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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day, we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast

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Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com Slash podcast. Let's get to our

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Speaker 1: next guest straight away. Danielle di Martino, Booth CEO and

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Speaker 1: chief strategist for Quill Intelligence. Danielle, Yesterday, as I was

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Speaker 1: watching football and eating turkey, I was just kind of

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Speaker 1: flipping through my Twitter feed. I started seeing more and

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Speaker 1: more mentions about this South African varying here and then

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Speaker 1: you wake up this morning and boom, Europe trading off

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Speaker 1: three percent equities. Uh, and here we've got the U

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Speaker 1: S market. How are you trying to contextualize the news

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Speaker 1: that we're getting today about this new variant as it

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Speaker 1: relates to kind of just the overall economic outlook? You know,

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Speaker 1: you know, I keep up this USA Today map of

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Speaker 1: the United States, and two months ago there were only

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Speaker 1: four cases up four states where there were COVID cases growing.

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Speaker 1: I've had to flip the way that I tabulate now

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Speaker 1: there are eleven There are eleven states now with cases falling,

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Speaker 1: and the words the rest of the country has already

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Speaker 1: got COVID cases rising. So I've been watching this pretty

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Speaker 1: closely for the last month. So this has kind of

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Speaker 1: been an accident waiting to happen if there's a new

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Speaker 1: variant that's going to come on top of this. So

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Speaker 1: we've we've already got the bulk of the country. And

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Speaker 1: trust me when I say, my my seventy five year

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Speaker 1: old mother her birthday's Sunday, God lover um. She and

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Speaker 1: her friends, they pay attention to these data. And because

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Speaker 1: we know that the savings, in fact, this was a

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Speaker 1: good terminal story, because we know that the savings are

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Speaker 1: concentrated in the hands of the wealthiest and the oldest,

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Speaker 1: that really has implications for US consumption, which is the economy.

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Speaker 1: Because they pay attention to where COVID cases are rising

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Speaker 1: and where they're not rising. They pay attention to these

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Speaker 1: COVID headlines because they're the ones who who are going

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Speaker 1: to tend to stay home as we head into this

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Speaker 1: critical holiday season. And so Danielle, given that you have

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Speaker 1: been following this closely, and like you said, I mean,

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Speaker 1: this was an accident waiting to happen. If you look

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Speaker 1: at US cases, I'm still curious. I mean, if you

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Speaker 1: do look at the reaction in this stock market right now,

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Speaker 1: I'm looking at the SMP five hundred down almost two percent,

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Speaker 1: biggest drops in September. Is this justified or at what

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Speaker 1: point does this become maybe an overreaction? Well, you know,

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Speaker 1: it's hard to say. I've been watching the movement decks

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Speaker 1: very closely, and that's what I follow much more closely

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Speaker 1: than UM than the VICS index. I followed treasury volatility

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Speaker 1: much more closely. And you know, we've been seeing it

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Speaker 1: in up very very rapidly, so the highest levels since

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Speaker 1: we have the pandemic breakout. So the bond market has

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Speaker 1: been screaming that there's risk in the system for weeks now,

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Speaker 1: and we've seen the yield between the two year and

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Speaker 1: the ten year treasury slam down to one basis points

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Speaker 1: despite the increase in the shorter maturity treasuries, because the

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Speaker 1: markets are concerned. At the FED, my former employer is

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Speaker 1: going to be tightening at a at an increasingly fast

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Speaker 1: pace going into two because even the most devilish as

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Speaker 1: in Mary Daily out of San Francisco have advocated for

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Speaker 1: a quicker tightening to combat the inflation. That I mean,

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Speaker 1: I sent out a tweek that went viral a few

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Speaker 1: days ago. There I've got almost a thousand. Like. All

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Speaker 1: I did was take a photograph of Austin Mayer bacon

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Speaker 1: in Dallas, Texas. It was ian there's something wrong. I

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Speaker 1: saw that. So there's something wrong with inflations. And it's

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Speaker 1: a regressive tax that hurts the lowest income earners the

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Speaker 1: most at a time when there's been no legislation past.

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Speaker 1: And the little cast that is coming to US families,

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Speaker 1: which is the child tax credit, is set to roll

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Speaker 1: off as of the December payment. Daniel Worth, the markets

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Speaker 1: is certainly reacting to this variant news this morning, and

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Speaker 1: actually on some decent volume. We were just noting earlier

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Speaker 1: relative to obviously being a holiday, uh kind of day

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Speaker 1: after on holiday. How do you think the FED looks

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Speaker 1: at data points like you know what we're seeing today? Well,

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Speaker 1: this this is a friendly reminder. Actually it's a very

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Speaker 1: unfriendly reminder to the Fed that they waited too long

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Speaker 1: to tighten and that they're tightening into a slowing economy

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Speaker 1: that was always going to be vulnerable to the next

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Speaker 1: COVID virant, and now that we do have the next

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Speaker 1: code mutation on our hands, that we're that we're staring

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Speaker 1: at again with forties states, with rising cases. It's it's

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Speaker 1: very problematic for the FED to be pressured by politicians

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Speaker 1: and there are quite a few politicis. Politicians have crawled

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Speaker 1: out of their skins. When was the last time in

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Speaker 1: your career you you heard quite a few politicians saying, gee,

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Speaker 1: I think monetary policy needs to be tighter, and yet

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Speaker 1: we have this chorus. So there's a lot of there's

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Speaker 1: a lot of pressure to to to shift the narrative,

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Speaker 1: especially with a hundred thousand print on jobless claims, there's

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Speaker 1: a lot of pressure to shift shift the narrative away

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Speaker 1: from maximum inclusive employment back to inflation. Yeah. Absolutely, definitely

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Speaker 1: a tight wire act for high wire act for the

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Speaker 1: FED continues. Danielle de Martino Booth, thank you so much

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Speaker 1: for joining us. We really appreciate getting your perspective here,

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Speaker 1: your learned perspective here on kind of a new kind

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Speaker 1: of a you know, monkey wrench thrown into this market

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Speaker 1: and economic outlook. Daniel DeMartino Booth and chief strategist at

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Speaker 1: Quinn Intelligence. Also, as she mentioned earlier, former advisor at

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Speaker 1: the Federal Reserve Bank of Dallas. So we always appreciate

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Speaker 1: getting Danielle's view of the markets and of what this

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Speaker 1: Federal Reserve may do big risk off day. Today's Charlie

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Speaker 1: was just reporting let's get a look at what's happening

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Speaker 1: with the small cap stocks. We do that every day

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Speaker 1: at this time with Bloodmark Sucks editor Davilson. How's it going, Dave?

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Speaker 1: Not well? I'm short. I mean the Russell two thousand

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Speaker 1: down almost four and a half percent. That's more than

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Speaker 1: twice as much as the today's trade. Energy stocks weighing

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Speaker 1: on the Russell is all prices tumble. Uh. The index

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Speaker 1: steepest decline belongs to Calan Patroleum, whose ticker is CPN

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Speaker 1: or CPE. I'm sorry, Uh, that stock down nineteen percent.

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Speaker 1: Laredo Petroleum ticker l p I is down seventy and

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Speaker 1: a half percent. Matt Or Resources ticker mt d R

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Speaker 1: is down thirty and a half percent. Hotel the resort

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Speaker 1: owners are lower as well. Part of order decline among

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Speaker 1: travel stocks, Ashford Hospitality Trust ticker HT is down sixteen percent,

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Speaker 1: and the Grand Old Operies owner Ryman Hospitality ticker r

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Speaker 1: HP is down about eleven and a half percent. Now

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Speaker 1: two of the Rustle's biggest games belongs to companies that

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Speaker 1: were named to the SMP small Caps six hundred indecks

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Speaker 1: late Wednesday. Uh. They'll join that benchmark before uh next

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Speaker 1: week's open on Thursday, U and one of them is

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Speaker 1: cars dot Com ticker c a r s UH. The

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Speaker 1: automotive side is up eighteen percent and UH the other

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Speaker 1: is engineering company n V five. Glow will take her

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Speaker 1: envy e e and that stock hired by about all right,

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Speaker 1: Bloomberking stock seditor Dave Wilson, thank you so much. We

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Speaker 1: appreciate it. All right, Black Friday people are shopping, you know.

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Speaker 1: I know I'm gonna drive by the Short Hills mall

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Speaker 1: later today and it will be back. The question is

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Speaker 1: how are shopping malls doing in general? How is the

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Speaker 1: real estate in the retail space doing. Let's check in

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Speaker 1: with Jim Sullivan. He's a managing director and reet analysts

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Speaker 1: at B T I G. Jim, thanks so much for

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Speaker 1: joining us here. I know you've been covering the reets

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Speaker 1: for a long time here. There was a time when,

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Speaker 1: you know, you everybody just thought the retail brick and

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Speaker 1: mortar business was literally going out of business. Has that happened? No,

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Speaker 1: absolutely not Uh. And in fact, what we've seen this

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Speaker 1: year is the two major mall red that we cover,

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Speaker 1: Assignment Property Group in mace Rich, they're both up delivered

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Speaker 1: total returns of proximately before today. UM. And they've done

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Speaker 1: so because we've in a strong recovery and retail sales

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Speaker 1: at the stores UM. And it's been consistent really since

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Speaker 1: since going back to March. So UM. You know, the

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Speaker 1: delta variant in August had a little bit of a

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Speaker 1: slight negative impact, but it was short lived UM, and

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Speaker 1: sales growth in September was robust so UM. The result

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Speaker 1: is companies reported their third quarter beating rays quarter for

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Speaker 1: both may Switch and Simon. So the stocks have done

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Speaker 1: very well. And so we were talking to Bloomberg Intelligences

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Speaker 1: who not' goyle earlier in the show, who is at

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Speaker 1: the mall today? Uh? And it sounds like there's plenty

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Speaker 1: of foot traffic. But I'm curious how you think about

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Speaker 1: the risk of you know, these new variants, and in

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Speaker 1: particular this one from South Africa, which we don't yet

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Speaker 1: have a name yet. Maybe that's coming, But I mean,

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Speaker 1: how do you how do you factor that in to

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Speaker 1: your analysis because it almost feels like a black Swan

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Speaker 1: event we don't know which is going to be a

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Speaker 1: really big deal. Well, I think you know the comment

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Speaker 1: you just made is obviously the key. How serious this going,

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Speaker 1: this is going to be? UM? How serious the reaction

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Speaker 1: for those who infected will be in the UM uh

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Speaker 1: you know, how long they'll be um they'll be impacted

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Speaker 1: by that remains to be seen. But if we make

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Speaker 1: the analogy with what happened with the delta variant, which

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Speaker 1: obviously increased infections substantially, UM, and that impacted the third quarter.

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Speaker 1: When we look at the third quarter retail sales numbers,

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Speaker 1: what we see and it will just say, as an example,

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Speaker 1: apparel and accessories, which is kind of the key category

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Speaker 1: for malls and for sales in the malls. You know,

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Speaker 1: back in July UM clothing and clothing accessory stores their

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Speaker 1: sales grew nine versus UM. In August that sales growth

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Speaker 1: fled to eight percent, but in September it was backed

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Speaker 1: up to just over We saw something similar in the

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Speaker 1: hotel business as well, where we did see some travel

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Speaker 1: numbers decline, and we saw that hotel occupancy rates and

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Speaker 1: room rates slid at the same time in the same

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Speaker 1: way and had a similar recovery. So that was the

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Speaker 1: impact of the delta variant. Now, whether this variant is

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Speaker 1: going to have a more severe impact or not remains

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Speaker 1: to be seen with waiting for the information to see

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Speaker 1: what impact it will have on sales. But if we

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Speaker 1: make the analogy with the delta variant, it was about

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Speaker 1: a thirty day impact. Jim, there's a you know, school

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Speaker 1: thought out there in a retail that the the US

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Speaker 1: is still overstored. What what what are you three companies

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Speaker 1: that you fall say about that? Will there be a

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Speaker 1: lot more closures? Um? I don't think so. I mean

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Speaker 1: I've been following this space for a long time, as

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Speaker 1: you noted, and I think as long as I've followed,

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Speaker 1: if two things have always been true. One is this

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Speaker 1: too much retail square footage when you look at square

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Speaker 1: feet per capita in the country versus other major markets. However,

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Speaker 1: there's never been enough of the best space. So you

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Speaker 1: had mentioned um in your prepared comments. The Short Hills Mall,

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Speaker 1: the short Hills mall cannot be expanded anymore. Um it

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Speaker 1: is um it is capped out in terms of square footage,

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Speaker 1: and yet in the zip code that its services has

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Speaker 1: been a substantial amount of wealth created obviously over the

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Speaker 1: last one to two years, both in terms of real

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Speaker 1: estate prices and equity market prices. So spending power is

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Speaker 1: increased and you have the square footage has it, so

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Speaker 1: the result should be better productivity for the malls that

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Speaker 1: are located in the best zip codes, and particularly big

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Speaker 1: malls and suburban markets cannot be expanded. Jim, thank you

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Speaker 1: so much for joining us. Really appreciate it. Jim Sullivan,

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Speaker 1: Managing director and read analyst at b T I e G.

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Speaker 1: Talking about the mall business again, Folks aren't flocking to

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Speaker 1: the malls. It appears here as we do Black Friday protests. Yeah,

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Speaker 1: we're gona stick here for another two hours with you.

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Speaker 1: We've got these markets just moving pretty dramatically. I want

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Speaker 1: to bring a guy Johnson Bloomberg News from London joining

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Speaker 1: us for the next couple of hours. Guy, you as

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Speaker 1: heady ripping day, very tough day in the footsie of

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Speaker 1: three points six percent today. We were expecting to David

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Speaker 1: to be a day that we would spend our day

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Speaker 1: talking about shopping. Yes, it was meant to be Black Friday.

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Speaker 1: It turns out it's Red Friday. And and we have

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Speaker 1: been yeah, looking at some really brutal numbers. Um this

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Speaker 1: as we try and figure out whether or not actually

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Speaker 1: we are done with COVID, not done with COVID and

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Speaker 1: we got COVID under control, or as COVID got us

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Speaker 1: under control. Certainly today it feels like it is the latter,

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Speaker 1: because this new variant to certainly spook markets. I think

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Speaker 1: it's just a lack of information Paul, that we that

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Speaker 1: we have at the moment that I think it's really

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Speaker 1: spooky people. Everybody thought that they got their arms around

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Speaker 1: understanding what delta and the variant was gonna mean, whether

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Speaker 1: or not we would be able to control it with vaccine. Certainly,

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Speaker 1: the evidence thus far has been that we were doing

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Speaker 1: a fairly good job of that. Yes, we're seeing a

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Speaker 1: pick up in Europe, but in areas where we have

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Speaker 1: seen high vaccination levels, it does seem that we have

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Speaker 1: our arms around it. Today that's been completely thrown out

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Speaker 1: of the window. The real question is does the health

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Speaker 1: care sector had the health care sector seen this one coming.

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Speaker 1: Let's find out. Dr April Capoo, acute nurse practitioner and

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Speaker 1: president of the Association of Nurse Practitioners, joining us. Now, Dr,

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Speaker 1: let's just talk about what we've seen today and what

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Speaker 1: we've learned today. A lot of people in financial markets

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Speaker 1: have been caught by surprise by the emergence of a

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Speaker 1: new variant that is much mutated and as a result,

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Speaker 1: has the potential maybe to evade vaccines, to be more transmissible,

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Speaker 1: to be potentially more deadly. As you, as a health

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Speaker 1: care professional, had you expected like something like something like

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Speaker 1: this would happen, Well, thank you, I agree with you,

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Speaker 1: and I think what we know is that until we

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Speaker 1: have more of our population fully vaccinated, we're going to

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Speaker 1: continue to see the emergence of the variants, and the

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Speaker 1: variants will continue to get more severe, the transmission rate

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Speaker 1: will get higher. We know this because we know this

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Speaker 1: is what happens with viruses, and so we need to

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Speaker 1: get more of the population vaccinated. That's our number one defense.

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Speaker 1: As far as what we're seeing today, still, the patients

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Speaker 1: that are coming into the hospital, um, those the severe disease,

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Speaker 1: those continue to remain the unvaccinated for the most parts

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Speaker 1: or those that are very compromised, and it still remains

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Speaker 1: to be the DELFA variant. Now what we're seeing in

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Speaker 1: South Africa today. Yes, this has been um big breaking

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Speaker 1: news for everyone and we are following it very closely

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Speaker 1: and we have to see what happens with this variant.

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Speaker 1: But in the meantime, it is continue to urge to

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Speaker 1: answer questions, to get the word out, to make the

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Speaker 1: vaccine available because it has been shown to be effective

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Speaker 1: in reducing severity of disease, severity of illnesses and hospitalization

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Speaker 1: and deaths. And so let's get people vaccinated as our

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Speaker 1: number one tool. And then in the meantime, for those

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Speaker 1: that cannot be vaccinated, they're not in eligible for whatever reason,

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Speaker 1: wear the mask, get tested often. Um, but I completely

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Speaker 1: agree we're going to continue to see these variants until

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Speaker 1: we have more of our population vaccinated. So, Dr you're

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Speaker 1: a professor at Vanderbilt University, one of the leading healthcare

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Speaker 1: universities in the United States. It's also in a region

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Speaker 1: of the country down to Nashville, Tennessee, that has had

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Speaker 1: some challenges with vaccination rates. With mask wearing, You're on

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Speaker 1: the front lines here. Do you have any confidence that

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Speaker 1: we in the US, and more importantly in other parts

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Speaker 1: of the world, can get vaccination rates materially higher. Well,

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Speaker 1: what we're saying, according to the CDC, now we've had

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Speaker 1: about six of our population across the US is fully vaccinated,

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Speaker 1: so that means they've had two doses, and then we've

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Speaker 1: had over thirty seven million that have gotten boosters, and

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Speaker 1: now all adults are eligible for boosters. So we are

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Speaker 1: seeing movement in that direction. But Tennessee, we remain lower

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Speaker 1: UM or more around fifty of our population is fully vaccinated,

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Speaker 1: and so that still means we have lots of work

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Speaker 1: to do. I'm a nurse practitioner. I spend a lot

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Speaker 1: of time out in the community talking to communities about

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Speaker 1: the importance of vaccinating and answering questions. These are great

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Speaker 1: questions that they bring up every day as to why

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Speaker 1: they're not getting vaccinated. Until answering those questions, UM is

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Speaker 1: very important. Are you expecting that as we head into

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Speaker 1: into winter that we are going to be seeing higher

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Speaker 1: case counts? I appreciate that we're Novembre about to go

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Speaker 1: into the say, but but I imagine it's still pretty

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Speaker 1: warm where you are, are we going to see high

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Speaker 1: case counts? You just give me a number that's in

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Speaker 1: the fifties of the population vaccinated. Eastern Europe, which is

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Speaker 1: in the mid sixties has seen an absolute explosion of

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Speaker 1: cases over the last few weeks. And that's what we're

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Speaker 1: seeing in the US. We're saying seeing in case counts.

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Speaker 1: We're seeing that as well. UM. However, we are not

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Speaker 1: seeing the dramatic increase in hospitalizations and deaths. So that's

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Speaker 1: that's the number that's very important to follow. UM. But

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Speaker 1: we are seeing an increase in case counts, and so

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Speaker 1: what is to come after that is very important to follow. UM.

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Speaker 1: We need to make sure testing is available to everyone

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Speaker 1: everywhere so that they can get tested as soon as

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Speaker 1: they experience signs their symptoms. UM, even if they if

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Speaker 1: they are unvaccinated and they're going somewhere, get tested where MASK.

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Speaker 1: We have to do whatever we can to reduce the

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Speaker 1: transmission rate UM so that we can keep our numbers

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Speaker 1: of hospitalizations and deaths down. That you mentioned fully vaccinated,

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Speaker 1: that's tennessee, but in the United States we're around fully vaccinated.

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Speaker 1: All right, Dr April Capo, thank you so much. We

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Speaker 1: really appreciate. Dr April Capo, acute nurse practitioner and president

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Speaker 1: of the American Association Nurse Practitioners, also professor at Vanderbilt University.

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Speaker 1: And again, guy, it's just challenging. It just seems like

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Speaker 1: once you get a handle on one wave delta, here

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Speaker 1: comes another one potentially. Well, yeah, that is what we're

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Speaker 1: dealing with here. We The problem is we just don't

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Speaker 1: know enough about it at the moment to form informed,

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Speaker 1: uh sort of decision making. We're cutting flights. But the

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Speaker 1: but the suggestion of all the people I've been talking

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Speaker 1: to today is that basically this is probably already spread,

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Speaker 1: we should expect it to pick up. Well, I'll admit

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Speaker 1: something to you all, um, A lot of the smart

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Speaker 1: kids are talking about distributed finance. I don't really know

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Speaker 1: what it means, but fortunately our next guest does, Cam Harvey.

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Speaker 1: He's a professor finance at Duke University's Fuqua School of Business,

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Speaker 1: my former professor when I was a student at Fuqua. Camp.

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Speaker 1: Thanks so much for joining us here. I know you've

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Speaker 1: got a new book out, which is really why this

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Speaker 1: is great to chat with you, entitled Defy in the

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Speaker 1: Future of Finance. What is what is defying. So decentralized

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Speaker 1: finance is a way to transact where you kind of

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Speaker 1: avoid a lot of middle people. So, for example, if

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Speaker 1: you want to buy or sell stock, you need to

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Speaker 1: deal with a broker, you need to go to a

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Speaker 1: stock exchange and things like that, Whereas in decentralized finance,

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Speaker 1: you're training with an algorithm, so the algorithm doesn't care

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Speaker 1: if you're a buyer or seller. You sell or you

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Speaker 1: buy with algorithm. So it takes a lot of the

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Speaker 1: middle layer out, and decentralized finance does a lot more

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Speaker 1: because it's not just trading of securities. It could be UH,

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Speaker 1: savings and lending, UH, it could be tokenization, UH, it

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Speaker 1: could be insurance. That. There's many different things that are

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Speaker 1: possible in this space, but the key thing is that

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Speaker 1: you take a lot of that middle layer out. And

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Speaker 1: when you do that, it's very interesting because today, if

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Speaker 1: you buy a stock, for example, you can buy it

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Speaker 1: pretty instantly, but the settlement of the stock it actually

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Speaker 1: takes two days, whereas in this space the settlement is immediate.

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Speaker 1: So there's no difference between execution of a trade and

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Speaker 1: the settlement of a trade that regulates feel about that Professor, Um,

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Speaker 1: we spend a lot of time over the last few years, uh,

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Speaker 1: making sure that that a lot of price action on

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Speaker 1: financial markets is centrally cleared. It allows visibility, it allows safety.

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Speaker 1: Does this allow for that? So on the visibility, everything

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Speaker 1: is transparent in these markets. So the current markets are

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Speaker 1: the markets that are actually opaque. And it's also the

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Speaker 1: case that the same asset could be traded on multiple

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Speaker 1: decentralized exchanges. And and let me be clear here, um,

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Speaker 1: popular exchanges like finance and coin base, they're not decentralized finance.

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Speaker 1: They're just centralized broker exchanges that people actually deal with.

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Speaker 1: And decentralized finance, you're just dealing with an algorithm. And look,

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Speaker 1: to me, it's not too hard to imagine in the

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Speaker 1: future we're gonna be dealing with algorithms, not just in finance,

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Speaker 1: but in finance. It's kind of low hanging fruit to

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Speaker 1: actually do this as sort of the regulators, um, And

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Speaker 1: there's multiple layers here. Uh, this is a new space,

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Speaker 1: and they've got a tough job because obviously cryptocurrency wasn't

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Speaker 1: detailed in the nine three Securities Act, so they need

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Speaker 1: to improvise. But they need the balance and what I

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Speaker 1: mean by that is nobody wants people taking the advantage

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Speaker 1: of by people in the crypto space, and we've seen

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Speaker 1: some of that already. But if the regulations are too

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Speaker 1: harsh and they reduced that risk to zero, then these

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Speaker 1: new ideas will simply move off shore and uh and

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Speaker 1: and no country wants their best ideas to move off shore.

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Speaker 1: So we'll see in the next few years some sort

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Speaker 1: of regulatory guidance. You know, I do think that that's

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Speaker 1: important given that most of the trading today is just

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Speaker 1: purely speculative trading in the too complex. So when I

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Speaker 1: say decentralized finance, that's a small part today of what's

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Speaker 1: actually happening. And indeed, today's market action verifies that most

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Speaker 1: of the trading going on in the crypto space is

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Speaker 1: purely speculative in a risk risk off day. Um, you

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Speaker 1: talk about the market going down two percent, to take

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Speaker 1: a look at what's happening to bitcoin and ethereum bitcoin

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Speaker 1: down seven point professor. You know, when I think about

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Speaker 1: the centralized finance, and when I think that even you know,

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Speaker 1: just just crypto, which we have some more experience with,

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Speaker 1: I don't see it being led by JP Morgan or

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Speaker 1: Bank of America who was going to innovate and develop

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Speaker 1: this new area of finance. Yeah, it's really interesting because

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Speaker 1: you ask the traditional banks like JP Morgan and Bank

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Speaker 1: of America to innovate, they essentially look at this as

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Speaker 1: a cannibalization of their business. US. So decentralized finance is

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Speaker 1: an existential threat to our current commercial banks. So so

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Speaker 1: for them, uh, to be a leader in this space

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Speaker 1: is fraught with risk because they're basically if they jump

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Speaker 1: into this, uh, it means that their role will be

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Speaker 1: a much smaller role in the future. So this just

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Speaker 1: to be clear, Um, decentralized finances, where you're dealing with peers,

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Speaker 1: everybody's appear, there's no client, there's no customer, there's no banker.

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Speaker 1: Everybody's appear and and that's a totally different model. So

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Speaker 1: we don't rely upon JP Morgan or Bank of America

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Speaker 1: and to innovate in this space. There's like a whole

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Speaker 1: new ecosystem out there. Uh. That is it's driven by

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Speaker 1: economists and computer scientists to essentially rebuild our financial system,

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Speaker 1: not to renovate, but to rebuild to reduce those current

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Speaker 1: sactions costs and reducing those transaction costs is a good

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Speaker 1: idea that leads to economic growth. Can when you see

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Speaker 1: a market like this, um, you know, it's just I'm

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Speaker 1: just gonna talk since the pandemic where we had that

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Speaker 1: dramatic sell off at the beginning of the pandemic, then

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Speaker 1: an extraordinary rally, uh, and then you get days like today.

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Speaker 1: Is today an efficient market from your perspective or how

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Speaker 1: do you think about it? So no market is perfectly efficient.

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Speaker 1: So there's information that came to the market today, um,

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Speaker 1: and it's negative information and we go into risk off.

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Speaker 1: So it reminds me somewhat of March if you recollect

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Speaker 1: that that was the month where we realized how serious

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Speaker 1: the COVID nineteen actually was. Equity markets plunge, UM and

429
00:25:56,800 --> 00:26:01,520
Speaker 1: other kind of risk on assets the same thing. So

430
00:26:01,680 --> 00:26:10,320
Speaker 1: gold drop, UM, Bitcoin drop, and people piled into safe haven,

431
00:26:11,359 --> 00:26:15,600
Speaker 1: which is US treasury bones in cash. And it's very

432
00:26:15,640 --> 00:26:19,880
Speaker 1: similar in terms of what is happening today. Um, we're

433
00:26:19,920 --> 00:26:23,400
Speaker 1: scared that we're going to replicate or could be even

434
00:26:23,440 --> 00:26:29,200
Speaker 1: worse in terms of COVID UH nineteen. And it's a

435
00:26:29,280 --> 00:26:32,399
Speaker 1: risk off day. And again do you see that in

436
00:26:32,480 --> 00:26:35,919
Speaker 1: the market. Uh, it's interesting to me that the so

437
00:26:36,040 --> 00:26:42,040
Speaker 1: called safe haven asset gold is essentially unchanged today, whereas

438
00:26:42,040 --> 00:26:47,040
Speaker 1: stocks are substantially down and as you mentioned, bitcoin is

439
00:26:47,080 --> 00:26:51,359
Speaker 1: down nearly eight percent and the other speculative cryptos like

440
00:26:51,640 --> 00:26:56,600
Speaker 1: doge coin down even more. Like does that, in your

441
00:26:56,600 --> 00:27:02,240
Speaker 1: mind draw a line between growth stock um, the mean stocks,

442
00:27:02,280 --> 00:27:07,359
Speaker 1: the retail stocks, and crypto. Has crypto become very correlated

443
00:27:07,560 --> 00:27:12,399
Speaker 1: with equity markets? Yes? So, and I've mentioned this for

444
00:27:12,440 --> 00:27:17,200
Speaker 1: a very long time. So given the speculative interest in cryptocurrencies,

445
00:27:17,680 --> 00:27:22,720
Speaker 1: they actually have data. So that means that when the market,

446
00:27:22,760 --> 00:27:26,000
Speaker 1: the equity market plunges, they tend to do the same thing.

447
00:27:26,640 --> 00:27:31,159
Speaker 1: And again March is a good example of that. And

448
00:27:31,200 --> 00:27:36,080
Speaker 1: then what happened afterwards, the stock market realized that we're

449
00:27:36,080 --> 00:27:40,000
Speaker 1: going to have a vaccine eventually, UH it turned to

450
00:27:40,000 --> 00:27:45,200
Speaker 1: a risk on situation. People piled into UH, into equity markets,

451
00:27:45,280 --> 00:27:48,600
Speaker 1: drove them to all time highs. Gold went to its

452
00:27:48,640 --> 00:27:53,359
Speaker 1: third highest level ever and Bitcoin went through the roof.

453
00:27:54,119 --> 00:27:58,320
Speaker 1: So so this is very consistent with the narrative that

454
00:27:58,760 --> 00:28:06,159
Speaker 1: the crypto complex UH is very influenced by speculative investors theoretically,

455
00:28:06,400 --> 00:28:12,200
Speaker 1: so theoretically the cryptocurrencies are decoupled from the economy in general.

456
00:28:12,359 --> 00:28:15,399
Speaker 1: So bitcoin has got an algorithmic money supply that caps

457
00:28:15,400 --> 00:28:18,520
Speaker 1: out at twenty one million. It has nothing to do

458
00:28:18,600 --> 00:28:22,480
Speaker 1: with FED policy or FED money supply or any other

459
00:28:22,560 --> 00:28:28,000
Speaker 1: central bank. Yet given the speculative interest in the cryptos,

460
00:28:28,760 --> 00:28:32,080
Speaker 1: they tend to move with the other risk assets, and

461
00:28:32,160 --> 00:28:35,320
Speaker 1: they tend to move more than the other risk assets,

462
00:28:35,640 --> 00:28:39,480
Speaker 1: especially in a period of a draw down like today.

463
00:28:40,200 --> 00:28:42,360
Speaker 1: All right, Cam, thank you so much. We really appreciate

464
00:28:42,480 --> 00:28:45,920
Speaker 1: your time here. Cam Harry, Professor Finance at Duke University's

465
00:28:46,120 --> 00:28:49,520
Speaker 1: uh Fuqual School of Business. He has a new book

466
00:28:49,520 --> 00:28:52,560
Speaker 1: app Defy and the Future of Finance, so as we

467
00:28:52,600 --> 00:28:55,720
Speaker 1: all try to get a little bit smarter about decentralized finance.

468
00:28:56,240 --> 00:28:58,720
Speaker 1: I read that book. It's a quick way to kind

469
00:28:58,720 --> 00:29:00,520
Speaker 1: of get up the speed. So I wreck commend that,

470
00:29:00,760 --> 00:29:07,280
Speaker 1: and we appreciate some moment we became hurry. We focused

471
00:29:07,320 --> 00:29:11,000
Speaker 1: on coming into today. What was happening with inflation. We've

472
00:29:11,040 --> 00:29:14,320
Speaker 1: seen obviously the supply chain crunches. We've seen the impact

473
00:29:14,320 --> 00:29:17,480
Speaker 1: that they've been happening having there's been labor shortages. We've

474
00:29:17,520 --> 00:29:19,960
Speaker 1: been watching that carefully. We've obviously seen a high price

475
00:29:20,000 --> 00:29:22,720
Speaker 1: of fuel as well. That started to certainly abate today

476
00:29:22,760 --> 00:29:25,400
Speaker 1: with a massive move down in the price of fuel.

477
00:29:25,720 --> 00:29:29,200
Speaker 1: The question is is this just a brief blip and

478
00:29:29,280 --> 00:29:31,640
Speaker 1: we bounce back, or are we going to start to

479
00:29:31,640 --> 00:29:35,320
Speaker 1: see actually a new normal starting to assert itself as

480
00:29:35,360 --> 00:29:38,080
Speaker 1: we realize that maybe actually we're going to be dealing

481
00:29:38,120 --> 00:29:41,040
Speaker 1: with this, with this COVID crisis for a lot longer.

482
00:29:41,360 --> 00:29:44,280
Speaker 1: Supply chains absolutely front and center, particularly on a day

483
00:29:44,560 --> 00:29:48,120
Speaker 1: like today Black Friday, So let's get some some insight

484
00:29:48,200 --> 00:29:51,880
Speaker 1: into what is happening. Page Van Fossen joins us now

485
00:29:52,040 --> 00:29:56,640
Speaker 1: vice president of e Commerce Operations for DHR, working on

486
00:29:56,640 --> 00:29:59,520
Speaker 1: the supply chain side of the business. Page. Welcome to

487
00:29:59,520 --> 00:30:02,400
Speaker 1: the program. Thank you very much, indeed for your time.

488
00:30:02,920 --> 00:30:04,720
Speaker 1: We've been talking to a number of people already about

489
00:30:04,720 --> 00:30:07,560
Speaker 1: how the shopping season is going today, that there does

490
00:30:07,600 --> 00:30:10,400
Speaker 1: seem to be a sense that we have fully stacked

491
00:30:10,400 --> 00:30:13,440
Speaker 1: shells that actually not only in bricks and mortar, but

492
00:30:13,560 --> 00:30:17,800
Speaker 1: also any commerce that actually inventories are reasonably good and

493
00:30:17,880 --> 00:30:19,720
Speaker 1: as a result of which consumers are going to get

494
00:30:19,760 --> 00:30:22,400
Speaker 1: what they want. You've also been working very hard just

495
00:30:22,400 --> 00:30:25,240
Speaker 1: give us your sense kind of where we are, how

496
00:30:25,480 --> 00:30:28,200
Speaker 1: how well stacked are we with inventories. Do you expect

497
00:30:28,280 --> 00:30:31,720
Speaker 1: the consumers are going to see any shortages? I would

498
00:30:31,760 --> 00:30:37,280
Speaker 1: say right now, our facilities are looking really stacked with inventory.

499
00:30:37,360 --> 00:30:40,080
Speaker 1: As you say, I think it was a little bit

500
00:30:40,160 --> 00:30:43,600
Speaker 1: later coming that than we would usually have experienced in

501
00:30:43,760 --> 00:30:47,840
Speaker 1: previous years. So we have been UH had a glut

502
00:30:47,960 --> 00:30:51,440
Speaker 1: of labor needs as we're both bringing in inventory that's

503
00:30:51,440 --> 00:30:55,320
Speaker 1: been expedited as well as trying to get the orders

504
00:30:55,360 --> 00:30:57,520
Speaker 1: out the door. I was out on the floor this

505
00:30:57,600 --> 00:31:01,080
Speaker 1: morning and some of our operations. UM, so it's been

506
00:31:01,120 --> 00:31:04,680
Speaker 1: a good start to the Blacks Friday, and I would say, um,

507
00:31:04,760 --> 00:31:08,640
Speaker 1: right now, if consumers are placing orders, they should be

508
00:31:08,680 --> 00:31:12,080
Speaker 1: able to get what they are looking for. Page. You know,

509
00:31:12,600 --> 00:31:15,160
Speaker 1: as we think about this UH supply chain, it's it's

510
00:31:15,160 --> 00:31:17,240
Speaker 1: it's a global issue. It's it's probably an area the

511
00:31:17,320 --> 00:31:19,600
Speaker 1: economy that most folks didn't even really think about. They

512
00:31:19,640 --> 00:31:22,200
Speaker 1: just assume that it just happens. The box shows up

513
00:31:22,480 --> 00:31:25,960
Speaker 1: when they say it is. One of the backdrops seems

514
00:31:26,000 --> 00:31:28,120
Speaker 1: to be labor, you know what. That seems to be

515
00:31:28,160 --> 00:31:31,440
Speaker 1: a real challenge, whether it's having folks on the doctor

516
00:31:31,480 --> 00:31:35,320
Speaker 1: onload the ships, having truckers to actually get the goods Inland.

517
00:31:35,840 --> 00:31:37,680
Speaker 1: How are you thinking about labor and how is it

518
00:31:37,720 --> 00:31:43,120
Speaker 1: impacting your business? Yes, definitely, labor is a challenge across

519
00:31:43,160 --> 00:31:46,040
Speaker 1: the board. You know. I think as anyone who's driving

520
00:31:46,120 --> 00:31:48,440
Speaker 1: through their hometown, they can see all of the help

521
00:31:48,560 --> 00:31:51,240
Speaker 1: wanted signs out in the front of businesses and it's

522
00:31:51,280 --> 00:31:56,080
Speaker 1: no different and supply chain. You know, at dhl UM,

523
00:31:56,200 --> 00:32:00,440
Speaker 1: we are very excited to report that we have really

524
00:32:00,480 --> 00:32:06,520
Speaker 1: had a very successful season and UM recruiting and obtaining labor. Uh.

525
00:32:06,520 --> 00:32:10,360
Speaker 1: You know, in past years, especially the last few, we

526
00:32:10,480 --> 00:32:14,000
Speaker 1: have seen a tightening of the labor market and the

527
00:32:14,040 --> 00:32:19,960
Speaker 1: competition was really forgetting the best talent. UM. Today there

528
00:32:20,040 --> 00:32:23,000
Speaker 1: just isn't enough talent to go around. There's not enough

529
00:32:23,040 --> 00:32:26,320
Speaker 1: people for all of the jobs that there are, and

530
00:32:26,400 --> 00:32:29,360
Speaker 1: so really there are gonna be winners and losers when

531
00:32:29,400 --> 00:32:32,400
Speaker 1: it comes to labor and d h l UM, you know,

532
00:32:32,520 --> 00:32:36,800
Speaker 1: leveraging our strong brand recognition along as our with our

533
00:32:36,840 --> 00:32:42,360
Speaker 1: reputation as UH employer of choice, UM have really seen

534
00:32:42,640 --> 00:32:48,240
Speaker 1: good success this year. Despite that, as you say, there

535
00:32:48,400 --> 00:32:50,760
Speaker 1: is a there is a kind of ongoing issue with labor.

536
00:32:50,880 --> 00:32:54,200
Speaker 1: While you may have been successful recently, you're obviously looking

537
00:32:54,240 --> 00:32:57,360
Speaker 1: to the future and wondering whether that will continue. As

538
00:32:57,400 --> 00:33:01,520
Speaker 1: a result, are we going to see increasingly fulfillment centers

539
00:33:01,560 --> 00:33:05,160
Speaker 1: being automated? How much automation are you seeing now? How

540
00:33:05,240 --> 00:33:07,480
Speaker 1: much aultomation did it? We'll see in five years time,

541
00:33:08,800 --> 00:33:11,480
Speaker 1: Oh for sure, I think. UM, I guess I would

542
00:33:11,520 --> 00:33:14,600
Speaker 1: call this and I've been I've been an e commerce

543
00:33:14,640 --> 00:33:17,720
Speaker 1: since uh when, since it was mail order, So I've

544
00:33:17,720 --> 00:33:19,720
Speaker 1: been in the business for a very long time. And

545
00:33:19,760 --> 00:33:23,040
Speaker 1: I would say from an operation's perspective, this is going

546
00:33:23,120 --> 00:33:26,760
Speaker 1: to be one of the most transformative periods that we

547
00:33:26,880 --> 00:33:31,600
Speaker 1: have seen UM specifically because of the labor shortage. You

548
00:33:31,600 --> 00:33:33,640
Speaker 1: know how over the last few years we have seen

549
00:33:33,800 --> 00:33:40,440
Speaker 1: innovation began two UH appear though UM it wasn't quite

550
00:33:40,480 --> 00:33:44,600
Speaker 1: mature enough and the return on the investment wasn't quite there,

551
00:33:45,120 --> 00:33:48,040
Speaker 1: And that has really shifted in the last twelve months.

552
00:33:48,440 --> 00:33:51,880
Speaker 1: Being from a DHL perspective, UM, we've been a little

553
00:33:51,880 --> 00:33:54,960
Speaker 1: bit ahead of the curves. We've been focused on integrating

554
00:33:55,040 --> 00:33:58,960
Speaker 1: relevant UM innovation into our solutions for quite a while now,

555
00:33:59,560 --> 00:34:03,840
Speaker 1: UM and and we UH specifically around driver lists, forklifts

556
00:34:03,880 --> 00:34:09,800
Speaker 1: and picking assisted robotics. UM and we've doubled the number

557
00:34:09,920 --> 00:34:14,160
Speaker 1: of collaborative robots that we had um to last year

558
00:34:14,239 --> 00:34:16,960
Speaker 1: and expect to double that number again next year. So

559
00:34:17,080 --> 00:34:22,080
Speaker 1: technology is definitely coming automation. You're going to see e

560
00:34:22,160 --> 00:34:26,560
Speaker 1: commerce operations specifically because they are so labor intensive, really

561
00:34:26,600 --> 00:34:31,600
Speaker 1: start to implement some of that emerging technology. Page DHL

562
00:34:31,640 --> 00:34:34,319
Speaker 1: is a global company. Give us a sense of where

563
00:34:34,320 --> 00:34:38,960
Speaker 1: you're seeing, maybe some the most challenging area of the

564
00:34:38,960 --> 00:34:40,960
Speaker 1: globe from a supply chain and maybe some of the

565
00:34:41,320 --> 00:34:46,160
Speaker 1: maybe some regions that are doing better. Oh. Um, I

566
00:34:46,200 --> 00:34:50,400
Speaker 1: would say it is across the board challenging. I don't

567
00:34:50,440 --> 00:34:56,719
Speaker 1: know that there is a place where it is particularly easy. UM.

568
00:34:56,840 --> 00:35:01,319
Speaker 1: I'd say in North America because I think have had

569
00:35:02,000 --> 00:35:07,520
Speaker 1: UM not as necessarily as much impact from COVID restrictions,

570
00:35:07,680 --> 00:35:11,680
Speaker 1: We've probably seen a little bit of easier time than

571
00:35:11,719 --> 00:35:16,239
Speaker 1: we have in some other parts of the globe. UM.

572
00:35:16,280 --> 00:35:18,560
Speaker 1: Just to find a quick question from me, we've got

573
00:35:18,560 --> 00:35:21,399
Speaker 1: a couple of minutes left. When I talk to people

574
00:35:21,400 --> 00:35:24,000
Speaker 1: in the logistics industry, one of the biggest challenges they're

575
00:35:24,000 --> 00:35:27,799
Speaker 1: facing right now is is how to deal with returns

576
00:35:29,320 --> 00:35:33,640
Speaker 1: at a period when inventory is quite tight because of

577
00:35:33,680 --> 00:35:36,000
Speaker 1: what has been happening with the global supply chain story.

578
00:35:36,040 --> 00:35:38,480
Speaker 1: Managing your inventry when you get it is absolutely critical.

579
00:35:38,760 --> 00:35:40,680
Speaker 1: A lot of people buy stuff, they try it on,

580
00:35:40,760 --> 00:35:42,680
Speaker 1: they figure out what they want, they send some of

581
00:35:42,719 --> 00:35:46,920
Speaker 1: it back. How how much faster is that process now

582
00:35:46,920 --> 00:35:50,000
Speaker 1: and how critical is that part of the process in

583
00:35:50,120 --> 00:35:55,400
Speaker 1: terms of maintaining retailer's margins. Yeah, it is actually a

584
00:35:55,520 --> 00:35:58,200
Speaker 1: very important part of the project. You know, when merchants

585
00:35:58,239 --> 00:36:02,759
Speaker 1: are placing their orders, they are factoring in returns as

586
00:36:02,800 --> 00:36:05,960
Speaker 1: part of the inventory that would be available to sell,

587
00:36:06,360 --> 00:36:10,359
Speaker 1: and so we have seen increased focus on that. UM.

588
00:36:10,920 --> 00:36:15,320
Speaker 1: The interesting thing is through the COVID years, UM, people

589
00:36:15,360 --> 00:36:20,080
Speaker 1: were ordering much more comfortable clothing, and so we actually

590
00:36:20,120 --> 00:36:24,120
Speaker 1: saw return rates go down because the sizing which was

591
00:36:24,239 --> 00:36:27,920
Speaker 1: much more forgiving. UM. We are I mean, yeah, I know,

592
00:36:28,400 --> 00:36:31,279
Speaker 1: a lot of sweat pants and leggings. UM. We are

593
00:36:31,320 --> 00:36:34,120
Speaker 1: starting to see that turn around a little bit as

594
00:36:34,160 --> 00:36:37,320
Speaker 1: people are, you know, starting to order I think Denham

595
00:36:37,480 --> 00:36:41,600
Speaker 1: is having a new resurgence UM, starting to order more

596
00:36:41,760 --> 00:36:45,960
Speaker 1: typical types of clothing. Uh. And there is definitely a

597
00:36:46,120 --> 00:36:49,799
Speaker 1: focus on that UM as well as returns. As you know,

598
00:36:49,840 --> 00:36:53,680
Speaker 1: capacities continue to increase. Returns is one of those places

599
00:36:53,719 --> 00:36:56,279
Speaker 1: where you can be a little more innovative, maybe move

600
00:36:56,360 --> 00:36:58,920
Speaker 1: that off site, um, so that you can create more

601
00:36:58,960 --> 00:37:03,600
Speaker 1: capacity for your picking and shipping orders. Um. But you

602
00:37:03,640 --> 00:37:06,440
Speaker 1: still have to be able to then get those returns

603
00:37:06,440 --> 00:37:09,040
Speaker 1: back into inventory very quickly. All right, Page, thank you

604
00:37:09,080 --> 00:37:11,600
Speaker 1: so much for joining us. Really appreciate getting your perspective

605
00:37:11,640 --> 00:37:14,280
Speaker 1: on this busy day. Gotta be one of the busiest

606
00:37:14,360 --> 00:37:17,080
Speaker 1: days of the year for folks of the likes of

607
00:37:17,160 --> 00:37:19,880
Speaker 1: d h L, So Page van Foston, we appreciate the time.

608
00:37:19,960 --> 00:37:22,880
Speaker 1: She's a vice president of e commerce Operations at d

609
00:37:23,280 --> 00:37:29,160
Speaker 1: h L. Supply lots of red on the screen here,

610
00:37:29,160 --> 00:37:32,319
Speaker 1: And as Charlie was just discussing, is this a fair

611
00:37:32,400 --> 00:37:36,440
Speaker 1: response to an additional unknown in this marketplaces? And uh

612
00:37:36,640 --> 00:37:39,480
Speaker 1: too much or is it not enough? Here? As this

613
00:37:39,560 --> 00:37:43,279
Speaker 1: market tries to dissect and discount some new information in

614
00:37:43,280 --> 00:37:45,680
Speaker 1: the marketplace, let's check in with a professional who does

615
00:37:45,680 --> 00:37:48,160
Speaker 1: this for a living. David Deed's managing principle and senior

616
00:37:48,200 --> 00:37:51,640
Speaker 1: portfolio strategist at Gloodstone Bank. David, thanks so much for

617
00:37:51,719 --> 00:37:54,320
Speaker 1: joining us. You've got lots of perspective in this market.

618
00:37:54,680 --> 00:37:58,760
Speaker 1: When we saw the trading today, what did you take away? Well,

619
00:37:58,840 --> 00:38:01,960
Speaker 1: certainly it was a very panicky response, and I think

620
00:38:02,000 --> 00:38:04,880
Speaker 1: the key thing is, first of all, you know, people

621
00:38:04,880 --> 00:38:08,560
Speaker 1: who trade stocks for a living are not epidemiologists. So

622
00:38:08,640 --> 00:38:12,719
Speaker 1: the concern, of course, is this new mutation. Who is

623
00:38:12,760 --> 00:38:15,760
Speaker 1: now calling it a micron coming out of South Africa.

624
00:38:16,200 --> 00:38:18,879
Speaker 1: You know, it could be terrible, it might not be,

625
00:38:19,120 --> 00:38:23,800
Speaker 1: but Wall Street professionals are not trained to immediately assess

626
00:38:23,920 --> 00:38:27,480
Speaker 1: what the risk is, and therefore the default is perhaps

627
00:38:27,680 --> 00:38:30,480
Speaker 1: moved some tips to the sidelines. It is not helped

628
00:38:30,480 --> 00:38:33,080
Speaker 1: by the fact that a lot of people are at

629
00:38:33,120 --> 00:38:36,319
Speaker 1: home in this holiday shortened trading week, and particularly some

630
00:38:36,360 --> 00:38:38,680
Speaker 1: of the senior executives, and so there's probably a lot

631
00:38:38,719 --> 00:38:41,480
Speaker 1: of stop losses. They were triggered, and people just want

632
00:38:41,520 --> 00:38:43,360
Speaker 1: to take a deep breath and enjoy the weekend and

633
00:38:43,400 --> 00:38:47,239
Speaker 1: figure it out on Monday. What happens on Monday is

634
00:38:47,320 --> 00:38:50,399
Speaker 1: now the key question. We have seen volatility spoke really

635
00:38:50,480 --> 00:38:53,640
Speaker 1: quite considerably. That sort of the reason maybe to manage

636
00:38:53,760 --> 00:38:56,040
Speaker 1: risk a little bit more carefully. Risk offices will be

637
00:38:56,040 --> 00:38:58,720
Speaker 1: tapping people on the shoulder just looking at the value

638
00:38:58,760 --> 00:39:01,839
Speaker 1: at risk, and so well, volatility is up here. You

639
00:39:01,880 --> 00:39:04,680
Speaker 1: need to rethink exactly what your positioning looks like. But

640
00:39:04,760 --> 00:39:08,439
Speaker 1: the instinct time and time again is to buy the dip.

641
00:39:08,840 --> 00:39:13,200
Speaker 1: Do you think that instinct will prove correct again? Well, certainly,

642
00:39:13,520 --> 00:39:16,840
Speaker 1: all eyes are gonna be on the people, the scientists

643
00:39:16,880 --> 00:39:20,319
Speaker 1: at Fiser and Maderna and indeed J and J. They're

644
00:39:20,320 --> 00:39:22,879
Speaker 1: gonna be working feverously this weekend to try and get

645
00:39:22,960 --> 00:39:26,719
Speaker 1: an early assessment. Is this something that the existing vaccines

646
00:39:26,800 --> 00:39:29,359
Speaker 1: can handle or will take tweaking and this? So how

647
00:39:29,360 --> 00:39:31,200
Speaker 1: long is that going to take the other thing, I

648
00:39:31,239 --> 00:39:33,200
Speaker 1: think people are gonna be watching for what are the

649
00:39:33,239 --> 00:39:39,600
Speaker 1: government's responses. So for example, um UH Israel and um Belgium,

650
00:39:39,760 --> 00:39:42,640
Speaker 1: and I think Hong Kong now have prohibited people coming

651
00:39:42,680 --> 00:39:46,400
Speaker 1: in from South Africa neighboring countries. Do we do the

652
00:39:46,480 --> 00:39:49,360
Speaker 1: same thing on Monday morning and say people from Africa

653
00:39:49,400 --> 00:39:52,520
Speaker 1: are no longer welcome no matter what their vaccination status is.

654
00:39:52,640 --> 00:39:55,440
Speaker 1: So that's gonna be another key bit of information. Having

655
00:39:55,480 --> 00:39:59,760
Speaker 1: said all this, you did see some knee jerk selling

656
00:39:59,800 --> 00:40:01,759
Speaker 1: in so forth. I think people are going to be

657
00:40:01,800 --> 00:40:04,439
Speaker 1: doing a little bit of bargain hunting. You know, it's

658
00:40:04,520 --> 00:40:07,319
Speaker 1: just a few days ago. Everyone's worried about how high

659
00:40:07,440 --> 00:40:09,160
Speaker 1: is going to be high in terms of what the

660
00:40:09,200 --> 00:40:12,520
Speaker 1: Federal Reserve ultimately hikes rates two and when, um, how

661
00:40:12,560 --> 00:40:15,759
Speaker 1: bad will inflation be? Is that all off the table? Uh?

662
00:40:15,800 --> 00:40:18,480
Speaker 1: If so? Our interest rates seemed to be very very

663
00:40:18,520 --> 00:40:21,800
Speaker 1: low now below one point five and some for example,

664
00:40:21,840 --> 00:40:24,920
Speaker 1: financial institutions for sold because the strates that too low

665
00:40:24,960 --> 00:40:28,280
Speaker 1: for them to make money. How long can that last? So, David,

666
00:40:28,320 --> 00:40:30,920
Speaker 1: it's a lot of folks from the medical community and

667
00:40:31,600 --> 00:40:34,520
Speaker 1: elsewhere saying, you know, this might just be kind of

668
00:40:34,520 --> 00:40:39,120
Speaker 1: the new normal for the foreseeable future. That is, new

669
00:40:39,200 --> 00:40:41,600
Speaker 1: variants come along, and that's the nature of a virus.

670
00:40:41,640 --> 00:40:43,640
Speaker 1: You just kind of got to learn to live with it.

671
00:40:44,239 --> 00:40:47,799
Speaker 1: If that's in fact the case, where do you think

672
00:40:47,800 --> 00:40:51,080
Speaker 1: investors should be, you know, kind of intermediate to long

673
00:40:51,200 --> 00:40:55,000
Speaker 1: term given that level of given that backdrop, Well, I mean,

674
00:40:55,120 --> 00:40:58,520
Speaker 1: you know, we've had pandemics from time immorial um, We've

675
00:40:58,520 --> 00:41:01,200
Speaker 1: had variants and so forth. We just perhaps have gotten

676
00:41:01,200 --> 00:41:04,520
Speaker 1: finished with the delta one, so you know, and Marcus

677
00:41:04,560 --> 00:41:07,520
Speaker 1: has moved to new highs uh this month. So certainly

678
00:41:07,560 --> 00:41:10,200
Speaker 1: I think that with the vaccines on the market, with

679
00:41:10,320 --> 00:41:14,800
Speaker 1: the anti viral pills, um with um, you know, the

680
00:41:15,160 --> 00:41:18,840
Speaker 1: tools social distancing mass and so forth, this country and

681
00:41:18,880 --> 00:41:21,160
Speaker 1: certainly other countries around the world have learned how to

682
00:41:21,280 --> 00:41:24,680
Speaker 1: live with it, and so I think economic activity continues

683
00:41:24,680 --> 00:41:28,560
Speaker 1: to expand and get better. Just because we can't say

684
00:41:28,560 --> 00:41:31,000
Speaker 1: there will never be another variant or pandemic doesn't mean

685
00:41:31,000 --> 00:41:33,000
Speaker 1: you stop. So what does that mean in terms of

686
00:41:33,120 --> 00:41:35,239
Speaker 1: what the FED does next? The talk over the last

687
00:41:35,280 --> 00:41:38,320
Speaker 1: few days has been that we will see an accelerated taper.

688
00:41:38,840 --> 00:41:41,560
Speaker 1: Goldman Sachs was talking about that yesterday in the notes

689
00:41:42,040 --> 00:41:44,799
Speaker 1: with Jan Hatsias, talking about the fact that we could

690
00:41:44,800 --> 00:41:46,879
Speaker 1: see a doubling of the FED tape to around thirty

691
00:41:46,880 --> 00:41:51,640
Speaker 1: billion a month. Do you think that's still on I don't,

692
00:41:52,400 --> 00:41:55,520
Speaker 1: because the Fed is cautious. They lowered the interest rates

693
00:41:55,520 --> 00:41:58,120
Speaker 1: because in certainly of the pandemic. Now that uncertainty has

694
00:41:58,160 --> 00:42:01,200
Speaker 1: opened up again, there were there was noise in the

695
00:42:01,360 --> 00:42:06,520
Speaker 1: recent release Federal uh FM O see minutes about increasing

696
00:42:06,560 --> 00:42:09,040
Speaker 1: the taper UM. I think, and that might be announcement

697
00:42:09,080 --> 00:42:11,000
Speaker 1: de Scember. I think that's off the table. If you

698
00:42:11,040 --> 00:42:14,160
Speaker 1: also look at FED fund futures and so forth. A

699
00:42:14,239 --> 00:42:18,040
Speaker 1: possible first rate hike UM in June at one point

700
00:42:18,120 --> 00:42:20,920
Speaker 1: today was pushed off into two thousand twenty three. So

701
00:42:21,120 --> 00:42:23,600
Speaker 1: certainly this is going to cause a pause and a

702
00:42:23,680 --> 00:42:26,720
Speaker 1: rethinking by the Federal Reserve again. They're gonna be looking

703
00:42:26,760 --> 00:42:30,280
Speaker 1: at the listening to what the epidemiologists and the scientists

704
00:42:30,280 --> 00:42:32,680
Speaker 1: say as well. Right, all right, David Deeds, thank you

705
00:42:32,719 --> 00:42:35,040
Speaker 1: so much once again for joining us. David Deet's managing

706
00:42:35,080 --> 00:42:38,960
Speaker 1: principle and senior portfolio a strategist at Gladstone Bank, giving

707
00:42:39,000 --> 00:42:42,080
Speaker 1: us his thoughts on these markets after a crazy trading day.

708
00:42:44,000 --> 00:42:47,080
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can

709
00:42:47,120 --> 00:42:50,920
Speaker 1: subscribe and listen to interviews with Apple Podcasts or whatever

710
00:42:51,000 --> 00:42:54,640
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

711
00:42:54,920 --> 00:42:58,720
Speaker 1: at Matt Miller three on Fall Sweeney, I'm on Twitter

712
00:42:58,800 --> 00:43:01,320
Speaker 1: at pt Sweeney before where the podcast. You can always

713
00:43:01,400 --> 00:43:03,920
Speaker 1: catch us worldwide at Bloomberg Radio. M