Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
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Speaker 1: Eastern Time on the Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. Some of the key COVID
Speaker 1: headlines that are out there about South Africa, they're surgeon cases, um,
Speaker 1: not overwhelming hospitals so far. In New York City, Mayored
Speaker 1: Bill de Blasio saying the city will become the nation's
Speaker 1: first impose a vaccine mandate on private sector workers starting
Speaker 1: on December twice seven. But as you so rightfully pointed
Speaker 1: out to him, good luck with that, because you're not
Speaker 1: gonna be mayor anymore. Yeah, Eric Adams has his work
Speaker 1: cut off him if he even ends up going through
Speaker 1: with us, right, and we know how much difficulties President
Speaker 1: Biden has in terms of imposing any kind of vaccine mandates.
Speaker 1: One thing we're also watching is what's going on around
Speaker 1: the world, Carol, France, for example, closing its nightclubs for
Speaker 1: four weeks and we'll open vaccinations to children. So different
Speaker 1: stories playing out in different parts of the country, in
Speaker 1: different parts of the world to absolutely. So let's see
Speaker 1: what our next guest has to say. Dr Michael Blas
Speaker 1: is a chief medical officer at Annivasi Blavis excuse me,
Speaker 1: Dr Michael Blavis, chief medical officer at Annivasi Diagnostics. It's uh.
Speaker 1: He's also a practicing emergency department physician, and he joins
Speaker 1: us on the phone in Atlanta, and I just wanted
Speaker 1: to point out global COVID cases are topping two hundred
Speaker 1: sixty eight million deaths, surpassing uh five point two million.
Speaker 1: Just we've stopped doing those numbers, and when I see them,
Speaker 1: it always kind of stops my heart a little bit. Um.
Speaker 1: Dr Blavi's nice to have you here with us. How
Speaker 1: are you, thank you, Carol? Very good pleasure to be
Speaker 1: there with you. Well, tell us a little bit about
Speaker 1: what you guys are seeing in terms of the impact
Speaker 1: of the amicron variant and just generally in society when
Speaker 1: it comes to battling COVID. So I think there's a
Speaker 1: lot of kind of panic and concern. Rightfully, So, the
Speaker 1: last time we had a new variant that there was
Speaker 1: a lot of excitement about that was Delta. On the
Speaker 1: kind of the diagnostic side, there's a lot of I
Speaker 1: wouldn't say excitement, but some concern as well because there
Speaker 1: are so many mutations with the omicron variants. So everyone
Speaker 1: is scrambling to make sure their tests will accurately detect it.
Speaker 1: They're doing all sorts of simulations, and obviously on the
Speaker 1: diagnostic side or on the therapeutic side, everyone is worried
Speaker 1: will our treatments work just as well? And do we
Speaker 1: need to come up with new things? When do we know?
Speaker 1: When will we know? Because so far over the last
Speaker 1: six days, all we've been talking about is we do
Speaker 1: we need more data? We need more data? When do
Speaker 1: we get that data? So unfortunately it just takes time.
Speaker 1: We're really talking about three weeks now that we've been
Speaker 1: aware of it. So the genetic sequencing is almost completely done.
Speaker 1: We have some good data on that, so a lot
Speaker 1: of simulation can occur. For instance, we've looked at it
Speaker 1: and will detect the cases um like things like how well, uh,
Speaker 1: will the virus respond to current treatments. That takes people
Speaker 1: actually being studied, studies being approved and run, so something
Speaker 1: like that can take several months. Obviously, in the next
Speaker 1: few weeks we'll get more of a general idea of
Speaker 1: how severe the diseases or macron is, how quickly it spreads,
Speaker 1: and we'll get uh some news about our any tests
Speaker 1: failing to catch it, so that people will know do
Speaker 1: they have to choose a certain type of test? Are
Speaker 1: they okay? Just getting whatever they're used to getting? All right,
Speaker 1: So we've just got to be patient here in the meantime,
Speaker 1: just be prudent. It sounds like, UM, tell us a
Speaker 1: bit about the work that you guys are doing. You
Speaker 1: have a COVID nineteen test and detector. From what I understand,
Speaker 1: at least on your website, it's not yet cleared nor
Speaker 1: submitted been submitted to the FDA for authorization under the
Speaker 1: Emergency Use Act. Is that correct? That's correct. We're just
Speaker 1: starting our final study with patient enrollment now and hope
Speaker 1: to submit to the FDA in early January. So maybe
Speaker 1: be out on the market in late February or at
Speaker 1: least early March. And it's basically like a massive lab
Speaker 1: PCR that you would find in a hospital, but in
Speaker 1: in a tiny little box and one that gives you
Speaker 1: results in about thirty minutes or less. As well. How
Speaker 1: much does it cost or how might it cost? So
Speaker 1: the device itself, and we can only give ranges per
Speaker 1: FDA regulations. Uh, it might be kind of in the
Speaker 1: two range plus or minus. We haven't made any final decisions,
Speaker 1: and then the device can run up to about three
Speaker 1: thousand to five thousand tests in its lifetime, and how
Speaker 1: much each task costs is something we're still trying to determine.
Speaker 1: We want to bring down the price as much as
Speaker 1: possible to increase access, but obviously there are costs of
Speaker 1: manufacturing involved. So we're thinking probably in the fifty dollar range,
Speaker 1: but that hasn't been decided, and again we can't really
Speaker 1: give out any uh definitive numbers according to the FDA.
Speaker 1: What were your thoughts last week when you heard tries
Speaker 1: and in Biden said that he wants insurance companies to
Speaker 1: our cover at home testing starting in January, So you know,
Speaker 1: obviously as a company, Uh, you get excited about that.
Speaker 1: As an emergency physician who saw hundreds of patients and
Speaker 1: many very sick, I think this is a great idea
Speaker 1: because if we can really interrupt the spread of COVID vaccination,
Speaker 1: we all hope that everybody will get vaccinated, or at
Speaker 1: least you know that over seventy five mark and COVID
Speaker 1: will just go away and you know we'll be saved
Speaker 1: from it. That's not been the case. So the way
Speaker 1: we're going to stop COVID from spreading with each wave
Speaker 1: is to identify as quickly and easily as possible when
Speaker 1: somebody has an infection. So, for instance, I want to
Speaker 1: go to a party with people, I test quickly, easily, accurately,
Speaker 1: and um, then you know I find out on positive. Oops,
Speaker 1: I'm going to stay home. We're not going to infect
Speaker 1: anybody else. So if we can get to that point,
Speaker 1: I think it's really going to make an impact. But
Speaker 1: costs and access are both significant barriers. So people need
Speaker 1: to be able to test at home ideally and be
Speaker 1: able to afford to test. Yeah, I know, so many
Speaker 1: of the conversations that we have certainly have to do
Speaker 1: with the ability to affordable UH and accessible testing certainly
Speaker 1: going forward. Dr Michael blab Us, he's chief medical officer
Speaker 1: Anavasi Diagnostics. He's with us on the phone in Atlanta.
Speaker 1: We think about this. You talked about this a lot test. Well,
Speaker 1: we do weekly tests for our son who's in nursery
Speaker 1: school as part of the you know, the tuition there,
Speaker 1: and we forgot his salive example last week. Well we
Speaker 1: just have to give him an instant test at home.
Speaker 1: But you know the PCRs they're with bottle tests. Yeah,
Speaker 1: you know, it's a good point. This is Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic
Speaker 1: on Bloomberg Radio. You're listening to Bloomberg Business Week with
Speaker 1: Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio.
Speaker 1: All right, so, um, love this story, so kind of them.
Speaker 1: I'm talking about Wall Street It, Tim, it just wants
Speaker 1: to sell a special index just for you. This story
Speaker 1: in the upcoming issue of Bloomberg Business Week magazine. It's
Speaker 1: also Today's Bloomberg Big Take. Pat Rickners, markets and finance
Speaker 1: reporter for Bloomberg Business Week. He's with us in the
Speaker 1: Bloomberg Interactive Broker's studio in New York. Justina Lee wrote
Speaker 1: the story. She's markets reporter at Bloomberg News. She joins
Speaker 1: us on the phone from London. So, the idea of
Speaker 1: investing in passive indexes and you know, those from perhaps
Speaker 1: Vanguard and others that track the SMP five hundred, it's
Speaker 1: been a really good thing for investors pat but not
Speaker 1: necessarily such a great thing for stock pickers. Yeah. You know,
Speaker 1: if I think of the two most tectonic changes in
Speaker 1: investing in my career, it's been m the adoption of
Speaker 1: index funds and then the shift of that to e
Speaker 1: t f s. And one of the things I found
Speaker 1: so fascinating about Justina's story was that, like, this is
Speaker 1: what people on Wall Street really hope will be the
Speaker 1: next step. Uh. In some ways it has all of
Speaker 1: the logic of indexing and ets, but they think it's
Speaker 1: a way that they can preserve an ability to charge
Speaker 1: higher fees. I'm just saying it, where where do you
Speaker 1: see this in its evolution? Right? It's it's kind of interesting,
Speaker 1: like you said, because it has some passive elements, but
Speaker 1: it really has some kind of an active ingredient. Um
Speaker 1: kind of smuggled into it because they kind of start
Speaker 1: what's the clients start with is an index, and then
Speaker 1: they can add and subtract from that list to end
Speaker 1: up with a personalized portfolio. And we're really seeing kind
Speaker 1: of the intersection of like technology as well as UM
Speaker 1: kind of this big personalization trend across a lot of
Speaker 1: other products. You know, if you think about Spotify or
Speaker 1: Netflix every where, I hurry you here. And and the
Speaker 1: question is, I mean, does the same concept also apply
Speaker 1: to investing. Yeah, it is kind of interesting in terms
Speaker 1: of so you basically take it index and you can
Speaker 1: kind of tweak it um. I know it's kind of
Speaker 1: earlier in the game, or is it like talk to
Speaker 1: us about kind of the establishment embracing this form of
Speaker 1: investor ding. So for now, direct indexing runs about three
Speaker 1: fifty billion dollars of assets, so it's so tiny if
Speaker 1: you compare that to the mutual fund or et s industry.
Speaker 1: But we're definitely seeing a lot of big moves all
Speaker 1: around to make this the next big thing. You know,
Speaker 1: we have had acquisitions from Franklin, Templeton, black Rock, Morgan, Stanley, Vanguard,
Speaker 1: even all the biggest names kind of wanting to get
Speaker 1: ahold of this, And I think the question is whether
Speaker 1: this will kind of end up being quite a niche
Speaker 1: product that maybe you can get a bit more fees on,
Speaker 1: and whether or whether it really will end up being
Speaker 1: a threat to E T F the mutual funds. Well,
Speaker 1: you know, in our tis at the top of the show,
Speaker 1: I said, well, is this altruistic like giving the client
Speaker 1: what they want? Or is it capitalistic or a little
Speaker 1: bit of both. Yeah, I think there really is a
Speaker 1: philosophical question here, because you know, the supporters of this day,
Speaker 1: even if the clients are not making the best position,
Speaker 1: you need to enable people to make them. You know,
Speaker 1: for instance, if you you have a client to hate
Speaker 1: s fossil fuel companies, I mean, maybe it's okay for
Speaker 1: them even if they lose a few basis points each
Speaker 1: year in performance. But of course we've also had a
Speaker 1: lot of research over the years showing that it's not
Speaker 1: that great when you let individuals you know, with busy lives,
Speaker 1: um if you worry about their own portfolios. So in
Speaker 1: that sense, I mean, are you actually just empowering uh?
Speaker 1: Investors might have something to say about that. I mean,
Speaker 1: I think there's also been you know, quite influential papers
Speaker 1: in the history of markets that show that even the
Speaker 1: best stock pickers can't repeatedly even after fees, especially after
Speaker 1: fees beat the markets just you know. So, I wonder
Speaker 1: in a in a where it comes when it comes
Speaker 1: down to fees, how much directing indexing will cost, especially
Speaker 1: compared to some passive vehicles. I mean hundred for example,
Speaker 1: more than this year. You could throw that into an
Speaker 1: et F with what like five basis points of a fee, yeah,
Speaker 1: or even lessen that at this point, Um, there isn't
Speaker 1: a lot of transparency in direct indexing fees, but Bloomberg
Speaker 1: Intelligence Estimate did that it's around thirty basis points, which
Speaker 1: is still higher than E T S where you can
Speaker 1: get almost zero at this point. So it is cheaper
Speaker 1: than your old school mutual fund, but it is more
Speaker 1: expensive than you know, the cheapest E T S, which
Speaker 1: I think really is to pitch here you know, somewhere
Speaker 1: have been more expensive but not you know, the cheapest
Speaker 1: of the products. No, that's okay, you know, it's interesting. Um,
Speaker 1: I guess I do wonder it's hard not for Wall
Speaker 1: Street who has been just watching so much of the
Speaker 1: money fly out because of index funds. And I agree
Speaker 1: with Pat. I mean, one of the first things I
Speaker 1: did in my financial journalistic career was producing mutual fund show.
Speaker 1: It was all about playing the strategies and you had
Speaker 1: you know, people were just piling money, uh into mutual funds.
Speaker 1: So it's fascinating how quickly it is evolved to the
Speaker 1: index world. Although John Bogel, you know, bless his soul,
Speaker 1: um and may rest in peace. You know what I
Speaker 1: said years ago, Well, this is the way to go.
Speaker 1: It makes sense. Um, it's a it's a smart strategy.
Speaker 1: But I do wonder about the fees that financial firms
Speaker 1: have been losing because everybody's been throwing money into index funds,
Speaker 1: and how much of that is a big part of it.
Speaker 1: And I guess well, time will tell, right in terms
Speaker 1: of performance. Yeah, and you mentioned fees. But another part is,
Speaker 1: of course, this is going to a few more single
Speaker 1: stock trading flow so even kind of if you look
Speaker 1: beneath that, this will also be better business for brokers
Speaker 1: and market makers to just like higher volumes. Actually, that's
Speaker 1: one of the fascinating things here is that a lot
Speaker 1: of this is built on the fact that trading costs
Speaker 1: have been driven so well so that one of the
Speaker 1: reasons you can do this is that, um, you know,
Speaker 1: at both the institutional level and the retail level. Um,
Speaker 1: all of these fees have like just fallen, fall and fallen.
Speaker 1: And that's one of the reasons that this is this
Speaker 1: is even possible. Um, where do you see that kind
Speaker 1: of playing into the evolution of this, the fact that like,
Speaker 1: I mean I could go on robin Hood and I
Speaker 1: could build an index that's not a pitch by and
Speaker 1: you're not gonna do it, absolutely not my my In fact,
Speaker 1: my two my two robin Hood holdings are a total
Speaker 1: stock market et F and a bond market index. Kind
Speaker 1: has a ring to it. Well just yeah, because like
Speaker 1: go ahead, yeah, because I guess. Um. The other thing
Speaker 1: is everic indexing has been around for a while, but
Speaker 1: it's kind of becoming a big thing because you know,
Speaker 1: as Pat mentioned, um, with trading getting so cheap and
Speaker 1: fractional shares, you can now offer this to people with
Speaker 1: much less assets. And I mean there's still a threshold
Speaker 1: of maybe a hundred thousand dollars. And of course, um,
Speaker 1: there's a tax benefits and makes more sense if this
Speaker 1: is an a taxable account. But this is going a
Speaker 1: lot more mainstream than it used to be. Can anybody
Speaker 1: do it? Just quickly, got about twenty seconds left here, Justina.
Speaker 1: Can anybody create their own index? Yeah? I mean if
Speaker 1: you have kind of quite a bit of money and
Speaker 1: talk to your financial advisor. I'm sure a lot of
Speaker 1: them want to sell this studio. Okay, so not anybody
Speaker 1: can do it. You have to have quite a lot
Speaker 1: of money. Okay, That's what we wanted to know, Justina.
Speaker 1: Thanks so much, Justina Lee. She's markets reporter. She's also
Speaker 1: Quantz reporter here at Bloomberg News on the phone from
Speaker 1: London along with our Patigney or Markets and Finance editor
Speaker 1: Bloomberg business Week. This story. Read it in its entirety
Speaker 1: at Bloomberg dot com, business Week dot com on the
Speaker 1: Bloomberg terminal end, in the new issue of the Business
Speaker 1: Week magazine that will be out later this week. It's
Speaker 1: also Today's Big Take, one big piece of journalism from
Speaker 1: around the world. You can read it at Bloomberg dot com.
Speaker 1: I love how the markets evolve and how you invest evolves.
Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Bloomberg Quick Takes. Tim Stenovian on Bloomberg Radio. Alright, folks, tennis,
Speaker 1: it's a really big deal in China, some fourteen million
Speaker 1: people play regularly, almost one quarter of the global total.
Speaker 1: According to some reporting by Andy Brown, it's been in
Speaker 1: a work in a lucrative market for the Women's Tennis Association.
Speaker 1: So why why did they walk away? What does it
Speaker 1: mean for other international businesses that operate in China? I
Speaker 1: mentioned Andy Brown, He wrote about it in his Saturday
Speaker 1: New Economy column. He joins us on the phone in
Speaker 1: New York City. He's the Bloomberg New Economy editorial director. Andy.
Speaker 1: Good to have you here again on Bloomberg Radio with
Speaker 1: Tim and myself. You write about how a tennis star
Speaker 1: may really hurt China. First of all, remind us by
Speaker 1: a story that I think it's safe to say that
Speaker 1: a lot of us have been riveted by it. Yeah,
Speaker 1: it um. The story is that the w t A
Speaker 1: and Steve Simon the Commission to have stood up for
Speaker 1: principle in China, and UM present a rare case of
Speaker 1: a business that you know, has put principal first over profits.
Speaker 1: We've had numerous examples of businesses that have come under attack,
Speaker 1: uh in China. I mean, marry at Hotel, Mercedes Bands, Versacchi,
Speaker 1: Valentino coach um for crossing China's red lines, and all
Speaker 1: of them have reflexively groveled and come up with these
Speaker 1: sort of trembling apologies because in the end they don't
Speaker 1: want to sacrifice their business in China. What happened obviously
Speaker 1: in the case of the w g d A, you
Speaker 1: had a theme Chinese female tennis punk fly. She comes out,
Speaker 1: she's making allegations of sexual abuse assault against a senior
Speaker 1: retired leader, and the w t A back her up.
Speaker 1: How is this different or? Actually, Andy, what I want
Speaker 1: to ask you is if this represents some sort of
Speaker 1: sea change in the way that American organizations doing business
Speaker 1: in China will act. I mean, and you write about
Speaker 1: the difference between this and what the NBA did just
Speaker 1: a couple of years ago. Yeah, you'd have to wonder
Speaker 1: whether the n B a um you know, at himself
Speaker 1: or would have responded in quite the same way. Um.
Speaker 1: You know, first of all, they came out and and
Speaker 1: it was a pretty bad response. When Darryl Morey, was
Speaker 1: then running the Houston Rockets, came out and tweeted his
Speaker 1: support for Hong Kong. But then they came out when
Speaker 1: they sort of they sort of folded, they came up
Speaker 1: with another statement in Chinese that said these comments have
Speaker 1: been irresponsible. Um. Look, I think I think the w
Speaker 1: t A in a sense of set a new standard
Speaker 1: for corporate behavior in China against which other companies and
Speaker 1: other sports leagues are now going to be judged. I
Speaker 1: don't think it means that, you know, companies from Nike
Speaker 1: to Starbucks who were all making a bundle in China
Speaker 1: are going to start start getting themselves all anguished about
Speaker 1: human rights and Gina and and thinking about pulling out.
Speaker 1: Not at all. But I think it could well be
Speaker 1: the case that businesses that don't actually have to be
Speaker 1: in China, they are not making a lot of money
Speaker 1: in China, they're in a sensitive area, sensitive from a
Speaker 1: political perspective, human rights perspective. For instance, in the media industry,
Speaker 1: we could well see exits, and in fact we are
Speaker 1: seeing exit LinkedIn packed Up, Gone Going, um Yahoo another example. Right,
Speaker 1: So it is going to have an impact, I think,
Speaker 1: in some way on just about every business that is
Speaker 1: in China, foreign business in the country. And you talk
Speaker 1: with so many CEOs and leaders global leaders. UM about
Speaker 1: the relationship between US and China. When does walk the
Speaker 1: talk really matter? Um? You know, I feel like we've
Speaker 1: had so many conversations, whether it was with George Floyd
Speaker 1: or U S China relations and inequities and people saying
Speaker 1: we've got to do bet our company is saying we
Speaker 1: have to do better. And yet I think about US China,
Speaker 1: you don't see a lot of companies, especially when you're
Speaker 1: talking about the amount of money that they can make
Speaker 1: in the Chinese market. Still you don't see a lot,
Speaker 1: you know, pulling out, even though there's some really egregious
Speaker 1: things that happened in China. So when does it matter
Speaker 1: on a corporate level? Yeah, Look, before we elevate the
Speaker 1: w t A to the saint hood, it's it's probably
Speaker 1: worth saying that the w t A would have taken
Speaker 1: a cold hard look at the business consequences of of
Speaker 1: pulling out of China. Um. You know, it's not automatic
Speaker 1: that the financial future of women's tennis is in China.
Speaker 1: Ask the p g A. It wasn't that long ago
Speaker 1: that China was building golf courses all over the place
Speaker 1: and the biggest names in golf from Um, you know,
Speaker 1: Jack Nicholas to Gary Player, we're all coming into design courses.
Speaker 1: Dent Thing comes into power into a thousand and twelve
Speaker 1: and closes a whole bunch of them down. He doesn't
Speaker 1: like golf. It's bourgeois, and you know, and and and
Speaker 1: and the game takes a big, big dive and by
Speaker 1: the way, revives spectacularly in the United States. Just reasons.
Speaker 1: So so you know, they would have looked at that.
Speaker 1: Nobody's playing Golden nobod playing professional tennis in China anyway.
Speaker 1: The country is in lockdown, and it's entirely possible that
Speaker 1: the tennis could go the same way as golf in China.
Speaker 1: It too is kind of elitist. Hey, Andy, I want
Speaker 1: to bring in what we learned about Ray Dalio's comments
Speaker 1: over the weekend, because last year he found himself the
Speaker 1: last week excuse me, after an interview on CNBC, he
Speaker 1: found himself the target of criticism. He said over the
Speaker 1: weekend that his comments on China human rights were misunderstood.
Speaker 1: So we do see UH portfolio managers founder of water
Speaker 1: Bridgewater for example, UH in hot water as well. As
Speaker 1: a result of this, Yeah, he came in for a
Speaker 1: norm of criticism essentially growing an equivalence between you know,
Speaker 1: dodgy human rights in the United States and human rights
Speaker 1: abuses inside. And Andrew rosso And sort of challenges him,
Speaker 1: and he says, yeah, but you know, there's all kinds
Speaker 1: of things wrong with with us, with with the United States,
Speaker 1: but nobody is getting disappeared, And and then he goes
Speaker 1: off on a long riff about how this is just
Speaker 1: sort of strict, China's being a strict parent. And if
Speaker 1: the storm of criticism not least by the way, from
Speaker 1: his number two, David McCormick, who evidently is weighing a
Speaker 1: run for Senate from from Virginia, you cannot run the
Speaker 1: public office in China now without being a kind of hawk.
Speaker 1: And you know, a lot of this comes down to
Speaker 1: public opinion that Ray Dalio just doesn't have the public
Speaker 1: on your side. You know, seventy six percent of Americans
Speaker 1: take a very negative view on China, according to the
Speaker 1: latest Pew survey. Interesting developments, Um a great column as always, Andy,
Speaker 1: Thank you so much, really appreciate. Bloomberg New Economy editorial
Speaker 1: director Andy Brown on the phone in New York City.
Speaker 1: Can check out his column. Just head to Bloomberg Dot
Speaker 1: com or. Also you can search on the Bloomberg You
Speaker 1: can also sign up for the New Economy daily newsletter
Speaker 1: at Bloomberg dot com slash New Economy. Um. I read
Speaker 1: him every day. It's a great raid and definitely check
Speaker 1: it out of the global issues they're always dealing with.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Yeah, but
Speaker 1: you let me drive. Oh no, no, no no, this
Speaker 1: is not a toy home. All right, please, I'll do
Speaker 1: good riding revels. I want to drive. It's a good question.
Speaker 1: This is the drive to the Globe. Mun on Bloomberg Radio.
Speaker 1: Just about ten and a half minutes left in today's
Speaker 1: trading session, getting ready to wrap up this Monday day
Speaker 1: of trading, and you've got you just heard from Doud
Speaker 1: Prisoner Equity Averages. We've got a rally underway and we're
Speaker 1: hovering just off actually our best levels of the session,
Speaker 1: but broad based with industrials, energy, at materials and consumer staples.
Speaker 1: You're out performers. So let's get to it. Bradwick Bill
Speaker 1: and his chief investment officer at Commonwealth Financial Network he
Speaker 1: joins us on the phone from Waltham, Massachusetts. Commonwealth does
Speaker 1: approximately two point two point five at billion dollars in
Speaker 1: assets under management. Brad, how are you great to talk
Speaker 1: to you, Tim, Yeah, it's good to have you back
Speaker 1: with us. Hey, help us make sense of what to
Speaker 1: think on a day like today where we see you know,
Speaker 1: as as as we said, as we talked to Vincignarella
Speaker 1: earlier in the day, he said, we can't quite call
Speaker 1: it dip buyers coming back in and buying the dip,
Speaker 1: but we're seeing quite a rally after last week's sell off. Well,
Speaker 1: that's the thing. I mean, there was a lot of
Speaker 1: fear out there. There was a lot of worry about
Speaker 1: O Maicron, there was a lot of worry about the
Speaker 1: bed So I think a lot of the people who
Speaker 1: ran away are coming back again. It's not really dip buying,
Speaker 1: it's just kind of adjusting to the news as it
Speaker 1: comes in, which is a good thing. What do you
Speaker 1: make of I know we like to talk equities, and
Speaker 1: I get it, but I also like to talk about
Speaker 1: the fixed income market. Brad, Um, what do you make
Speaker 1: of the tenure seeming to right itself. We've got a
Speaker 1: yield at one point forty two. For it looks like
Speaker 1: that one thirty four that we saw on Friday was
Speaker 1: perhaps a miss, take a false move. It wasn't a
Speaker 1: lot of conviction behind it. But do you agree? And
Speaker 1: then what does that tell us? I do agree because
Speaker 1: I think it's a play in future growth. I mean
Speaker 1: there's a real sense out there with with with the
Speaker 1: ten year staying low, that the bond market is telling
Speaker 1: us that some of this growth we're seeing isn't going
Speaker 1: to last, that the bed is in fact making going
Speaker 1: to make a mistake and that's going to kill the recovering.
Speaker 1: I don't think that's necessarily the case, and I think
Speaker 1: again it's a question that the fear of that grove
Speaker 1: rates down and now that rates are coming back up,
Speaker 1: it's a recognition that, yeah, there's some more durability to
Speaker 1: growth here. And I think, you know, we're not going
Speaker 1: to see inflation collapse. It's going to go down, but
Speaker 1: growth is going to keep it, you know, higher than
Speaker 1: it's bet we're gonna We're gonna get some data this
Speaker 1: week when it when it comes to inflation, I'm wondering,
Speaker 1: what can what numbers are going to concern you know it.
Speaker 1: We're gonna hang on for a second. We forgive us
Speaker 1: everybody and our listeners are a little connection problem there.
Speaker 1: We're gonna try and clean it up with brand and
Speaker 1: then come back to them. Let's more about the markets
Speaker 1: and what exactly is happening in today's trade, Carol, I
Speaker 1: was talking about inflation and the read that we're going
Speaker 1: to get later this week when we get cp I
Speaker 1: six headline read on CPI, that's what's expected. That could
Speaker 1: be the high if if that happens, Hyacinth. Two things.
Speaker 1: First of all, it's not the Fed's preferred measure of inflation, right,
Speaker 1: we know core PC is. And the second thing I
Speaker 1: would say, and this is thanks to Mike McKee, who
Speaker 1: is my go to when it comes to all things
Speaker 1: global economy. But it's going to be premicon data, so
Speaker 1: you know what I mean. So the impact and the
Speaker 1: worries are not going to be reflected in those data points.
Speaker 1: So I think it makes me think, well, I don't
Speaker 1: know if the markets will pay as much attention. It
Speaker 1: probably will because it'll be like whoa, you know what, staggering,
Speaker 1: But do you know what I'm saying, like you need
Speaker 1: to put it in in a little perspective. Okay, fair, But
Speaker 1: here's how I'll push back a little bit. Um. What
Speaker 1: is the best way to understand if our behavior has
Speaker 1: changed because of macron? Meaning? What? Meaning that this is
Speaker 1: the third time we've heard about a variant and we
Speaker 1: are we are resilient. We have been resilient as far
Speaker 1: as spending money goes. And what we know now about
Speaker 1: the virus is a lot different than what we knew
Speaker 1: eighteen months ago. So are we changing the way we're
Speaker 1: doing things? Perhaps? Perhaps? Right? But look at what travel
Speaker 1: stocks are doing today, look at what reopening stocks are
Speaker 1: doing today? Right? Right? No? Uh, fair enough? I guess
Speaker 1: I just think that those data points that come out,
Speaker 1: you know, I don't know if it will be telling
Speaker 1: us that much, but I know what you're saying. That's
Speaker 1: a good point. Your point is like, we figured it out,
Speaker 1: we know how to do this. It's not it's not
Speaker 1: March and everything shutting down and we don't know what
Speaker 1: to do exactly. So it's a fair point. Okay, Let's
Speaker 1: bring in Brad McMillan, chief investment officer at Commonwealth Financial Network.
Speaker 1: We were working on a line apologies to our listeners
Speaker 1: and to our viewers as well. Brad, what do How
Speaker 1: should we watch inflation? Carol and I were just talking
Speaker 1: about it. How should we watch these numbers we got
Speaker 1: on Friday? I think the real question is is it
Speaker 1: going to spike up further or is it going to
Speaker 1: roll over and start to come down. That's what I'm
Speaker 1: watching for a lot of the factors that were driving inflation.
Speaker 1: We saw the excess demand from the federal stimulus programs.
Speaker 1: We saw the constraints and supply chains. Those aren't going away,
Speaker 1: But are they getting worse or better? And I'm looking
Speaker 1: to see if there's science it's getting better. Where is
Speaker 1: all the spending coming from. I'm a little confused. And
Speaker 1: people just sock away so much money, knows, you know
Speaker 1: what I mean. I don't quite get it because we
Speaker 1: know the government programs right have largely stopped. And I
Speaker 1: just wonder, Brad, like, is it just people saved up
Speaker 1: so much and they're continuing to just draw upon that
Speaker 1: because the job market getting better, but we still see
Speaker 1: a lot of people that aren't working. I just don't
Speaker 1: understand it. I think part of it, Carol is absolutely
Speaker 1: we're still spending off some of the savings from the
Speaker 1: stimulus programs, but beyond that, because that's going to go away.
Speaker 1: But what people aren't realizing is we're seeing average weekly
Speaker 1: income go up at a rate of about eight percent
Speaker 1: a year. And that's something that is people are making
Speaker 1: more money. Those wage increases are getting spent, and that
Speaker 1: growth is likely to even accelerate, you know, as wage
Speaker 1: increases go up and hiring goes up. That's not going away.
Speaker 1: So what does what does concern you? What concerns me
Speaker 1: most is the supply chain. At this point, we've seen
Speaker 1: spending comeback, We've seen confidence. It's still low, but people
Speaker 1: are spending. Can the supply chain Hell, I think it can.
Speaker 1: I think it is, But that's what could break the recovery. Yeah,
Speaker 1: I think. Do you think it's likely? I'm not sure.
Speaker 1: It depends a lot on omicron. You know, it's the
Speaker 1: U S will handle it. I mean, you guys were
Speaker 1: talking about that and I agree with that, But can
Speaker 1: other countries handle it? And that's where the supply chain
Speaker 1: is going to break or not right, and we don't
Speaker 1: see everybody handling it the same way. And I do
Speaker 1: also wonder. Yeah, a lot is still yet to be known,
Speaker 1: and I think I do I think it's safe to
Speaker 1: say that the next two to four weeks are going
Speaker 1: to be key. Hey, Brad, gotta run. Glad we fixed it,
Speaker 1: figured out that tech problem. Brian mcmill and his chief
Speaker 1: investment officer Combe Financial Network on the phone from Walten
Speaker 1: roughly two thirty two point five billion in assets under management. Alright, folks,
Speaker 1: just a few minutes left in today's trading session, and
Speaker 1: I thought Tim and I were to go to the
Speaker 1: mat over inflation. Just kidding, um. Maybe by the end
Speaker 1: of the week, if that's what happens Friday. Thanks for
Speaker 1: listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
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