1 00:00:01,800 --> 00:00:04,440 Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm 2 00:00:04,480 --> 00:00:07,280 Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 3 00:00:07,320 --> 00:00:09,840 Speaker 1: you the latest news from the world to business and finance, 4 00:00:09,840 --> 00:00:13,640 Speaker 1: plus technology, politics, economics, all purtnising the power of Business 5 00:00:13,680 --> 00:00:17,119 Speaker 1: Week reporters and editors, not to mention our journalists and 6 00:00:17,120 --> 00:00:20,000 Speaker 1: analysts in more than one twenty countries. You can download 7 00:00:20,000 --> 00:00:23,479 Speaker 1: Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. You 8 00:00:23,480 --> 00:00:25,439 Speaker 1: can also listen to our radio show at two pm 9 00:00:25,440 --> 00:00:27,880 Speaker 1: Eastern Time on the Bloomberg Radio or watch us on 10 00:00:27,920 --> 00:00:32,080 Speaker 1: YouTube search Bloomberg Global News. Some of the key COVID 11 00:00:32,159 --> 00:00:36,640 Speaker 1: headlines that are out there about South Africa, they're surgeon cases, um, 12 00:00:36,680 --> 00:00:39,200 Speaker 1: not overwhelming hospitals so far. In New York City, Mayored 13 00:00:39,200 --> 00:00:41,640 Speaker 1: Bill de Blasio saying the city will become the nation's 14 00:00:41,680 --> 00:00:44,520 Speaker 1: first impose a vaccine mandate on private sector workers starting 15 00:00:44,520 --> 00:00:46,720 Speaker 1: on December twice seven. But as you so rightfully pointed 16 00:00:46,760 --> 00:00:48,559 Speaker 1: out to him, good luck with that, because you're not 17 00:00:48,600 --> 00:00:50,839 Speaker 1: gonna be mayor anymore. Yeah, Eric Adams has his work 18 00:00:50,840 --> 00:00:52,519 Speaker 1: cut off him if he even ends up going through 19 00:00:52,560 --> 00:00:55,920 Speaker 1: with us, right, and we know how much difficulties President 20 00:00:56,000 --> 00:01:00,000 Speaker 1: Biden has in terms of imposing any kind of vaccine mandates. 21 00:01:00,040 --> 00:01:01,680 Speaker 1: One thing we're also watching is what's going on around 22 00:01:01,680 --> 00:01:04,880 Speaker 1: the world, Carol, France, for example, closing its nightclubs for 23 00:01:04,880 --> 00:01:07,440 Speaker 1: four weeks and we'll open vaccinations to children. So different 24 00:01:07,440 --> 00:01:09,120 Speaker 1: stories playing out in different parts of the country, in 25 00:01:09,120 --> 00:01:11,120 Speaker 1: different parts of the world to absolutely. So let's see 26 00:01:11,120 --> 00:01:13,720 Speaker 1: what our next guest has to say. Dr Michael Blas 27 00:01:13,840 --> 00:01:16,920 Speaker 1: is a chief medical officer at Annivasi Blavis excuse me, 28 00:01:17,000 --> 00:01:21,640 Speaker 1: Dr Michael Blavis, chief medical officer at Annivasi Diagnostics. It's uh. 29 00:01:21,680 --> 00:01:25,000 Speaker 1: He's also a practicing emergency department physician, and he joins 30 00:01:25,080 --> 00:01:27,199 Speaker 1: us on the phone in Atlanta, and I just wanted 31 00:01:27,240 --> 00:01:29,520 Speaker 1: to point out global COVID cases are topping two hundred 32 00:01:29,560 --> 00:01:33,280 Speaker 1: sixty eight million deaths, surpassing uh five point two million. 33 00:01:33,360 --> 00:01:35,560 Speaker 1: Just we've stopped doing those numbers, and when I see them, 34 00:01:35,560 --> 00:01:38,479 Speaker 1: it always kind of stops my heart a little bit. Um. 35 00:01:38,640 --> 00:01:40,840 Speaker 1: Dr Blavi's nice to have you here with us. How 36 00:01:40,880 --> 00:01:44,720 Speaker 1: are you, thank you, Carol? Very good pleasure to be 37 00:01:44,840 --> 00:01:46,720 Speaker 1: there with you. Well, tell us a little bit about 38 00:01:46,760 --> 00:01:49,600 Speaker 1: what you guys are seeing in terms of the impact 39 00:01:49,680 --> 00:01:52,360 Speaker 1: of the amicron variant and just generally in society when 40 00:01:52,400 --> 00:01:56,960 Speaker 1: it comes to battling COVID. So I think there's a 41 00:01:57,000 --> 00:02:01,080 Speaker 1: lot of kind of panic and concern. Rightfully, So, the 42 00:02:01,160 --> 00:02:03,440 Speaker 1: last time we had a new variant that there was 43 00:02:03,440 --> 00:02:06,480 Speaker 1: a lot of excitement about that was Delta. On the 44 00:02:06,560 --> 00:02:09,680 Speaker 1: kind of the diagnostic side, there's a lot of I 45 00:02:09,680 --> 00:02:13,440 Speaker 1: wouldn't say excitement, but some concern as well because there 46 00:02:13,440 --> 00:02:16,720 Speaker 1: are so many mutations with the omicron variants. So everyone 47 00:02:16,760 --> 00:02:20,000 Speaker 1: is scrambling to make sure their tests will accurately detect it. 48 00:02:20,080 --> 00:02:23,440 Speaker 1: They're doing all sorts of simulations, and obviously on the 49 00:02:23,480 --> 00:02:26,799 Speaker 1: diagnostic side or on the therapeutic side, everyone is worried 50 00:02:27,440 --> 00:02:29,800 Speaker 1: will our treatments work just as well? And do we 51 00:02:29,840 --> 00:02:32,840 Speaker 1: need to come up with new things? When do we know? 52 00:02:32,960 --> 00:02:35,880 Speaker 1: When will we know? Because so far over the last 53 00:02:35,919 --> 00:02:37,480 Speaker 1: six days, all we've been talking about is we do 54 00:02:37,560 --> 00:02:39,600 Speaker 1: we need more data? We need more data? When do 55 00:02:39,680 --> 00:02:43,160 Speaker 1: we get that data? So unfortunately it just takes time. 56 00:02:43,560 --> 00:02:47,000 Speaker 1: We're really talking about three weeks now that we've been 57 00:02:47,040 --> 00:02:50,520 Speaker 1: aware of it. So the genetic sequencing is almost completely done. 58 00:02:50,560 --> 00:02:52,919 Speaker 1: We have some good data on that, so a lot 59 00:02:52,960 --> 00:02:55,800 Speaker 1: of simulation can occur. For instance, we've looked at it 60 00:02:55,840 --> 00:03:02,639 Speaker 1: and will detect the cases um like things like how well, uh, 61 00:03:02,840 --> 00:03:06,640 Speaker 1: will the virus respond to current treatments. That takes people 62 00:03:06,840 --> 00:03:10,400 Speaker 1: actually being studied, studies being approved and run, so something 63 00:03:10,440 --> 00:03:13,440 Speaker 1: like that can take several months. Obviously, in the next 64 00:03:13,440 --> 00:03:16,360 Speaker 1: few weeks we'll get more of a general idea of 65 00:03:16,400 --> 00:03:21,120 Speaker 1: how severe the diseases or macron is, how quickly it spreads, 66 00:03:21,160 --> 00:03:24,240 Speaker 1: and we'll get uh some news about our any tests 67 00:03:24,280 --> 00:03:27,000 Speaker 1: failing to catch it, so that people will know do 68 00:03:27,080 --> 00:03:29,239 Speaker 1: they have to choose a certain type of test? Are 69 00:03:29,240 --> 00:03:31,960 Speaker 1: they okay? Just getting whatever they're used to getting? All right, 70 00:03:32,000 --> 00:03:33,760 Speaker 1: So we've just got to be patient here in the meantime, 71 00:03:33,800 --> 00:03:36,880 Speaker 1: just be prudent. It sounds like, UM, tell us a 72 00:03:36,880 --> 00:03:38,720 Speaker 1: bit about the work that you guys are doing. You 73 00:03:38,760 --> 00:03:41,640 Speaker 1: have a COVID nineteen test and detector. From what I understand, 74 00:03:41,680 --> 00:03:43,840 Speaker 1: at least on your website, it's not yet cleared nor 75 00:03:43,880 --> 00:03:47,200 Speaker 1: submitted been submitted to the FDA for authorization under the 76 00:03:47,200 --> 00:03:51,560 Speaker 1: Emergency Use Act. Is that correct? That's correct. We're just 77 00:03:51,640 --> 00:03:56,040 Speaker 1: starting our final study with patient enrollment now and hope 78 00:03:56,040 --> 00:03:59,280 Speaker 1: to submit to the FDA in early January. So maybe 79 00:03:59,320 --> 00:04:01,880 Speaker 1: be out on the market in late February or at 80 00:04:01,920 --> 00:04:06,160 Speaker 1: least early March. And it's basically like a massive lab 81 00:04:06,520 --> 00:04:08,920 Speaker 1: PCR that you would find in a hospital, but in 82 00:04:08,920 --> 00:04:11,120 Speaker 1: in a tiny little box and one that gives you 83 00:04:11,240 --> 00:04:14,000 Speaker 1: results in about thirty minutes or less. As well. How 84 00:04:14,080 --> 00:04:17,680 Speaker 1: much does it cost or how might it cost? So 85 00:04:18,160 --> 00:04:21,320 Speaker 1: the device itself, and we can only give ranges per 86 00:04:21,360 --> 00:04:24,760 Speaker 1: FDA regulations. Uh, it might be kind of in the 87 00:04:24,920 --> 00:04:29,120 Speaker 1: two range plus or minus. We haven't made any final decisions, 88 00:04:29,200 --> 00:04:31,520 Speaker 1: and then the device can run up to about three 89 00:04:31,560 --> 00:04:34,920 Speaker 1: thousand to five thousand tests in its lifetime, and how 90 00:04:35,000 --> 00:04:38,919 Speaker 1: much each task costs is something we're still trying to determine. 91 00:04:39,320 --> 00:04:41,040 Speaker 1: We want to bring down the price as much as 92 00:04:41,080 --> 00:04:44,479 Speaker 1: possible to increase access, but obviously there are costs of 93 00:04:44,520 --> 00:04:50,240 Speaker 1: manufacturing involved. So we're thinking probably in the fifty dollar range, 94 00:04:50,279 --> 00:04:53,400 Speaker 1: but that hasn't been decided, and again we can't really 95 00:04:53,400 --> 00:04:58,200 Speaker 1: give out any uh definitive numbers according to the FDA. 96 00:04:58,480 --> 00:05:00,000 Speaker 1: What were your thoughts last week when you heard tries 97 00:05:00,000 --> 00:05:02,040 Speaker 1: and in Biden said that he wants insurance companies to 98 00:05:02,120 --> 00:05:05,919 Speaker 1: our cover at home testing starting in January, So you know, 99 00:05:05,960 --> 00:05:09,240 Speaker 1: obviously as a company, Uh, you get excited about that. 100 00:05:09,279 --> 00:05:13,640 Speaker 1: As an emergency physician who saw hundreds of patients and 101 00:05:13,640 --> 00:05:16,520 Speaker 1: many very sick, I think this is a great idea 102 00:05:16,600 --> 00:05:20,880 Speaker 1: because if we can really interrupt the spread of COVID vaccination, 103 00:05:20,920 --> 00:05:23,760 Speaker 1: we all hope that everybody will get vaccinated, or at 104 00:05:23,800 --> 00:05:27,560 Speaker 1: least you know that over seventy five mark and COVID 105 00:05:27,560 --> 00:05:30,440 Speaker 1: will just go away and you know we'll be saved 106 00:05:30,520 --> 00:05:33,039 Speaker 1: from it. That's not been the case. So the way 107 00:05:33,080 --> 00:05:36,480 Speaker 1: we're going to stop COVID from spreading with each wave 108 00:05:36,920 --> 00:05:39,760 Speaker 1: is to identify as quickly and easily as possible when 109 00:05:39,800 --> 00:05:42,719 Speaker 1: somebody has an infection. So, for instance, I want to 110 00:05:42,720 --> 00:05:46,599 Speaker 1: go to a party with people, I test quickly, easily, accurately, 111 00:05:47,000 --> 00:05:50,279 Speaker 1: and um, then you know I find out on positive. Oops, 112 00:05:50,320 --> 00:05:51,960 Speaker 1: I'm going to stay home. We're not going to infect 113 00:05:51,960 --> 00:05:54,600 Speaker 1: anybody else. So if we can get to that point, 114 00:05:55,040 --> 00:05:57,039 Speaker 1: I think it's really going to make an impact. But 115 00:05:57,440 --> 00:06:01,040 Speaker 1: costs and access are both significant barriers. So people need 116 00:06:01,120 --> 00:06:03,280 Speaker 1: to be able to test at home ideally and be 117 00:06:03,360 --> 00:06:06,560 Speaker 1: able to afford to test. Yeah, I know, so many 118 00:06:06,600 --> 00:06:08,880 Speaker 1: of the conversations that we have certainly have to do 119 00:06:09,040 --> 00:06:15,120 Speaker 1: with the ability to affordable UH and accessible testing certainly 120 00:06:15,160 --> 00:06:18,880 Speaker 1: going forward. Dr Michael blab Us, he's chief medical officer 121 00:06:18,920 --> 00:06:23,240 Speaker 1: Anavasi Diagnostics. He's with us on the phone in Atlanta. 122 00:06:23,320 --> 00:06:25,480 Speaker 1: We think about this. You talked about this a lot test. Well, 123 00:06:25,480 --> 00:06:28,360 Speaker 1: we do weekly tests for our son who's in nursery 124 00:06:28,400 --> 00:06:31,000 Speaker 1: school as part of the you know, the tuition there, 125 00:06:31,200 --> 00:06:35,440 Speaker 1: and we forgot his salive example last week. Well we 126 00:06:35,480 --> 00:06:37,080 Speaker 1: just have to give him an instant test at home. 127 00:06:37,120 --> 00:06:39,960 Speaker 1: But you know the PCRs they're with bottle tests. Yeah, 128 00:06:40,040 --> 00:06:43,040 Speaker 1: you know, it's a good point. This is Bloomberg Business 129 00:06:43,120 --> 00:06:46,919 Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic 130 00:06:47,400 --> 00:06:51,680 Speaker 1: on Bloomberg Radio. You're listening to Bloomberg Business Week with 131 00:06:51,760 --> 00:06:56,599 Speaker 1: Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. 132 00:06:56,839 --> 00:06:59,360 Speaker 1: All right, so, um, love this story, so kind of them. 133 00:06:59,400 --> 00:07:02,360 Speaker 1: I'm talking about Wall Street It, Tim, it just wants 134 00:07:02,400 --> 00:07:05,400 Speaker 1: to sell a special index just for you. This story 135 00:07:05,440 --> 00:07:07,720 Speaker 1: in the upcoming issue of Bloomberg Business Week magazine. It's 136 00:07:07,760 --> 00:07:10,640 Speaker 1: also Today's Bloomberg Big Take. Pat Rickners, markets and finance 137 00:07:10,680 --> 00:07:12,760 Speaker 1: reporter for Bloomberg Business Week. He's with us in the 138 00:07:12,760 --> 00:07:16,520 Speaker 1: Bloomberg Interactive Broker's studio in New York. Justina Lee wrote 139 00:07:16,520 --> 00:07:19,480 Speaker 1: the story. She's markets reporter at Bloomberg News. She joins 140 00:07:19,560 --> 00:07:21,960 Speaker 1: us on the phone from London. So, the idea of 141 00:07:22,000 --> 00:07:25,520 Speaker 1: investing in passive indexes and you know, those from perhaps 142 00:07:25,800 --> 00:07:28,760 Speaker 1: Vanguard and others that track the SMP five hundred, it's 143 00:07:28,760 --> 00:07:33,120 Speaker 1: been a really good thing for investors pat but not 144 00:07:33,200 --> 00:07:36,360 Speaker 1: necessarily such a great thing for stock pickers. Yeah. You know, 145 00:07:36,720 --> 00:07:39,400 Speaker 1: if I think of the two most tectonic changes in 146 00:07:39,400 --> 00:07:43,720 Speaker 1: investing in my career, it's been m the adoption of 147 00:07:43,720 --> 00:07:46,600 Speaker 1: index funds and then the shift of that to e 148 00:07:46,720 --> 00:07:49,080 Speaker 1: t f s. And one of the things I found 149 00:07:49,120 --> 00:07:53,960 Speaker 1: so fascinating about Justina's story was that, like, this is 150 00:07:54,240 --> 00:07:57,440 Speaker 1: what people on Wall Street really hope will be the 151 00:07:57,480 --> 00:08:00,160 Speaker 1: next step. Uh. In some ways it has all of 152 00:08:00,200 --> 00:08:03,400 Speaker 1: the logic of indexing and ets, but they think it's 153 00:08:03,440 --> 00:08:06,559 Speaker 1: a way that they can preserve an ability to charge 154 00:08:06,600 --> 00:08:08,720 Speaker 1: higher fees. I'm just saying it, where where do you 155 00:08:08,760 --> 00:08:13,120 Speaker 1: see this in its evolution? Right? It's it's kind of interesting, 156 00:08:13,200 --> 00:08:15,880 Speaker 1: like you said, because it has some passive elements, but 157 00:08:16,000 --> 00:08:19,560 Speaker 1: it really has some kind of an active ingredient. Um 158 00:08:19,760 --> 00:08:22,880 Speaker 1: kind of smuggled into it because they kind of start 159 00:08:22,880 --> 00:08:25,000 Speaker 1: what's the clients start with is an index, and then 160 00:08:25,000 --> 00:08:27,440 Speaker 1: they can add and subtract from that list to end 161 00:08:27,480 --> 00:08:31,000 Speaker 1: up with a personalized portfolio. And we're really seeing kind 162 00:08:31,000 --> 00:08:34,920 Speaker 1: of the intersection of like technology as well as UM 163 00:08:35,000 --> 00:08:37,960 Speaker 1: kind of this big personalization trend across a lot of 164 00:08:38,040 --> 00:08:40,280 Speaker 1: other products. You know, if you think about Spotify or 165 00:08:40,360 --> 00:08:42,960 Speaker 1: Netflix every where, I hurry you here. And and the 166 00:08:43,040 --> 00:08:45,800 Speaker 1: question is, I mean, does the same concept also apply 167 00:08:45,920 --> 00:08:49,400 Speaker 1: to investing. Yeah, it is kind of interesting in terms 168 00:08:49,480 --> 00:08:51,440 Speaker 1: of so you basically take it index and you can 169 00:08:51,480 --> 00:08:54,199 Speaker 1: kind of tweak it um. I know it's kind of 170 00:08:54,320 --> 00:08:56,240 Speaker 1: earlier in the game, or is it like talk to 171 00:08:56,320 --> 00:08:59,600 Speaker 1: us about kind of the establishment embracing this form of 172 00:08:59,640 --> 00:09:04,600 Speaker 1: investor ding. So for now, direct indexing runs about three 173 00:09:05,040 --> 00:09:08,400 Speaker 1: fifty billion dollars of assets, so it's so tiny if 174 00:09:08,440 --> 00:09:11,520 Speaker 1: you compare that to the mutual fund or et s industry. 175 00:09:11,800 --> 00:09:14,120 Speaker 1: But we're definitely seeing a lot of big moves all 176 00:09:14,160 --> 00:09:16,640 Speaker 1: around to make this the next big thing. You know, 177 00:09:16,720 --> 00:09:21,960 Speaker 1: we have had acquisitions from Franklin, Templeton, black Rock, Morgan, Stanley, Vanguard, 178 00:09:22,040 --> 00:09:24,720 Speaker 1: even all the biggest names kind of wanting to get 179 00:09:24,760 --> 00:09:27,600 Speaker 1: ahold of this, And I think the question is whether 180 00:09:27,800 --> 00:09:30,480 Speaker 1: this will kind of end up being quite a niche 181 00:09:30,559 --> 00:09:33,280 Speaker 1: product that maybe you can get a bit more fees on, 182 00:09:33,320 --> 00:09:35,960 Speaker 1: and whether or whether it really will end up being 183 00:09:36,000 --> 00:09:38,000 Speaker 1: a threat to E T F the mutual funds. Well, 184 00:09:38,000 --> 00:09:39,600 Speaker 1: you know, in our tis at the top of the show, 185 00:09:39,640 --> 00:09:42,120 Speaker 1: I said, well, is this altruistic like giving the client 186 00:09:42,200 --> 00:09:45,680 Speaker 1: what they want? Or is it capitalistic or a little 187 00:09:45,679 --> 00:09:48,920 Speaker 1: bit of both. Yeah, I think there really is a 188 00:09:48,920 --> 00:09:52,800 Speaker 1: philosophical question here, because you know, the supporters of this day, 189 00:09:52,840 --> 00:09:55,360 Speaker 1: even if the clients are not making the best position, 190 00:09:55,440 --> 00:09:58,280 Speaker 1: you need to enable people to make them. You know, 191 00:09:58,360 --> 00:10:00,720 Speaker 1: for instance, if you you have a client to hate 192 00:10:00,720 --> 00:10:03,440 Speaker 1: s fossil fuel companies, I mean, maybe it's okay for 193 00:10:03,480 --> 00:10:06,200 Speaker 1: them even if they lose a few basis points each 194 00:10:06,240 --> 00:10:09,240 Speaker 1: year in performance. But of course we've also had a 195 00:10:09,320 --> 00:10:11,880 Speaker 1: lot of research over the years showing that it's not 196 00:10:12,080 --> 00:10:15,480 Speaker 1: that great when you let individuals you know, with busy lives, 197 00:10:15,640 --> 00:10:18,679 Speaker 1: um if you worry about their own portfolios. So in 198 00:10:18,679 --> 00:10:22,800 Speaker 1: that sense, I mean, are you actually just empowering uh? 199 00:10:23,440 --> 00:10:25,400 Speaker 1: Investors might have something to say about that. I mean, 200 00:10:25,400 --> 00:10:28,040 Speaker 1: I think there's also been you know, quite influential papers 201 00:10:28,040 --> 00:10:30,200 Speaker 1: in the history of markets that show that even the 202 00:10:30,240 --> 00:10:34,040 Speaker 1: best stock pickers can't repeatedly even after fees, especially after 203 00:10:34,080 --> 00:10:36,360 Speaker 1: fees beat the markets just you know. So, I wonder 204 00:10:36,360 --> 00:10:38,280 Speaker 1: in a in a where it comes when it comes 205 00:10:38,320 --> 00:10:42,160 Speaker 1: down to fees, how much directing indexing will cost, especially 206 00:10:42,160 --> 00:10:44,839 Speaker 1: compared to some passive vehicles. I mean hundred for example, 207 00:10:45,000 --> 00:10:47,520 Speaker 1: more than this year. You could throw that into an 208 00:10:47,520 --> 00:10:51,320 Speaker 1: et F with what like five basis points of a fee, yeah, 209 00:10:51,400 --> 00:10:54,800 Speaker 1: or even lessen that at this point, Um, there isn't 210 00:10:54,800 --> 00:10:58,680 Speaker 1: a lot of transparency in direct indexing fees, but Bloomberg 211 00:10:58,720 --> 00:11:02,560 Speaker 1: Intelligence Estimate did that it's around thirty basis points, which 212 00:11:02,559 --> 00:11:04,880 Speaker 1: is still higher than E T S where you can 213 00:11:04,880 --> 00:11:08,679 Speaker 1: get almost zero at this point. So it is cheaper 214 00:11:08,720 --> 00:11:11,480 Speaker 1: than your old school mutual fund, but it is more 215 00:11:11,520 --> 00:11:14,480 Speaker 1: expensive than you know, the cheapest E T S, which 216 00:11:14,559 --> 00:11:16,800 Speaker 1: I think really is to pitch here you know, somewhere 217 00:11:16,800 --> 00:11:20,240 Speaker 1: have been more expensive but not you know, the cheapest 218 00:11:20,360 --> 00:11:27,440 Speaker 1: of the products. No, that's okay, you know, it's interesting. Um, 219 00:11:28,080 --> 00:11:32,320 Speaker 1: I guess I do wonder it's hard not for Wall 220 00:11:32,360 --> 00:11:34,360 Speaker 1: Street who has been just watching so much of the 221 00:11:34,400 --> 00:11:37,400 Speaker 1: money fly out because of index funds. And I agree 222 00:11:37,440 --> 00:11:39,400 Speaker 1: with Pat. I mean, one of the first things I 223 00:11:39,440 --> 00:11:45,120 Speaker 1: did in my financial journalistic career was producing mutual fund show. 224 00:11:45,600 --> 00:11:47,880 Speaker 1: It was all about playing the strategies and you had 225 00:11:48,200 --> 00:11:51,440 Speaker 1: you know, people were just piling money, uh into mutual funds. 226 00:11:51,440 --> 00:11:54,720 Speaker 1: So it's fascinating how quickly it is evolved to the 227 00:11:54,760 --> 00:11:57,280 Speaker 1: index world. Although John Bogel, you know, bless his soul, 228 00:11:57,880 --> 00:11:59,880 Speaker 1: um and may rest in peace. You know what I 229 00:12:00,040 --> 00:12:01,600 Speaker 1: said years ago, Well, this is the way to go. 230 00:12:01,640 --> 00:12:04,160 Speaker 1: It makes sense. Um, it's a it's a smart strategy. 231 00:12:04,160 --> 00:12:07,360 Speaker 1: But I do wonder about the fees that financial firms 232 00:12:07,360 --> 00:12:10,160 Speaker 1: have been losing because everybody's been throwing money into index funds, 233 00:12:10,200 --> 00:12:12,599 Speaker 1: and how much of that is a big part of it. 234 00:12:12,600 --> 00:12:14,400 Speaker 1: And I guess well, time will tell, right in terms 235 00:12:14,400 --> 00:12:19,600 Speaker 1: of performance. Yeah, and you mentioned fees. But another part is, 236 00:12:19,640 --> 00:12:22,200 Speaker 1: of course, this is going to a few more single 237 00:12:22,400 --> 00:12:26,360 Speaker 1: stock trading flow so even kind of if you look 238 00:12:26,440 --> 00:12:29,720 Speaker 1: beneath that, this will also be better business for brokers 239 00:12:29,720 --> 00:12:33,160 Speaker 1: and market makers to just like higher volumes. Actually, that's 240 00:12:33,160 --> 00:12:34,680 Speaker 1: one of the fascinating things here is that a lot 241 00:12:34,760 --> 00:12:36,800 Speaker 1: of this is built on the fact that trading costs 242 00:12:36,800 --> 00:12:38,680 Speaker 1: have been driven so well so that one of the 243 00:12:38,679 --> 00:12:41,760 Speaker 1: reasons you can do this is that, um, you know, 244 00:12:42,440 --> 00:12:45,359 Speaker 1: at both the institutional level and the retail level. Um, 245 00:12:45,400 --> 00:12:48,160 Speaker 1: all of these fees have like just fallen, fall and fallen. 246 00:12:48,200 --> 00:12:50,520 Speaker 1: And that's one of the reasons that this is this 247 00:12:50,640 --> 00:12:54,400 Speaker 1: is even possible. Um, where do you see that kind 248 00:12:54,400 --> 00:12:56,080 Speaker 1: of playing into the evolution of this, the fact that like, 249 00:12:56,120 --> 00:12:57,480 Speaker 1: I mean I could go on robin Hood and I 250 00:12:57,480 --> 00:13:00,960 Speaker 1: could build an index that's not a pitch by and 251 00:13:01,000 --> 00:13:04,120 Speaker 1: you're not gonna do it, absolutely not my my In fact, 252 00:13:04,120 --> 00:13:08,040 Speaker 1: my two my two robin Hood holdings are a total 253 00:13:08,040 --> 00:13:13,920 Speaker 1: stock market et F and a bond market index. Kind 254 00:13:14,000 --> 00:13:18,600 Speaker 1: has a ring to it. Well just yeah, because like 255 00:13:19,559 --> 00:13:23,319 Speaker 1: go ahead, yeah, because I guess. Um. The other thing 256 00:13:23,320 --> 00:13:26,240 Speaker 1: is everic indexing has been around for a while, but 257 00:13:26,760 --> 00:13:29,079 Speaker 1: it's kind of becoming a big thing because you know, 258 00:13:29,280 --> 00:13:33,160 Speaker 1: as Pat mentioned, um, with trading getting so cheap and 259 00:13:33,240 --> 00:13:36,720 Speaker 1: fractional shares, you can now offer this to people with 260 00:13:37,200 --> 00:13:40,480 Speaker 1: much less assets. And I mean there's still a threshold 261 00:13:40,520 --> 00:13:43,040 Speaker 1: of maybe a hundred thousand dollars. And of course, um, 262 00:13:43,160 --> 00:13:45,679 Speaker 1: there's a tax benefits and makes more sense if this 263 00:13:45,760 --> 00:13:49,640 Speaker 1: is an a taxable account. But this is going a 264 00:13:49,640 --> 00:13:52,120 Speaker 1: lot more mainstream than it used to be. Can anybody 265 00:13:52,160 --> 00:13:54,559 Speaker 1: do it? Just quickly, got about twenty seconds left here, Justina. 266 00:13:54,640 --> 00:13:58,679 Speaker 1: Can anybody create their own index? Yeah? I mean if 267 00:13:58,760 --> 00:14:01,480 Speaker 1: you have kind of quite a bit of money and 268 00:14:01,559 --> 00:14:03,559 Speaker 1: talk to your financial advisor. I'm sure a lot of 269 00:14:03,640 --> 00:14:06,240 Speaker 1: them want to sell this studio. Okay, so not anybody 270 00:14:06,240 --> 00:14:07,400 Speaker 1: can do it. You have to have quite a lot 271 00:14:07,400 --> 00:14:10,120 Speaker 1: of money. Okay, That's what we wanted to know, Justina. 272 00:14:10,160 --> 00:14:13,400 Speaker 1: Thanks so much, Justina Lee. She's markets reporter. She's also 273 00:14:13,480 --> 00:14:17,160 Speaker 1: Quantz reporter here at Bloomberg News on the phone from 274 00:14:17,160 --> 00:14:19,520 Speaker 1: London along with our Patigney or Markets and Finance editor 275 00:14:19,640 --> 00:14:22,840 Speaker 1: Bloomberg business Week. This story. Read it in its entirety 276 00:14:22,880 --> 00:14:24,840 Speaker 1: at Bloomberg dot com, business Week dot com on the 277 00:14:24,880 --> 00:14:27,480 Speaker 1: Bloomberg terminal end, in the new issue of the Business 278 00:14:27,480 --> 00:14:29,400 Speaker 1: Week magazine that will be out later this week. It's 279 00:14:29,400 --> 00:14:32,360 Speaker 1: also Today's Big Take, one big piece of journalism from 280 00:14:32,360 --> 00:14:34,600 Speaker 1: around the world. You can read it at Bloomberg dot com. 281 00:14:34,640 --> 00:14:37,320 Speaker 1: I love how the markets evolve and how you invest evolves. 282 00:14:42,080 --> 00:14:45,560 Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and 283 00:14:45,640 --> 00:14:50,440 Speaker 1: Bloomberg Quick Takes. Tim Stenovian on Bloomberg Radio. Alright, folks, tennis, 284 00:14:50,720 --> 00:14:53,280 Speaker 1: it's a really big deal in China, some fourteen million 285 00:14:53,320 --> 00:14:56,400 Speaker 1: people play regularly, almost one quarter of the global total. 286 00:14:56,440 --> 00:14:59,640 Speaker 1: According to some reporting by Andy Brown, it's been in 287 00:14:59,720 --> 00:15:02,920 Speaker 1: a work in a lucrative market for the Women's Tennis Association. 288 00:15:03,000 --> 00:15:05,560 Speaker 1: So why why did they walk away? What does it 289 00:15:05,600 --> 00:15:08,320 Speaker 1: mean for other international businesses that operate in China? I 290 00:15:08,360 --> 00:15:10,920 Speaker 1: mentioned Andy Brown, He wrote about it in his Saturday 291 00:15:10,960 --> 00:15:13,840 Speaker 1: New Economy column. He joins us on the phone in 292 00:15:13,880 --> 00:15:16,960 Speaker 1: New York City. He's the Bloomberg New Economy editorial director. Andy. 293 00:15:17,040 --> 00:15:19,920 Speaker 1: Good to have you here again on Bloomberg Radio with 294 00:15:19,960 --> 00:15:22,640 Speaker 1: Tim and myself. You write about how a tennis star 295 00:15:22,720 --> 00:15:26,800 Speaker 1: may really hurt China. First of all, remind us by 296 00:15:26,800 --> 00:15:28,320 Speaker 1: a story that I think it's safe to say that 297 00:15:28,360 --> 00:15:32,440 Speaker 1: a lot of us have been riveted by it. Yeah, 298 00:15:32,560 --> 00:15:35,880 Speaker 1: it um. The story is that the w t A 299 00:15:36,160 --> 00:15:39,400 Speaker 1: and Steve Simon the Commission to have stood up for 300 00:15:39,480 --> 00:15:45,960 Speaker 1: principle in China, and UM present a rare case of 301 00:15:46,040 --> 00:15:51,480 Speaker 1: a business that you know, has put principal first over profits. 302 00:15:52,280 --> 00:15:56,000 Speaker 1: We've had numerous examples of businesses that have come under attack, 303 00:15:56,800 --> 00:16:02,480 Speaker 1: uh in China. I mean, marry at Hotel, Mercedes Bands, Versacchi, 304 00:16:02,720 --> 00:16:09,600 Speaker 1: Valentino coach um for crossing China's red lines, and all 305 00:16:09,640 --> 00:16:13,920 Speaker 1: of them have reflexively groveled and come up with these 306 00:16:14,040 --> 00:16:17,800 Speaker 1: sort of trembling apologies because in the end they don't 307 00:16:17,840 --> 00:16:20,280 Speaker 1: want to sacrifice their business in China. What happened obviously 308 00:16:20,280 --> 00:16:21,360 Speaker 1: in the case of the w g d A, you 309 00:16:21,440 --> 00:16:26,080 Speaker 1: had a theme Chinese female tennis punk fly. She comes out, 310 00:16:26,120 --> 00:16:30,440 Speaker 1: she's making allegations of sexual abuse assault against a senior 311 00:16:30,520 --> 00:16:34,640 Speaker 1: retired leader, and the w t A back her up. 312 00:16:35,320 --> 00:16:37,800 Speaker 1: How is this different or? Actually, Andy, what I want 313 00:16:37,800 --> 00:16:39,520 Speaker 1: to ask you is if this represents some sort of 314 00:16:39,560 --> 00:16:42,520 Speaker 1: sea change in the way that American organizations doing business 315 00:16:42,520 --> 00:16:44,720 Speaker 1: in China will act. I mean, and you write about 316 00:16:44,720 --> 00:16:46,920 Speaker 1: the difference between this and what the NBA did just 317 00:16:47,000 --> 00:16:50,160 Speaker 1: a couple of years ago. Yeah, you'd have to wonder 318 00:16:50,200 --> 00:16:53,880 Speaker 1: whether the n B a um you know, at himself 319 00:16:53,960 --> 00:16:57,240 Speaker 1: or would have responded in quite the same way. Um. 320 00:16:57,280 --> 00:16:58,880 Speaker 1: You know, first of all, they came out and and 321 00:16:58,920 --> 00:17:01,840 Speaker 1: it was a pretty bad response. When Darryl Morey, was 322 00:17:01,840 --> 00:17:05,439 Speaker 1: then running the Houston Rockets, came out and tweeted his 323 00:17:05,560 --> 00:17:09,080 Speaker 1: support for Hong Kong. But then they came out when 324 00:17:09,119 --> 00:17:10,800 Speaker 1: they sort of they sort of folded, they came up 325 00:17:10,800 --> 00:17:13,159 Speaker 1: with another statement in Chinese that said these comments have 326 00:17:13,280 --> 00:17:17,520 Speaker 1: been irresponsible. Um. Look, I think I think the w 327 00:17:17,760 --> 00:17:20,560 Speaker 1: t A in a sense of set a new standard 328 00:17:20,640 --> 00:17:24,080 Speaker 1: for corporate behavior in China against which other companies and 329 00:17:24,119 --> 00:17:28,560 Speaker 1: other sports leagues are now going to be judged. I 330 00:17:28,680 --> 00:17:32,399 Speaker 1: don't think it means that, you know, companies from Nike 331 00:17:32,640 --> 00:17:35,520 Speaker 1: to Starbucks who were all making a bundle in China 332 00:17:35,560 --> 00:17:39,840 Speaker 1: are going to start start getting themselves all anguished about 333 00:17:40,000 --> 00:17:43,120 Speaker 1: human rights and Gina and and thinking about pulling out. 334 00:17:43,280 --> 00:17:46,800 Speaker 1: Not at all. But I think it could well be 335 00:17:46,840 --> 00:17:50,280 Speaker 1: the case that businesses that don't actually have to be 336 00:17:50,880 --> 00:17:53,240 Speaker 1: in China, they are not making a lot of money 337 00:17:53,240 --> 00:17:56,520 Speaker 1: in China, they're in a sensitive area, sensitive from a 338 00:17:56,560 --> 00:18:00,880 Speaker 1: political perspective, human rights perspective. For instance, in the media industry, 339 00:18:01,119 --> 00:18:03,640 Speaker 1: we could well see exits, and in fact we are 340 00:18:03,720 --> 00:18:10,000 Speaker 1: seeing exit LinkedIn packed Up, Gone Going, um Yahoo another example. Right, 341 00:18:10,080 --> 00:18:13,520 Speaker 1: So it is going to have an impact, I think, 342 00:18:14,040 --> 00:18:17,520 Speaker 1: in some way on just about every business that is 343 00:18:17,560 --> 00:18:19,960 Speaker 1: in China, foreign business in the country. And you talk 344 00:18:20,040 --> 00:18:23,720 Speaker 1: with so many CEOs and leaders global leaders. UM about 345 00:18:23,720 --> 00:18:26,159 Speaker 1: the relationship between US and China. When does walk the 346 00:18:26,240 --> 00:18:30,440 Speaker 1: talk really matter? Um? You know, I feel like we've 347 00:18:30,440 --> 00:18:33,040 Speaker 1: had so many conversations, whether it was with George Floyd 348 00:18:33,160 --> 00:18:36,680 Speaker 1: or U S China relations and inequities and people saying 349 00:18:36,680 --> 00:18:38,199 Speaker 1: we've got to do bet our company is saying we 350 00:18:38,200 --> 00:18:41,480 Speaker 1: have to do better. And yet I think about US China, 351 00:18:41,640 --> 00:18:43,879 Speaker 1: you don't see a lot of companies, especially when you're 352 00:18:43,920 --> 00:18:45,800 Speaker 1: talking about the amount of money that they can make 353 00:18:46,280 --> 00:18:48,680 Speaker 1: in the Chinese market. Still you don't see a lot, 354 00:18:49,200 --> 00:18:52,960 Speaker 1: you know, pulling out, even though there's some really egregious 355 00:18:53,080 --> 00:18:56,119 Speaker 1: things that happened in China. So when does it matter 356 00:18:56,320 --> 00:19:01,280 Speaker 1: on a corporate level? Yeah, Look, before we elevate the 357 00:19:01,440 --> 00:19:05,520 Speaker 1: w t A to the saint hood, it's it's probably 358 00:19:05,640 --> 00:19:09,480 Speaker 1: worth saying that the w t A would have taken 359 00:19:09,520 --> 00:19:14,000 Speaker 1: a cold hard look at the business consequences of of 360 00:19:14,040 --> 00:19:18,720 Speaker 1: pulling out of China. Um. You know, it's not automatic 361 00:19:18,880 --> 00:19:23,800 Speaker 1: that the financial future of women's tennis is in China. 362 00:19:23,880 --> 00:19:27,320 Speaker 1: Ask the p g A. It wasn't that long ago 363 00:19:27,640 --> 00:19:30,760 Speaker 1: that China was building golf courses all over the place 364 00:19:31,119 --> 00:19:34,760 Speaker 1: and the biggest names in golf from Um, you know, 365 00:19:34,840 --> 00:19:39,000 Speaker 1: Jack Nicholas to Gary Player, we're all coming into design courses. 366 00:19:39,200 --> 00:19:41,159 Speaker 1: Dent Thing comes into power into a thousand and twelve 367 00:19:41,560 --> 00:19:44,520 Speaker 1: and closes a whole bunch of them down. He doesn't 368 00:19:44,600 --> 00:19:49,440 Speaker 1: like golf. It's bourgeois, and you know, and and and 369 00:19:49,440 --> 00:19:51,679 Speaker 1: and the game takes a big, big dive and by 370 00:19:51,720 --> 00:19:56,479 Speaker 1: the way, revives spectacularly in the United States. Just reasons. 371 00:19:56,520 --> 00:19:58,520 Speaker 1: So so you know, they would have looked at that. 372 00:19:58,640 --> 00:20:02,040 Speaker 1: Nobody's playing Golden nobod playing professional tennis in China anyway. 373 00:20:02,080 --> 00:20:06,600 Speaker 1: The country is in lockdown, and it's entirely possible that 374 00:20:06,800 --> 00:20:09,879 Speaker 1: the tennis could go the same way as golf in China. 375 00:20:09,960 --> 00:20:13,080 Speaker 1: It too is kind of elitist. Hey, Andy, I want 376 00:20:13,080 --> 00:20:16,200 Speaker 1: to bring in what we learned about Ray Dalio's comments 377 00:20:16,200 --> 00:20:19,240 Speaker 1: over the weekend, because last year he found himself the 378 00:20:19,560 --> 00:20:22,159 Speaker 1: last week excuse me, after an interview on CNBC, he 379 00:20:22,200 --> 00:20:25,280 Speaker 1: found himself the target of criticism. He said over the 380 00:20:25,280 --> 00:20:29,360 Speaker 1: weekend that his comments on China human rights were misunderstood. 381 00:20:29,520 --> 00:20:33,199 Speaker 1: So we do see UH portfolio managers founder of water 382 00:20:33,240 --> 00:20:36,720 Speaker 1: Bridgewater for example, UH in hot water as well. As 383 00:20:36,760 --> 00:20:39,720 Speaker 1: a result of this, Yeah, he came in for a 384 00:20:39,960 --> 00:20:44,280 Speaker 1: norm of criticism essentially growing an equivalence between you know, 385 00:20:44,480 --> 00:20:47,920 Speaker 1: dodgy human rights in the United States and human rights 386 00:20:47,960 --> 00:20:51,840 Speaker 1: abuses inside. And Andrew rosso And sort of challenges him, 387 00:20:51,840 --> 00:20:53,600 Speaker 1: and he says, yeah, but you know, there's all kinds 388 00:20:53,600 --> 00:20:57,440 Speaker 1: of things wrong with with us, with with the United States, 389 00:20:57,520 --> 00:21:00,200 Speaker 1: but nobody is getting disappeared, And and then he goes 390 00:21:00,200 --> 00:21:02,239 Speaker 1: off on a long riff about how this is just 391 00:21:02,320 --> 00:21:05,760 Speaker 1: sort of strict, China's being a strict parent. And if 392 00:21:05,800 --> 00:21:08,280 Speaker 1: the storm of criticism not least by the way, from 393 00:21:08,280 --> 00:21:11,600 Speaker 1: his number two, David McCormick, who evidently is weighing a 394 00:21:11,680 --> 00:21:15,399 Speaker 1: run for Senate from from Virginia, you cannot run the 395 00:21:15,400 --> 00:21:20,240 Speaker 1: public office in China now without being a kind of hawk. 396 00:21:20,640 --> 00:21:22,320 Speaker 1: And you know, a lot of this comes down to 397 00:21:22,840 --> 00:21:26,040 Speaker 1: public opinion that Ray Dalio just doesn't have the public 398 00:21:26,119 --> 00:21:28,760 Speaker 1: on your side. You know, seventy six percent of Americans 399 00:21:28,800 --> 00:21:31,399 Speaker 1: take a very negative view on China, according to the 400 00:21:31,480 --> 00:21:37,399 Speaker 1: latest Pew survey. Interesting developments, Um a great column as always, Andy, 401 00:21:37,440 --> 00:21:40,440 Speaker 1: Thank you so much, really appreciate. Bloomberg New Economy editorial 402 00:21:40,480 --> 00:21:42,600 Speaker 1: director Andy Brown on the phone in New York City. 403 00:21:42,600 --> 00:21:44,880 Speaker 1: Can check out his column. Just head to Bloomberg Dot 404 00:21:44,920 --> 00:21:49,320 Speaker 1: com or. Also you can search on the Bloomberg You 405 00:21:49,359 --> 00:21:51,520 Speaker 1: can also sign up for the New Economy daily newsletter 406 00:21:51,560 --> 00:21:55,280 Speaker 1: at Bloomberg dot com slash New Economy. Um. I read 407 00:21:55,320 --> 00:21:57,640 Speaker 1: him every day. It's a great raid and definitely check 408 00:21:57,640 --> 00:21:59,480 Speaker 1: it out of the global issues they're always dealing with. 409 00:22:00,359 --> 00:22:03,920 Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and 410 00:22:04,040 --> 00:22:11,240 Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Yeah, but 411 00:22:11,359 --> 00:22:13,720 Speaker 1: you let me drive. Oh no, no, no no, this 412 00:22:13,760 --> 00:22:17,879 Speaker 1: is not a toy home. All right, please, I'll do 413 00:22:17,920 --> 00:22:24,040 Speaker 1: good riding revels. I want to drive. It's a good question. 414 00:22:27,840 --> 00:22:34,280 Speaker 1: This is the drive to the Globe. Mun on Bloomberg Radio. 415 00:22:34,720 --> 00:22:36,520 Speaker 1: Just about ten and a half minutes left in today's 416 00:22:36,560 --> 00:22:39,160 Speaker 1: trading session, getting ready to wrap up this Monday day 417 00:22:39,240 --> 00:22:42,240 Speaker 1: of trading, and you've got you just heard from Doud 418 00:22:42,280 --> 00:22:44,960 Speaker 1: Prisoner Equity Averages. We've got a rally underway and we're 419 00:22:44,960 --> 00:22:47,760 Speaker 1: hovering just off actually our best levels of the session, 420 00:22:47,800 --> 00:22:51,040 Speaker 1: but broad based with industrials, energy, at materials and consumer staples. 421 00:22:51,040 --> 00:22:53,719 Speaker 1: You're out performers. So let's get to it. Bradwick Bill 422 00:22:53,800 --> 00:22:56,600 Speaker 1: and his chief investment officer at Commonwealth Financial Network he 423 00:22:56,720 --> 00:23:00,480 Speaker 1: joins us on the phone from Waltham, Massachusetts. Commonwealth does 424 00:23:00,520 --> 00:23:04,480 Speaker 1: approximately two point two point five at billion dollars in 425 00:23:04,800 --> 00:23:08,920 Speaker 1: assets under management. Brad, how are you great to talk 426 00:23:08,960 --> 00:23:10,600 Speaker 1: to you, Tim, Yeah, it's good to have you back 427 00:23:10,640 --> 00:23:12,600 Speaker 1: with us. Hey, help us make sense of what to 428 00:23:12,640 --> 00:23:15,399 Speaker 1: think on a day like today where we see you know, 429 00:23:15,440 --> 00:23:17,560 Speaker 1: as as as we said, as we talked to Vincignarella 430 00:23:17,600 --> 00:23:19,360 Speaker 1: earlier in the day, he said, we can't quite call 431 00:23:19,400 --> 00:23:22,960 Speaker 1: it dip buyers coming back in and buying the dip, 432 00:23:23,200 --> 00:23:26,760 Speaker 1: but we're seeing quite a rally after last week's sell off. Well, 433 00:23:26,760 --> 00:23:28,320 Speaker 1: that's the thing. I mean, there was a lot of 434 00:23:28,359 --> 00:23:30,399 Speaker 1: fear out there. There was a lot of worry about 435 00:23:30,400 --> 00:23:32,879 Speaker 1: O Maicron, there was a lot of worry about the 436 00:23:32,960 --> 00:23:35,400 Speaker 1: bed So I think a lot of the people who 437 00:23:35,480 --> 00:23:38,680 Speaker 1: ran away are coming back again. It's not really dip buying, 438 00:23:38,760 --> 00:23:40,879 Speaker 1: it's just kind of adjusting to the news as it 439 00:23:40,920 --> 00:23:43,760 Speaker 1: comes in, which is a good thing. What do you 440 00:23:43,800 --> 00:23:45,800 Speaker 1: make of I know we like to talk equities, and 441 00:23:45,800 --> 00:23:47,040 Speaker 1: I get it, but I also like to talk about 442 00:23:47,040 --> 00:23:49,720 Speaker 1: the fixed income market. Brad, Um, what do you make 443 00:23:49,960 --> 00:23:53,480 Speaker 1: of the tenure seeming to right itself. We've got a 444 00:23:53,520 --> 00:23:56,119 Speaker 1: yield at one point forty two. For it looks like 445 00:23:56,119 --> 00:23:59,119 Speaker 1: that one thirty four that we saw on Friday was 446 00:23:59,200 --> 00:24:02,040 Speaker 1: perhaps a miss, take a false move. It wasn't a 447 00:24:02,040 --> 00:24:04,639 Speaker 1: lot of conviction behind it. But do you agree? And 448 00:24:04,640 --> 00:24:07,800 Speaker 1: then what does that tell us? I do agree because 449 00:24:07,800 --> 00:24:09,960 Speaker 1: I think it's a play in future growth. I mean 450 00:24:10,280 --> 00:24:12,560 Speaker 1: there's a real sense out there with with with the 451 00:24:12,640 --> 00:24:16,560 Speaker 1: ten year staying low, that the bond market is telling 452 00:24:16,640 --> 00:24:18,720 Speaker 1: us that some of this growth we're seeing isn't going 453 00:24:18,760 --> 00:24:20,919 Speaker 1: to last, that the bed is in fact making going 454 00:24:20,960 --> 00:24:23,760 Speaker 1: to make a mistake and that's going to kill the recovering. 455 00:24:23,840 --> 00:24:26,680 Speaker 1: I don't think that's necessarily the case, and I think 456 00:24:26,760 --> 00:24:29,199 Speaker 1: again it's a question that the fear of that grove 457 00:24:29,760 --> 00:24:31,960 Speaker 1: rates down and now that rates are coming back up, 458 00:24:31,960 --> 00:24:35,119 Speaker 1: it's a recognition that, yeah, there's some more durability to 459 00:24:35,240 --> 00:24:37,639 Speaker 1: growth here. And I think, you know, we're not going 460 00:24:37,720 --> 00:24:40,679 Speaker 1: to see inflation collapse. It's going to go down, but 461 00:24:40,840 --> 00:24:43,240 Speaker 1: growth is going to keep it, you know, higher than 462 00:24:43,240 --> 00:24:45,840 Speaker 1: it's bet we're gonna We're gonna get some data this 463 00:24:45,880 --> 00:24:48,760 Speaker 1: week when it when it comes to inflation, I'm wondering, 464 00:24:48,800 --> 00:24:51,239 Speaker 1: what can what numbers are going to concern you know it. 465 00:24:51,880 --> 00:24:54,240 Speaker 1: We're gonna hang on for a second. We forgive us 466 00:24:54,280 --> 00:24:57,399 Speaker 1: everybody and our listeners are a little connection problem there. 467 00:24:57,400 --> 00:24:58,800 Speaker 1: We're gonna try and clean it up with brand and 468 00:24:58,800 --> 00:25:01,000 Speaker 1: then come back to them. Let's more about the markets 469 00:25:01,000 --> 00:25:04,000 Speaker 1: and what exactly is happening in today's trade, Carol, I 470 00:25:04,040 --> 00:25:05,879 Speaker 1: was talking about inflation and the read that we're going 471 00:25:05,920 --> 00:25:08,399 Speaker 1: to get later this week when we get cp I 472 00:25:08,760 --> 00:25:11,680 Speaker 1: six headline read on CPI, that's what's expected. That could 473 00:25:11,680 --> 00:25:14,760 Speaker 1: be the high if if that happens, Hyacinth. Two things. 474 00:25:14,800 --> 00:25:17,720 Speaker 1: First of all, it's not the Fed's preferred measure of inflation, right, 475 00:25:17,760 --> 00:25:20,480 Speaker 1: we know core PC is. And the second thing I 476 00:25:20,480 --> 00:25:22,520 Speaker 1: would say, and this is thanks to Mike McKee, who 477 00:25:22,640 --> 00:25:24,440 Speaker 1: is my go to when it comes to all things 478 00:25:24,520 --> 00:25:29,040 Speaker 1: global economy. But it's going to be premicon data, so 479 00:25:29,280 --> 00:25:31,119 Speaker 1: you know what I mean. So the impact and the 480 00:25:31,160 --> 00:25:33,600 Speaker 1: worries are not going to be reflected in those data points. 481 00:25:33,920 --> 00:25:37,800 Speaker 1: So I think it makes me think, well, I don't 482 00:25:37,800 --> 00:25:39,960 Speaker 1: know if the markets will pay as much attention. It 483 00:25:40,000 --> 00:25:43,040 Speaker 1: probably will because it'll be like whoa, you know what, staggering, 484 00:25:43,080 --> 00:25:44,480 Speaker 1: But do you know what I'm saying, like you need 485 00:25:44,480 --> 00:25:46,800 Speaker 1: to put it in in a little perspective. Okay, fair, But 486 00:25:47,000 --> 00:25:50,480 Speaker 1: here's how I'll push back a little bit. Um. What 487 00:25:50,680 --> 00:25:53,000 Speaker 1: is the best way to understand if our behavior has 488 00:25:53,080 --> 00:25:56,560 Speaker 1: changed because of macron? Meaning? What? Meaning that this is 489 00:25:56,600 --> 00:25:59,359 Speaker 1: the third time we've heard about a variant and we 490 00:25:59,440 --> 00:26:01,639 Speaker 1: are we are resilient. We have been resilient as far 491 00:26:01,680 --> 00:26:04,800 Speaker 1: as spending money goes. And what we know now about 492 00:26:04,800 --> 00:26:06,520 Speaker 1: the virus is a lot different than what we knew 493 00:26:06,560 --> 00:26:08,720 Speaker 1: eighteen months ago. So are we changing the way we're 494 00:26:08,760 --> 00:26:12,840 Speaker 1: doing things? Perhaps? Perhaps? Right? But look at what travel 495 00:26:12,880 --> 00:26:14,760 Speaker 1: stocks are doing today, look at what reopening stocks are 496 00:26:14,800 --> 00:26:19,480 Speaker 1: doing today? Right? Right? No? Uh, fair enough? I guess 497 00:26:19,520 --> 00:26:22,040 Speaker 1: I just think that those data points that come out, 498 00:26:22,640 --> 00:26:24,919 Speaker 1: you know, I don't know if it will be telling 499 00:26:25,000 --> 00:26:27,120 Speaker 1: us that much, but I know what you're saying. That's 500 00:26:27,119 --> 00:26:29,360 Speaker 1: a good point. Your point is like, we figured it out, 501 00:26:29,359 --> 00:26:31,800 Speaker 1: we know how to do this. It's not it's not 502 00:26:31,880 --> 00:26:34,439 Speaker 1: March and everything shutting down and we don't know what 503 00:26:34,520 --> 00:26:36,440 Speaker 1: to do exactly. So it's a fair point. Okay, Let's 504 00:26:36,440 --> 00:26:39,800 Speaker 1: bring in Brad McMillan, chief investment officer at Commonwealth Financial Network. 505 00:26:39,800 --> 00:26:42,840 Speaker 1: We were working on a line apologies to our listeners 506 00:26:42,880 --> 00:26:45,320 Speaker 1: and to our viewers as well. Brad, what do How 507 00:26:45,359 --> 00:26:47,240 Speaker 1: should we watch inflation? Carol and I were just talking 508 00:26:47,280 --> 00:26:48,800 Speaker 1: about it. How should we watch these numbers we got 509 00:26:48,840 --> 00:26:52,600 Speaker 1: on Friday? I think the real question is is it 510 00:26:52,680 --> 00:26:54,480 Speaker 1: going to spike up further or is it going to 511 00:26:54,600 --> 00:26:57,040 Speaker 1: roll over and start to come down. That's what I'm 512 00:26:57,080 --> 00:27:00,920 Speaker 1: watching for a lot of the factors that were driving inflation. 513 00:27:01,000 --> 00:27:03,920 Speaker 1: We saw the excess demand from the federal stimulus programs. 514 00:27:03,960 --> 00:27:08,080 Speaker 1: We saw the constraints and supply chains. Those aren't going away, 515 00:27:08,119 --> 00:27:10,640 Speaker 1: But are they getting worse or better? And I'm looking 516 00:27:10,680 --> 00:27:14,560 Speaker 1: to see if there's science it's getting better. Where is 517 00:27:14,600 --> 00:27:17,840 Speaker 1: all the spending coming from. I'm a little confused. And 518 00:27:18,000 --> 00:27:21,960 Speaker 1: people just sock away so much money, knows, you know 519 00:27:22,000 --> 00:27:23,639 Speaker 1: what I mean. I don't quite get it because we 520 00:27:23,680 --> 00:27:27,639 Speaker 1: know the government programs right have largely stopped. And I 521 00:27:27,760 --> 00:27:30,840 Speaker 1: just wonder, Brad, like, is it just people saved up 522 00:27:30,960 --> 00:27:34,080 Speaker 1: so much and they're continuing to just draw upon that 523 00:27:35,160 --> 00:27:37,360 Speaker 1: because the job market getting better, but we still see 524 00:27:37,359 --> 00:27:39,720 Speaker 1: a lot of people that aren't working. I just don't 525 00:27:39,840 --> 00:27:44,200 Speaker 1: understand it. I think part of it, Carol is absolutely 526 00:27:44,240 --> 00:27:46,639 Speaker 1: we're still spending off some of the savings from the 527 00:27:46,680 --> 00:27:50,240 Speaker 1: stimulus programs, but beyond that, because that's going to go away. 528 00:27:50,440 --> 00:27:54,479 Speaker 1: But what people aren't realizing is we're seeing average weekly 529 00:27:54,520 --> 00:27:56,919 Speaker 1: income go up at a rate of about eight percent 530 00:27:56,960 --> 00:28:01,640 Speaker 1: a year. And that's something that is people are making 531 00:28:01,680 --> 00:28:05,840 Speaker 1: more money. Those wage increases are getting spent, and that 532 00:28:05,920 --> 00:28:09,399 Speaker 1: growth is likely to even accelerate, you know, as wage 533 00:28:09,400 --> 00:28:12,119 Speaker 1: increases go up and hiring goes up. That's not going away. 534 00:28:14,280 --> 00:28:20,320 Speaker 1: So what does what does concern you? What concerns me 535 00:28:20,440 --> 00:28:25,159 Speaker 1: most is the supply chain. At this point, we've seen 536 00:28:25,720 --> 00:28:29,920 Speaker 1: spending comeback, We've seen confidence. It's still low, but people 537 00:28:29,920 --> 00:28:33,920 Speaker 1: are spending. Can the supply chain Hell, I think it can. 538 00:28:33,960 --> 00:28:37,560 Speaker 1: I think it is, But that's what could break the recovery. Yeah, 539 00:28:37,600 --> 00:28:41,360 Speaker 1: I think. Do you think it's likely? I'm not sure. 540 00:28:41,480 --> 00:28:44,400 Speaker 1: It depends a lot on omicron. You know, it's the 541 00:28:44,480 --> 00:28:46,280 Speaker 1: U S will handle it. I mean, you guys were 542 00:28:46,320 --> 00:28:48,880 Speaker 1: talking about that and I agree with that, But can 543 00:28:48,920 --> 00:28:51,480 Speaker 1: other countries handle it? And that's where the supply chain 544 00:28:51,720 --> 00:28:54,320 Speaker 1: is going to break or not right, and we don't 545 00:28:54,320 --> 00:28:56,360 Speaker 1: see everybody handling it the same way. And I do 546 00:28:56,480 --> 00:29:01,520 Speaker 1: also wonder. Yeah, a lot is still yet to be known, 547 00:29:01,600 --> 00:29:03,000 Speaker 1: and I think I do I think it's safe to 548 00:29:03,040 --> 00:29:04,360 Speaker 1: say that the next two to four weeks are going 549 00:29:04,400 --> 00:29:06,720 Speaker 1: to be key. Hey, Brad, gotta run. Glad we fixed it, 550 00:29:06,800 --> 00:29:09,000 Speaker 1: figured out that tech problem. Brian mcmill and his chief 551 00:29:09,000 --> 00:29:12,360 Speaker 1: investment officer Combe Financial Network on the phone from Walten 552 00:29:12,840 --> 00:29:17,120 Speaker 1: roughly two thirty two point five billion in assets under management. Alright, folks, 553 00:29:17,200 --> 00:29:19,720 Speaker 1: just a few minutes left in today's trading session, and 554 00:29:19,760 --> 00:29:20,920 Speaker 1: I thought Tim and I were to go to the 555 00:29:20,920 --> 00:29:24,760 Speaker 1: mat over inflation. Just kidding, um. Maybe by the end 556 00:29:24,760 --> 00:29:30,160 Speaker 1: of the week, if that's what happens Friday. Thanks for 557 00:29:30,200 --> 00:29:34,000 Speaker 1: listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, 558 00:29:34,080 --> 00:29:36,240 Speaker 1: or Bloomberg dot com, and you can also listen to 559 00:29:36,240 --> 00:29:38,840 Speaker 1: our radio show at two pm Eastern on Bloomberg Radio 560 00:29:38,960 --> 00:29:41,720 Speaker 1: or watch us on YouTube search Bloomberg Global News