've lost a certain amount
Speaker 1: then and that's where you start to say, Walter, if
Speaker 1: you look at a chart like that, you're thinking, Okay,
Speaker 1: how much are we getting ahead of ourselves? Because I
Speaker 1: do wonder where the economy would have been today if
Speaker 1: we hadn't dealt with the pandemic. Would we be in
Speaker 1: a higher rate environment? What kind of growth? You know,
Speaker 1: would the labor market continue to be stressed? I mean,
Speaker 1: I just wonder, Yeah, I mean, I think, um, when
Speaker 1: you kind of look at that assessment over the past year,
Speaker 1: I think clearly the moves at the Central Bank made
Speaker 1: and that the government made in terms of the stimulus
Speaker 1: and the support that they provided, provided that downside support
Speaker 1: for the market. But we still have all these issues.
Speaker 1: We have, you know, ten million fewer jobs than we
Speaker 1: did a year ago. We still got close to nineteen
Speaker 1: million people collecting some form of unemployment insurance. So there's
Speaker 1: still a lot of work to be done. But clearly
Speaker 1: the support that you know, the Central Bank and the
Speaker 1: government you know, put out there was was a big
Speaker 1: tail win for financial markets. I'm wondering what happens when
Speaker 1: it comes to taxes because part of the infrastructure plan,
Speaker 1: and we're gonna hear from the President in a little
Speaker 1: over a half hour. That's when a little a little
Speaker 1: around a half hour, it's when he's scheduled to talk
Speaker 1: at for twenty Eastern time today. Uh and unveil more
Speaker 1: details about his infrastructure plan. Some of those details include
Speaker 1: hike on corporate taxes to from markets not moving negatively
Speaker 1: on that news. It doesn't seem like investors are concerned
Speaker 1: about a corporate tax hike. Why do you think that is? Yeah,
Speaker 1: that's a great point to him. I mean, I think,
Speaker 1: you know, the corporate tax height was broadly anticipated. The
Speaker 1: rate that's being proposed. I think the expectation that's gonna
Speaker 1: be walked back down to twenty five. So go from
Speaker 1: one to twenty five. It's it's not in significant, but
Speaker 1: it's not, you know, a huge move. I think investors
Speaker 1: maybe missing the fact that this is just part one
Speaker 1: of this plan in terms of the spending and the taxes.
Speaker 1: So there's gonna be a second part of this plan
Speaker 1: that's going to include additional taxes that may bite a
Speaker 1: little bit more. They may include capital gains UH taxes,
Speaker 1: They may include higher individual taxes as well. So I
Speaker 1: think that's total tax bill that's going to be proposed
Speaker 1: is probably gonna be you know, pushed three trillion dollars,
Speaker 1: and when it fully comes out, that may be a
Speaker 1: bit of a shock to investors. Even though we do
Speaker 1: have spending on the other side of it. But remember
Speaker 1: taxes hit immediately to spending. The spending is going out
Speaker 1: over eight to ten years, So there's gonna be a
Speaker 1: drag when we head into two. Because hey, Walter Todd,
Speaker 1: as an equity investor or someone who is investing in
Speaker 1: the equity market, just got about thirty seconds here. What's
Speaker 1: more problematic capital gains taxes or a corporate tax hike
Speaker 1: for publicly hell companies in particular, Just quickly, Yeah, I
Speaker 1: think I think from an investor perspective of the capital
Speaker 1: gains hike would be more significant in the main. One
Speaker 1: of the main reasons for that is there's there's the
Speaker 1: prospect that may become effective upun enactment. In other words,
Speaker 1: if it happens and they passed in September, if it
Speaker 1: could become effective this year, and that would be problematic
Speaker 1: for investors. I think. All right, I was good to
Speaker 1: check in with you. Walter Todd, President and Chief Investment
Speaker 1: Officer of at Greenwood Capital Associates, on the phone from Greenwood,
Speaker 1: South Carolina. Thanks for listening to Bloomberg Business Week. Download
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