Speaker 1: This is Bloomberg Business Week. I'm Charle Masser and I'm
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Speaker 1: pm Eastern Time on the Bloomberg Radio or watch us
Speaker 1: on YouTube search Bloomberg Global News. So a lot of
Speaker 1: headlines when it comes to COVID and the vaccine, as
Speaker 1: there always are, Charlie of course talking about them. So
Speaker 1: to Nancy Lions. We've got US educators backing vaccines. Australia
Speaker 1: struggling to control outbreaks after months of lockdowns in its
Speaker 1: main cities. Japan serious cases continuing to rise. We are
Speaker 1: awaiting news from US regulators on getting a third job
Speaker 1: for people with compromised immune systems. The f d A
Speaker 1: expected to update authorizations on the inoculations from BioNTech and
Speaker 1: it's partner fightser as well as madierna that could happen
Speaker 1: as soon as today. Meantime, the top infectious disease doctor
Speaker 1: in the US, top COVID voice really out of the government,
Speaker 1: Dr Anthony Fauci, provided some clarity this morning on CBS
Speaker 1: about who exactly should get that COVID booster. We don't
Speaker 1: feel at this particular point that, apart from the immune compromise,
Speaker 1: we don't feel we need to give boosters right now.
Speaker 1: But importantly, we are following this in real time, literally
Speaker 1: on a weekly and monthly basis. We're following cohorts of individuals, elderly,
Speaker 1: younger individuals, people in nursing homes to determine if in
Speaker 1: fact the level of protection is starting to attenuate, and
Speaker 1: when it does get to a certain level, we will
Speaker 1: be prepared to give boosters to those people I want
Speaker 1: to bring in our gusta a great voice for us
Speaker 1: throughout the pandemic. Dr Chris Byro is Professor of Epidemiology
Speaker 1: and Public Health and Human Rights at Johns Hopkins University,
Speaker 1: Bloomberg School of Public Health, supported by Michael R. Bloomberg
Speaker 1: to Bloomberg, Gulp and Bloomberg Philanthropies. Dr Biro, also Senior
Speaker 1: scientifical Liaison at the COVID Vaccine Prevention Network. He's with
Speaker 1: us on this Thursday on the phone in New York City.
Speaker 1: Dr Byron, Nice to have you back with us. How
Speaker 1: are you, how's everything going well? Thank you, Carol. Good
Speaker 1: to be with you. Um, well, I don't know that
Speaker 1: many of us expected to be back here with over
Speaker 1: a hundred thousand new infections today in the US, so
Speaker 1: it's it's a challenging moment um. But you know, the
Speaker 1: good news is that the emergency use authorizations really are
Speaker 1: holding up against DELTA. They are providing robust protection against
Speaker 1: hospitalization and death. But on the downside, we're just a
Speaker 1: little over half of all Americans who are eligible fully immunized,
Speaker 1: and that's too low. So her immunity not even close, No,
Speaker 1: not even close. And uh, you know, we're we're in
Speaker 1: a situation now where we actually have vaccine surplus. We're
Speaker 1: kind of the envy of the rest of the world.
Speaker 1: You know, where where worldwide we're at something like you know,
Speaker 1: about sixteen percent of the rest of the world has
Speaker 1: been immunized. Many many places no access to vaccines or
Speaker 1: no access to high efficacy vaccines. Uh, and we have
Speaker 1: three really great vaccines, the J and J single dose
Speaker 1: and a visor and MODERNA. So how do you feel,
Speaker 1: you know, as we wait maybe some updates in terms
Speaker 1: of a third shot for some people when it comes
Speaker 1: to COVID, a booster shot, if you will. We're expecting
Speaker 1: to hear, you know, maybe from the FDA today. What's
Speaker 1: your thinking on that guidance in terms of that versus
Speaker 1: prioritizing the world just getting a first shot into at
Speaker 1: least everyone are as close to as many as possible. Yeah, yeah,
Speaker 1: it's very important question. I think. The first thing to say, uh,
Speaker 1: and of course Dr Faccy spoke to this today earlier
Speaker 1: clip is that four people with immuno compromise the immune suppressed.
Speaker 1: And these include folks, for example, who have had a
Speaker 1: solid organ transplant like a kidney or liver transplant, and
Speaker 1: who have to be on immune suppression so they don't
Speaker 1: reject the organ, or people on steroids, people on cancer chemotherapy,
Speaker 1: folks who really, as it turns out, did not have
Speaker 1: as vigorous enough responses to the two dose regiments. So
Speaker 1: for them, this is not really a booster it's really
Speaker 1: more like completing full immunization, and it does seem that
Speaker 1: those people really do need a third dose. Uh. There's
Speaker 1: about between two and three million Americans who would fit
Speaker 1: into that category. Uh. And of course we have plenty
Speaker 1: of vaccine and we do expect the FDA today to
Speaker 1: announce that their doses will be UM will be suggested
Speaker 1: for the immune suppressed. That's different from the rest of us.
Speaker 1: The questions for people with healthy immune systems and who
Speaker 1: are eligible. So this is the twelve and older's um
Speaker 1: really is, you know, is the immunity that we have
Speaker 1: from the vaccines persisting And that's a question that's still ongoing.
Speaker 1: Remember that everybody who is in these vaccine trials is
Speaker 1: being followed for a full two years, so we're still
Speaker 1: assessing the immunogenicity there. And what it looks like right
Speaker 1: now is our problem is not among the immunized, and
Speaker 1: it's not because vaccines are waning over time that that's
Speaker 1: not what we're seeing. What we're seeing is, of course,
Speaker 1: that too many people are not immunized at all, and
Speaker 1: that's where the hospitalizations and deaths are happening. And the
Speaker 1: challenge that you know, children under age twelve are still
Speaker 1: not eligible the trial of both Fiser and Maderna and
Speaker 1: children are under way and not going to have those
Speaker 1: data probably for several months. So in the meantime they
Speaker 1: remain vulnerable, and we are seeing, of course an increase
Speaker 1: in hospitalizations in younger people because Americans over age sixty
Speaker 1: five have done way better. Of Americans over age sixty
Speaker 1: five are immunized. Know, a lot of seniors remember polio
Speaker 1: and small talks. They're from earlier periods where we didn't
Speaker 1: have this kind of vaccine hesitancy to the degree that
Speaker 1: we do now. Yeah, it's a really really good point,
Speaker 1: and you're right when we break it down to demographics,
Speaker 1: you see definitely some very different um patterns when it
Speaker 1: comes to who's taking the vaccine who who isn't. Still
Speaker 1: with us as Dr Chris barb were, Professor of Epidemiology
Speaker 1: and Public Health and Human Rights at Johns Hopkins University,
Speaker 1: Bloomberg School of Public Health, still with us on the
Speaker 1: phone in New York City, Dr Barrow, I just want
Speaker 1: to go back to what you said when we talk
Speaker 1: about the UH those with weak immune systems, UH, the
Speaker 1: immuno compromised UH. If you will, it is a relatively
Speaker 1: small number, correct, that's right. It's it's uh between about
Speaker 1: two and three of folks in the United States, so
Speaker 1: that that's still a fairly large number of people, but
Speaker 1: only about the most three of America. Okay, because I
Speaker 1: just do wonder if you've had people coming up to you,
Speaker 1: patients or colleagues or family members or friends saying, well,
Speaker 1: wait a minute, I have diabetes, or I have asthma,
Speaker 1: or I'm just getting over fighting cancer. Don't I qualify Well,
Speaker 1: I think for for folks who have a provider, that's
Speaker 1: really a question. Uh, that's on a case by case basis.
Speaker 1: At this point, many of the underlying conditions like for example,
Speaker 1: diabetes UM is a good example UM do also cause
Speaker 1: immuno compromise. What we're also very concerned about is the
Speaker 1: folks who are, for one reason or another on steroids
Speaker 1: often or what we call autoimmune diseases, and that's diseases
Speaker 1: like lupus, rheumatoid arthritis. Uh, those folks also will have compromised.
Speaker 1: People living with HIV infection who are virally suppressed and
Speaker 1: doing well on medication are often not immuno compromise. But
Speaker 1: people who are living with HIV and who are incompletely
Speaker 1: treated certainly would qualified UM and UH, And as I said,
Speaker 1: these are less really being thought of as boosters and
Speaker 1: are being thought of as a third dose that's necessary
Speaker 1: for people who just really don't respond well enough to
Speaker 1: one or two doses. And there's an easy test right
Speaker 1: to figure out your immunity here and that can help
Speaker 1: determine whether or not you need an additional vaccine. Is
Speaker 1: that fair? That's absolutely right. So when you look at
Speaker 1: out the headlines, I mean, I think it's safe to
Speaker 1: say we'd all we're hoping that by this time we'd
Speaker 1: be well behind or in front of COVID, not behind.
Speaker 1: It just feels like now we are again behind. UM.
Speaker 1: I don't know what's the trajectory, what's the timeline that
Speaker 1: you look at that we can maybe get to a
Speaker 1: place where we don't think so much about this this
Speaker 1: virus and it's not so troubling. Yeah. Yeah, Well, we
Speaker 1: have been in a kind of a race between the
Speaker 1: virus and its new variants and the vaccines and our
Speaker 1: immunization programs. For some I think two things have have
Speaker 1: not gone in our favor. One is, first of all, UH,
Speaker 1: that the vaccine rollout began to slow because of hesitancy UH,
Speaker 1: and has you know, not been sufficient at Only about
Speaker 1: of all Americans eligible fully immunized, so that has to increase,
Speaker 1: and I think the the certainly the private sector mandates
Speaker 1: from companies and employers, is likely to change that. The
Speaker 1: second problem is, of course, that the virus continues to
Speaker 1: mutate and generate these new variants and delta. While birologists
Speaker 1: were not surprised by it, we all have been really
Speaker 1: uh I think uh impressed by the infectiousness of this virus.
Speaker 1: So the original Wuhan strain had a infectivity of about
Speaker 1: two to three, meaning that for every person who was infected,
Speaker 1: they were likely to infect two or three more people.
Speaker 1: This delta variant is in the five to nine range,
Speaker 1: is much more infectious uh. And that is that is
Speaker 1: really driving these surges. And of course you put together
Speaker 1: low immunization coverage, the change in behavior with people ceasing
Speaker 1: to social distance and not not wear masks, and the
Speaker 1: infectiousness of this virus, and that is why we are
Speaker 1: in the situation we're in. Looking ahead, we've got to
Speaker 1: do better with immunization. There is an expectation, I think
Speaker 1: that the f PA is going to fully approve the
Speaker 1: MODERNA vaccine, sorry, the Visor vaccine first and then Moderna
Speaker 1: And that's probably gonna happen sort of in the in
Speaker 1: the three to six week range with Visor. That will
Speaker 1: be important. There are a number of people who say
Speaker 1: that they don't want to take a vaccine until it's
Speaker 1: fully approved, and that's understandable. But once that is fully approved,
Speaker 1: I think that will change. And that will also change
Speaker 1: how many employers are willing to mandate one thing, to
Speaker 1: mandate immunization with an emergency use authorization another if you
Speaker 1: have a fully vaccine. Yeah, that certainly sounds like it
Speaker 1: would do a lot to getting a lot more people vaccinated.
Speaker 1: We're gonna talk about that a little bit later on.
Speaker 1: Dr Buyer is so great to check in with you.
Speaker 1: Dr Chris Buyer over at Johns Hopkins University, Bloomberg School
Speaker 1: of Public Health. On the phone in New York City,
Speaker 1: you're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Hey, this
Speaker 1: popped up on our radar. As companies and CEOs are
Speaker 1: grappling with getting workers and customers back to their businesses,
Speaker 1: we're seeing leaders try more stick and less carrot, especially
Speaker 1: as we see another uptick in cases caused by the
Speaker 1: delta variants. So let's get the particulars on this. We've
Speaker 1: got the reporter on the story, Bloomberg News Projects and
Speaker 1: Investigations reporter Drake Bennett on the phone in New York City,
Speaker 1: along with Bloomberg Business Week editor Joe Weber on the
Speaker 1: remote access in Massachusetts. It does feel like Joel the
Speaker 1: days of well, we'll give you a little bonus, we'll
Speaker 1: do this, we'll do that, just if you take the vaccine.
Speaker 1: Now it's like, just take the vaccine. Yeah, big, big shift.
Speaker 1: And and that's what Drake ward for the story. Um,
Speaker 1: biggest thing of all is just that it went from
Speaker 1: sort of like employers trying to incent and even more
Speaker 1: than that, even you know, society trying to encourage with
Speaker 1: lot of tickets and you know, bonuses and baseball tickets
Speaker 1: and whatever else you can throw at them, to like
Speaker 1: no more, no more, Mr nice guys. Um, we're seeing
Speaker 1: the carrot go away in favor of something more resembling
Speaker 1: a stick. So so Drake walk us through what happened
Speaker 1: and sort of the historical precedent for some of this well,
Speaker 1: I think the uh the turning point really UH Well,
Speaker 1: besides you guys point out the brother the delta variant
Speaker 1: UM and the fact that uh, you are seeing vaccination
Speaker 1: rates you have, you're seeing them kind of level off. UM.
Speaker 1: But then you have this court decision, a federal court
Speaker 1: decision in UH lawsuit brought by some students at Indian University,
Speaker 1: and I you had instituted a vaccine man which you
Speaker 1: know some institutions were doing. You know, some hospital systems
Speaker 1: were doing it, some universities were doing it, but a
Speaker 1: lot of them weren't UM. But the federal judge upheld
Speaker 1: UH India Universities UM mandate. And I think that really
Speaker 1: that was sort of July nine, teams ish and since then,
Speaker 1: along with the spread of delta, I think that's driven
Speaker 1: the steady drumbeat of of a lot of big employers,
Speaker 1: you know tech companies, Google, um, Facebook, you know Tyson's,
Speaker 1: you know the big meat processor uh Amazon. In different ways,
Speaker 1: they're all they're all saying, you know, if you if
Speaker 1: you want to come back to the office, need to
Speaker 1: get vaccinated UM. And if you're not gonna get vaccinated,
Speaker 1: you know, you have to do all this testing, and
Speaker 1: like you guys said, there's really been this move away
Speaker 1: from we we want people to do this thing. You know.
Speaker 1: There's a sign that some of the protesters outside one
Speaker 1: of the hospital headquarters were holding and that said, you know, vaccination, yeah, mandates.
Speaker 1: No the ideas like we like vaccinations, we think they're good,
Speaker 1: but who are we to like tell people what to do?
Speaker 1: And now it's just sort of like all right, isn't it.
Speaker 1: It's it's interesting though, And I just I just got
Speaker 1: off with a doctor, just talking with the doctor, Dr
Speaker 1: Chris byro Overt Johns Hopkins and just saying it'll call
Speaker 1: maybe a long way once the FDA says it's not
Speaker 1: just emergency use but full use, uh in terms of
Speaker 1: getting more people to get vaccines. But he credited to
Speaker 1: some extent companies kind of pushing it on workers to
Speaker 1: upping up some of the vaccine numbers. That it's going
Speaker 1: to be important for that to happen in order for
Speaker 1: us to get you know, close to something like her immunity.
Speaker 1: It's interesting, though, Drake, that vaccine mandates. It's not new, right,
Speaker 1: We got vaccines as kids. We just did it right, right, Yeah,
Speaker 1: I know, for you know, every state in the Union
Speaker 1: has some kind of vaccination requirement for schools um and
Speaker 1: you know, back during the small pox you know, the
Speaker 1: days of the small boxe uh, a lot of states did.
Speaker 1: Mean it was interesting then as now. It was kind
Speaker 1: of like this social engineering experiment where some states had mandates,
Speaker 1: some states were vehemently anti mandate, and a lot of
Speaker 1: other states were somewhere in between. And you know, one
Speaker 1: of the legacies of that is you can sort of
Speaker 1: see how effective these things are. The states that did
Speaker 1: have vaccine mandates of one form another had a lot
Speaker 1: lot less smallpox than the ones that that we're anti mandate. Well,
Speaker 1: we'll stick with that smallpox thing because I think when
Speaker 1: we when it was such a a problem on such
Speaker 1: a large scale, and yet you know, we weren't as
Speaker 1: interconnected as we are now. Obviously, what what did we
Speaker 1: learn coming out of smallpox that has informed public health
Speaker 1: policy since Well, one thing that came out of that
Speaker 1: is is the Supreme Court case that is now being
Speaker 1: used to uphold vaccine mandates when they go to court
Speaker 1: um that there was a a Swedish born pastor and Cambridge,
Speaker 1: Massachusetts who he actually had been vaccinated against smallpox back
Speaker 1: in Sweden. Um and said he had a bad reaction
Speaker 1: to the shot, so he didn't want to get a
Speaker 1: new shot in Massachusetts. He didn't want his kids have
Speaker 1: to get it, and so this case went all the
Speaker 1: way to the Supreme Court and the Sprew Court. He said,
Speaker 1: you know, yes, there are sort of issues around privacy
Speaker 1: and self control here, but they're there are bigger issues
Speaker 1: around the sort of health of the community, and this
Speaker 1: idea that it's it's you know, people aren't doing this,
Speaker 1: then there's kind of it defeats the purpose of the
Speaker 1: whole endeavor. So that that's really been the kind of
Speaker 1: legal context where that we're the current um sort of
Speaker 1: battles have played out. Would it help if President Biden
Speaker 1: came out and just said, all right, everyone, you gotta
Speaker 1: get your vaccine, if there was some kind of federal
Speaker 1: mandate that came down, and is that even possible? I
Speaker 1: know other countries are certainly uh taking steps towards that. Well,
Speaker 1: I mean legally, yes, that's the federal you know, the
Speaker 1: Supreme Court has said that the federal government, you know,
Speaker 1: you could do that. You know, I don't think we're
Speaker 1: gonna see it. I think there's not really the political
Speaker 1: will for that sort of a sweeping measure. And but yeah,
Speaker 1: as you pointed out, in France and Italy to varying degrees,
Speaker 1: have basically what are national vaccine mandates, UM. And I
Speaker 1: think what you've seen so far is vaccination rates haven't
Speaker 1: gone up. But you have also seen, especially in France, UM,
Speaker 1: these these big national protests. So I think, you know, UM,
Speaker 1: in a way, you know it would I think you
Speaker 1: would probably get more vaccinations here if if there was
Speaker 1: kind of a bigger stick. I mean, I think there's
Speaker 1: a polling seems to suggest that there are some people
Speaker 1: who are real vaccine you know, holdouts, and then there's
Speaker 1: a lot of people who are kind of squishier about
Speaker 1: it UM. And so you would probably get some portion
Speaker 1: of those people to to vaccinate if it became harder
Speaker 1: to you know, live in society without it. I think,
Speaker 1: you know, the other the other thing to keep in
Speaker 1: mind their Carol is and we're starting to see some
Speaker 1: indications of this from from Biden is that you know,
Speaker 1: he's going to put some pressure on the FDA, especially
Speaker 1: in the coming weeks, to to get that full authorization
Speaker 1: of the federal government, which you could think of that.
Speaker 1: It's sort of like an interim step before anything resembling
Speaker 1: like a federal level mandate, because UM, at least that way,
Speaker 1: you've got something that is at the full blessing of
Speaker 1: the government. Isn't just um an emergency youth authorization. Obviously
Speaker 1: he's pushing hard on that, and we'll we'll see what
Speaker 1: the FDA decides to do in the coming weeks. Yeah, exactly,
Speaker 1: that's something to the doctor Dart two. With that, Johns
Speaker 1: Hopkins said that that would be a big, big step forward,
Speaker 1: no doubt about it. But I think about another story
Speaker 1: that's out on Business Week where you've got you know,
Speaker 1: restaurant owners having to police who's gotten the vaccine, and
Speaker 1: it's really putting a lot of individuals in tough positions
Speaker 1: at this point. Hey, great story, Drake, Thank you so much.
Speaker 1: Drake Bennett. He is Projects and Investigations reporter at Bloomberg
Speaker 1: Business Week with us on the phone in New York City,
Speaker 1: and of course our thinks to Dell Webber, editor of
Speaker 1: Bloomberg Business We check out the double issue that is
Speaker 1: on newsstands right now on the Bloomberg terminal on always
Speaker 1: at Bloomberg dot com This is Bloomberg Business Week with
Speaker 1: Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg
Speaker 1: Radio and as our Bloomberg opinion columnist, Tara la Chappelle,
Speaker 1: who covers the business of entertainment, telecandom, telecommunications and deals rights.
Speaker 1: Even Disney profits are not safe from the delta variant,
Speaker 1: she joins us on the phone in New Jersey. Um
Speaker 1: Disney always an important one to watch. Uh. It's a
Speaker 1: well known company. Investors like to see what this uh
Speaker 1: one has to say about all of their moving parts. Tara,
Speaker 1: what are you watching out for? Tell us a little
Speaker 1: bit about your column today. Well, you know, I think
Speaker 1: in the middle of this pandemic, Disney is almost a
Speaker 1: travel bill weather in some ways. So you know, there
Speaker 1: was this data point that we've all been kind of
Speaker 1: waiting to see whether something would come out as far
Speaker 1: as people canceling flight because that seems meaningful. That would
Speaker 1: mark a change from just sort of a vague general
Speaker 1: fear about the delta variants being worse than what we
Speaker 1: were facing a few months ago, versus people actually acting
Speaker 1: on it. And yesterday we had Southwest Airlines come out
Speaker 1: and say in their profit warning to investors that people
Speaker 1: are starting to cancel flights this month and that it's
Speaker 1: because of the delta variant. And I think that's really
Speaker 1: important because if people are hesitant about travel, Disney's biggest
Speaker 1: theme park, Disney World in Orlando, Florida, most of their
Speaker 1: guests travel from other states to get there, and so
Speaker 1: if people are starting to become hesitant, that doesn't bode
Speaker 1: well for what was looking like a pretty good recovery
Speaker 1: in that business for Disney. And you're already starting to
Speaker 1: see ANA assessments starting to come down, becoming a little
Speaker 1: bit more pessimistic. We don't know how long it's gonna last.
Speaker 1: Maybe this is a temporary thing, and I hope it is,
Speaker 1: but right now we feel that there's something changed just
Speaker 1: the last few days. Yeah, it is. It is kind
Speaker 1: of a fast movieing um as. I feel like so
Speaker 1: much of the virus has been right, Tara, where we
Speaker 1: think we're on one course and all of a sudden
Speaker 1: something happens. And you write in your story that as
Speaker 1: recently as May, after Disney is finally able to reopen
Speaker 1: the two California theme parks, the average analyst estimate called
Speaker 1: from more than twenty million of operating profit from parks,
Speaker 1: experiences and consumer products for the latest quarter, but Alice
Speaker 1: now expect just forty one million from that unit. That's
Speaker 1: a big move, that is, and that's that's for the
Speaker 1: quarter that already closed, So that was a little bit
Speaker 1: before Delta really became a threat. But I think what
Speaker 1: it shows is that there's just a general uh less
Speaker 1: optimism around this business. I think analysts are listening to
Speaker 1: other earnings calls and hearing all these CEOs in different
Speaker 1: industries talk about infletion, talk about wage pressure, difficulty getting
Speaker 1: their staff sacksinated, and you have all of that happening
Speaker 1: in the backdrop of needing to spend more on COVID
Speaker 1: mitigation measures and now suddenly Delta. So I think, you know,
Speaker 1: the last orders numbers, which we're going to hear about
Speaker 1: tonight from Disney. Also Disney's commentary tonight about this current
Speaker 1: quarter is going to be even more important, and you're
Speaker 1: seeing those estimates come down as well. Um. I think
Speaker 1: that it just shows that the business that was kind
Speaker 1: of at the bright spot and the last NAGE report,
Speaker 1: the part you know, we finally felt like was starting
Speaker 1: to get back to almost normal now that's going to
Speaker 1: be a big concern. I bet you're gonna have a
Speaker 1: lot of questions from analysts to CEO Bob Chapick tonight
Speaker 1: about that, right. And you just reminded us too, because
Speaker 1: the cruise right there have a cruise business of course
Speaker 1: as well, and that one of their first ships or
Speaker 1: the first ship right just that sale to the Bahamas
Speaker 1: this week, Yeah, just when I think it was on Monday,
Speaker 1: went from Florida to the Bahamas, and that was a
Speaker 1: really important moment. Cruises are a really good business for Disney.
Speaker 1: They had actually, just before the pandemic invested in i
Speaker 1: think two new ships and those are supposed to set
Speaker 1: sail in the next couple of years, so they're really
Speaker 1: putting a lot of money into that business. There's a
Speaker 1: lot of belief that Disney, especially will come out of
Speaker 1: the recovery really wrong with cruises because they're seen as
Speaker 1: just a safer They take specy very seriously, they're they're
Speaker 1: very all about the quality at Disney, and so there's
Speaker 1: this perception that that their cruises would see some of
Speaker 1: the best cruises to go on in the post COVID world.
Speaker 1: But again, you know, we're being held back again by Delta,
Speaker 1: and it's just really unfortunate, right exactly, having toward one
Speaker 1: of their ships. It was a new ship I remember,
Speaker 1: I can't remember the name of it, but it was
Speaker 1: here in New York a few years ago. I mean,
Speaker 1: it's it's pretty stunning what they put on their ship
Speaker 1: and how they make it great for families but also
Speaker 1: provide opportunities for kids to do one thing in parents
Speaker 1: to do another. So they really do think about that
Speaker 1: in a big way. So all right, if parks are
Speaker 1: not the bright spot this time around, and we're starting right,
Speaker 1: we're a little worried about streaming as well, what might
Speaker 1: be the bright spot? You know, it's funny, I think
Speaker 1: it's going to be the cable, which of course it's not.
Speaker 1: You know, investors are never going to see that as
Speaker 1: a bright spot. No one wants to hear about media networks,
Speaker 1: but those are incredibly profitable for Disney. Disney has the
Speaker 1: highest price channel to this day and a basic cable
Speaker 1: package and that is ESPN charging almost nine dollars a
Speaker 1: month per subscriber. So everyone that still has cable, you
Speaker 1: are subsidizing ESPN. I mean, you're really lighting disneyse pockets
Speaker 1: and and that business is going to be a cash
Speaker 1: cow for them for a while and they need that
Speaker 1: as they transition to streaming. But again, investors do not
Speaker 1: want to hear about that business. They want to hear
Speaker 1: that Disney is adding loads and loads of subscribers to
Speaker 1: Disney Plus. They want to hear that Disney Plus is
Speaker 1: going to beat Netflix. And I just don't think that
Speaker 1: today's earnings report is going to uh be sort of
Speaker 1: in in that in that realm. I think it's going
Speaker 1: to be a little bit more like, well, we added subscribers,
Speaker 1: but its growth float a little bit because of reopenings,
Speaker 1: YadA YadA, Yeah exactly. I'm just gonna take a look.
Speaker 1: What is what are Disney shares doing right now? They're
Speaker 1: they're like down about one percent this year, so investors
Speaker 1: really need, I guess something big, right to move the needle.
Speaker 1: Just got about thirty seconds here, Yeah, you know, to
Speaker 1: put that in context. So they're still outperforming Netflix. Netflix
Speaker 1: is down even more this year, so there's a lot
Speaker 1: of consternation around the streaming war. Still, I think that
Speaker 1: Disney is in a good spot overall. Their stock prices
Speaker 1: quite rich at this level there now in in the
Speaker 1: Netflix sort of categories. So their pe multiple. So you know,
Speaker 1: there's a lot of faith around Disney, and we'll see
Speaker 1: what happens. I haven't looked at it in a while.
Speaker 1: One thousand, three hundred seventy nine almost one thousand, three
Speaker 1: hundred eighty is their current pe. You're not kidding, uh
Speaker 1: in the Netflix realm mol O journal now, but you
Speaker 1: let me drive? Oh no, no, no home please excut me.
Speaker 1: I want to drive. Drives the questions dry then Bloomberg Radio.
Speaker 1: All right, just about ten and a half minutes left
Speaker 1: in today's trading session, getting ready to wrap up that
Speaker 1: Thursday trade. Charlie of course, breaking down those numbers. SMP
Speaker 1: hovering near highs of the day, up about almost twelve
Speaker 1: points for another record now though going the other direction
Speaker 1: by that amount, and the NASDAC bucking the downward trend
Speaker 1: that we've seen over the last couple of days. But
Speaker 1: it is up about forty nine points, hovering near its
Speaker 1: best levels. So let's get to it. To drive to
Speaker 1: the close with Mace McCain, president, managing director and chief
Speaker 1: investment officer at Frost Investment Advisors, with us on the
Speaker 1: phone from Colorado, the firm, by the way, has one
Speaker 1: of excuse me, has five point one billion dollars in
Speaker 1: assets under management. MACE. Good to have you here. It
Speaker 1: feels like things are slowing down a little bit. Is
Speaker 1: that because earnings are over, we're waiting for what we
Speaker 1: might get next from the FED? What is it? How
Speaker 1: do you see it? Yes, we are in a waiting
Speaker 1: period for the FED. But I think the FED direction
Speaker 1: is pretty well set going in the year end um
Speaker 1: So they've set a direction to start tightening up through
Speaker 1: reducing their purchases somewhere around your ind So that's such,
Speaker 1: and that will be a waiting period for that. Okay.
Speaker 1: Our investors ready to see the FED start to back
Speaker 1: off on some of those measures. Yes, I think they are.
Speaker 1: I think they've done a good job of preparing us,
Speaker 1: told us what conditions are going at to be in place,
Speaker 1: and and that've done a lot of of preparing us
Speaker 1: and getting us ready. And I think that the investment
Speaker 1: side is ready for them to slow their purchases. Okay,
Speaker 1: So having said that, we continue to see I think
Speaker 1: we're up to what is it, forty six records on
Speaker 1: the S and P five hundred. We've got the doubt
Speaker 1: a little bit lower today, so maybe not another record
Speaker 1: for the Doubt today. We continue to see stocks in
Speaker 1: many ways churn higher today, very tight trading range. Uh.
Speaker 1: Does that momentum continue? Would you like to see a
Speaker 1: little bit of a correction. I think we are susceptible correction.
Speaker 1: We've done a long way without a correction. But as
Speaker 1: you pointed out that we just got through the earning season,
Speaker 1: and the earning season was so strong it's it's hard
Speaker 1: to have corrections when the Feds accommodative and and earnings
Speaker 1: are surprising across the board through almost all industries. Okay,
Speaker 1: so how would you play the market at this point?
Speaker 1: I think that we're going to see the you know,
Speaker 1: we're gonna get see to consue to see strong interest
Speaker 1: in equities. Uh. They we're seeing bonds trade off today.
Speaker 1: We do not look at bonds as an attractive asset
Speaker 1: class over the next year. That they remained vulnerable. So
Speaker 1: I think that the equities are going to still continue
Speaker 1: to attract capital. So we're still bullish on the equity market. Okay,
Speaker 1: bullish on the equity market. The equiting market is big,
Speaker 1: as you know, So when you break it down, whether
Speaker 1: it's sectors, uh industries, particular names we love as specific
Speaker 1: as you can be, So tell us where you would
Speaker 1: commit new money at this point. Sure, we continue to
Speaker 1: like long term thieves. We're looking for thieves that have
Speaker 1: will endure through trading activity in the short term. So
Speaker 1: the things we continue to like our cloud computing, artificial intelligence,
Speaker 1: big data. We think we're early in the shift of
Speaker 1: many of those trends. We could see them continue for
Speaker 1: the next several years, and we want to be overweight
Speaker 1: in those areas. On a signical basis. We're still a
Speaker 1: bullish on housing, you know, the FED remaeds accommodative, and
Speaker 1: we think that the US is underinvested in housing since
Speaker 1: two thousand and eight, so we have a long catch
Speaker 1: up period there. A long longer period is millennials continue
Speaker 1: their household formation and and we think that will be
Speaker 1: a strong area. Where don't you want to be right now? Oh? Um, Well,
Speaker 1: we don't want to be bonds or treasuries is one area,
Speaker 1: and China is another. Re really want to be investing
Speaker 1: in China heavily at this point. We think there's still
Speaker 1: a lot of problems to come in our relationship with China. Well,
Speaker 1: it's interesting that you say that because here we had
Speaker 1: another day. I was looking at some of the movers
Speaker 1: in today's session. By de was one of them. UH
Speaker 1: down in today's session, and that had to do with
Speaker 1: UH putting out a conservative outlook. But again the crackdown
Speaker 1: that we're seeing by Chinese officials on the internet industry,
Speaker 1: but that's continuing to expand, and we just saw China
Speaker 1: overnight releasing a five year plan calling for greater business
Speaker 1: regulation and so now they're stepping up scrutiny of the
Speaker 1: insurance technology platforms. It feels like a moving target. So
Speaker 1: is your thinking about this is just to stay away
Speaker 1: until things kind of work their way out. Yes, we
Speaker 1: tend to be long term investors. We're not going to
Speaker 1: hop into a trade and so short term activity and
Speaker 1: well on changes in government activity there's not going to
Speaker 1: interest us. We're more interesting in the fact that we
Speaker 1: did the relationship UH between United States and China is
Speaker 1: headed in a more negative direction, and so we're less
Speaker 1: excited about investments there. You seem pretty calm about the environment,
Speaker 1: So what's the risks out there? What is what are
Speaker 1: the issues that people maybe investors or clients say Okay,
Speaker 1: this is what we are concerned about, and what's your
Speaker 1: response to them. Well, we are going to have to
Speaker 1: go through the third quarter earnings. And you remember the
Speaker 1: third quarter of a kick in the economic activity, quite
Speaker 1: a big one. Retail sales in the third quarter we're
Speaker 1: up seventy here every year GDP was up thirty nine.
Speaker 1: So the easy comparisons we've had quarterly quartered quarter to quarter,
Speaker 1: and economic activity and growth are going to slow in
Speaker 1: the third quarter. So, uh, the positive news is not
Speaker 1: going to be quite sur positive. We still still think
Speaker 1: it's gonna be positive, but the rate of growth is
Speaker 1: going to be slowing. So we're gonna have to work
Speaker 1: through that. And that's a really good point. I mean,
Speaker 1: we are we all have some kind of high hopes
Speaker 1: for the third and fourth quarters of getting back to
Speaker 1: more quote unquote normal when it comes to economic growth
Speaker 1: and the FED easing back so that we really get
Speaker 1: a truer picture of what's going on in terms of
Speaker 1: economic growth. Having said that, you know, we had some
Speaker 1: headlines about faceboat, Facebook rolling back when it's bringing its
Speaker 1: workers back a T and T, you know, mandating um
Speaker 1: vaccines and talking about that. Uh, companies are really trying
Speaker 1: to figure out ways to get workers back to the office.
Speaker 1: Could though uh covid H the delta variant or another
Speaker 1: variant certainly change the whole scenario about things kind of
Speaker 1: getting back to normal. I think that the momentum back
Speaker 1: to normal is probably irreversible. I don't think people are
Speaker 1: going to embrace another shutdown, and I think the people
Speaker 1: actually are going to make the determine how much they're
Speaker 1: going to be shut down and what they're going to
Speaker 1: participate in. I think, um, I'm out West today, I'm
Speaker 1: not in Colorado, and and you can feel about here
Speaker 1: that there's there's a limit to how much lockdown they're
Speaker 1: going to take and how much they're going to reverse
Speaker 1: the trends? All right? Really interesting? What's the big surprise
Speaker 1: that you think though? Could that maybe hold for us
Speaker 1: in the rest of the year. I think the PPI
Speaker 1: number that came out last year, being last week being
Speaker 1: so hot, was was a very important number six point
Speaker 1: two percent yearly year. So I think we're going to
Speaker 1: continue to see the CPI grown hot for this year,
Speaker 1: so we're going to continue to deal with inflation headlines.
Speaker 1: That's going to be what we're going to have to
Speaker 1: deal with right and having some today and of course
Speaker 1: EPI yesterday and so so at leasteem moderate a little
Speaker 1: bit hotter today in the read on producer price indexes,
Speaker 1: but a lot of signs that much of his transitory.
Speaker 1: But you're right, we'll have to see what those longer
Speaker 1: term trends are. Hey, Mace, Thank you so much. Mace McCain.
Speaker 1: He is chief investment officer at Frost Investment Advisors. If
Speaker 1: I put one billion in assets under management. Joining us
Speaker 1: on the phone from Colorado. Thanks for listening to Bloomberg
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