Speaker 1: This is Bloomberg Business Wait inside from the reporters and
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Speaker 1: gloom O Business Finance and tech news. The Bloomberg Business
Speaker 1: Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Listening in on surveillance this morning, I have to say
Speaker 2: Bloomberg News International Economics and Policy course by Mike McKee.
Speaker 2: He noted how this morning CPI report probably the most
Speaker 2: watched and most benign report because there are a couple
Speaker 2: more before the Fed meets next on September twentieth. But nonetheless,
Speaker 2: and he said, focus on the month to month, not the.
Speaker 3: Year every year that that was important.
Speaker 1: Did you do that?
Speaker 3: I did? I did? I did? I did?
Speaker 2: All right, So let's get more on today's data set
Speaker 2: because we've got a great duo, I should say, with us,
Speaker 2: because we should put out that headline number right posting
Speaker 2: its smallest back to back increases in two years.
Speaker 4: That was important, Tim, that was really important. Let's get
Speaker 4: into it with this roundtable that we have. We got
Speaker 4: Nicky Baird, vice president of Strategy to aptus on Zoom
Speaker 4: from Littleton Call Dorado and with us here in the
Speaker 4: studio is Bloomberg News Economics editor Molly Smith. She's with
Speaker 4: us in the Bloomberg Interactive Broker studio. Malli, I want
Speaker 4: to start with.
Speaker 2: You because he was the one swing.
Speaker 4: This was like your this is like your super Bowl
Speaker 4: every month, This is like your US Open every month.
Speaker 5: Oh well, let's not go that far too, So got
Speaker 5: the rest of.
Speaker 4: August, so give us, give us the give us. We've
Speaker 4: talked a lot about the highlights and the takeaways. Any
Speaker 4: surprises to you in.
Speaker 6: Here, not really, I mean, and I know that's that's
Speaker 6: bad for ratings.
Speaker 5: We shouldn't say that that this was not.
Speaker 6: Surprising, honest as expected. I've been told that's not good
Speaker 6: to say on the air, but it was true. And
Speaker 6: you know, I always look for an opportunity to knock
Speaker 6: Mike McKee, but he was right. You know, focus on
Speaker 6: the month a month, don't pay attention to that little
Speaker 6: pickup in the year over year. And yeah, I mean
Speaker 6: it did. It was pretty much as expected. I think
Speaker 6: for me, I was surprised to see that Shelter was
Speaker 6: ninety percent of the increase. I mean, I know it's
Speaker 6: been a lot. That's not normal, right, I mean, it's
Speaker 6: been running it definitely. Maybe we've seen it run for
Speaker 6: like two thirds of the increase, but now seeing it
Speaker 6: at ninety I mean, if anything, to me, that's just
Speaker 6: sounds like the disinflation in other categories is really happening
Speaker 6: and just in shelter taking a bit more time.
Speaker 3: Yeah, more targeted.
Speaker 2: Let's bring in our other guest with us, as we said,
Speaker 2: Nikki Bard, vice president of strategy at Aptos on Zoom
Speaker 2: from Colorado. So, Nikki, from your perspective and what you
Speaker 2: look at and what this all means for the consumer,
Speaker 2: what's kind of front and center for you.
Speaker 7: Yeah, I think what Molly said is right in line.
Speaker 7: It's like, this isn't something that on its own is
Speaker 7: going to have an impact on consumer spending or consumer behavior.
Speaker 7: We're already in the back to school season, we're looking ahead,
Speaker 7: of course to the holiday season ever important for retail,
Speaker 7: and this one indicator isn't enough to say that there's
Speaker 7: anything drastic that's going to happen to consumer spending between
Speaker 7: now and the end of the year.
Speaker 4: Hmm, Okay, why is that?
Speaker 7: Well, just I mean, like the price increases that have
Speaker 7: been happening, they do especially in the things that impact
Speaker 7: their discretionary spending. Those are leveling off, which is great
Speaker 7: news for everybody. I think what's more important to watch
Speaker 7: is we have the consumer the student loan debt repayment
Speaker 7: starting up that could potentially show up in things like
Speaker 7: Halloween spending for example. That might be an important leading
Speaker 7: indicator going into the holiday season. If consumer is a
Speaker 7: very discretionary kind of spend and it's exactly the kind
Speaker 7: of spend that is made by the people who are
Speaker 7: going to be most impacted by that kind of debt repayment.
Speaker 7: Those are the kinds of things that we're looking at
Speaker 7: to understand how much there is the impact of on
Speaker 7: consumer spending going into that all important holiday season.
Speaker 2: I have to say, just one anecdotal individual. Things are
Speaker 2: still expensive and I feel it when I go to
Speaker 2: the grocery store. I look at I feel like everything
Speaker 2: in my world just doesn't matter. It's expensive. Supercore price
Speaker 2: is molly. I want to come back to that because
Speaker 2: I saw on the blog this morning. I think it
Speaker 2: might have been Iri Jersey or somebody else pointing out
Speaker 2: which is supercore prices closely watched by the FED when
Speaker 2: it comes to inflation rose in the twelve months through July,
Speaker 2: and the first acceleration this year its services service prices
Speaker 2: is minus and energy and housing right, which follows a
Speaker 2: June reading that increased at the slowest pace in eighteen months.
Speaker 2: So it sounds a little erratic down and then up.
Speaker 2: So do you disregard it or how do you see that?
Speaker 6: I mean, I think that's kind of the overall story
Speaker 6: of the inflation as a whole, right, you know that,
Speaker 6: like we've all known that, like the path down to
Speaker 6: two percent is going to be long and it's going
Speaker 6: to be bumpy, So I would put this in that
Speaker 6: same camp. And like the increase in June that was
Speaker 6: the smallest in eighteen months, Is that what you said?
Speaker 8: Yeah?
Speaker 6: Yeah, so that was four percent. This month was four
Speaker 6: point one. So kind of like okay, like not.
Speaker 5: Really explaining hairs.
Speaker 6: Yeah, you know, it's kind of like the same with
Speaker 6: the headline, you know, being up, you know, three to
Speaker 6: two this month. That was up three percent last month,
Speaker 6: and a lot of that due to the base effects conversation.
Speaker 2: But there is something to the effect that as we
Speaker 2: get closer to that two percent, right, it's tougher in
Speaker 2: terms of bringing the inflation down.
Speaker 6: Yeah, and it's going to be in those exactly those
Speaker 6: supercore core services X housing categories that are the most concerning.
Speaker 6: Those are the ones that are the stickiest price pressures.
Speaker 6: And you know, a lot of the disinflation we've had
Speaker 6: so far has been kind of the unwinding of, like
Speaker 6: the of the pandemic inflation pressures that we had. It's
Speaker 6: been some like easing of like the pressures from the
Speaker 6: war in Ukraine.
Speaker 5: So it's it's.
Speaker 6: Still debatable of how much the Fed's work has really
Speaker 6: brought about disinflation.
Speaker 4: That's that's a really good point. And I want to
Speaker 4: ask Nikki what her thoughts are on our concerns are
Speaker 4: when it comes to energy prices on the rise again.
Speaker 7: Yeah, I mean again, from a consumer spending perspective, anything
Speaker 7: that eats up that discretionary budget is going to be
Speaker 7: the things that really drive whether or not consumer spend.
Speaker 7: I think you know, what we've seen uptil now is
Speaker 7: that consumers have been willing to accumulate debt in order
Speaker 7: to keep and maintain their spending levels. And I think
Speaker 7: it's a great point, like they're spending just as much,
Speaker 7: but net wise they're actually buying less because their purchase
Speaker 7: power just doesn't go as far with all these sustained
Speaker 7: high prices. But I think that you know, that idea
Speaker 7: of being able to continue to finance some of this
Speaker 7: consumer spending with some of the debt that consumers have
Speaker 7: been using before, that's starting to come to an end.
Speaker 7: Energy prices and again you know, the interest rate on
Speaker 7: that credit card debt. All of that stuff is going
Speaker 7: to come into play much more in terms of where
Speaker 7: consumers can go and how they can continue to impact
Speaker 7: and support the economy.
Speaker 6: Following up on that, Nikki, we actually had the CEO
Speaker 6: Advantage Score in here today. They're a provider of credit
Speaker 6: scores to millions of Americans, and he was making a
Speaker 6: lot of similar points that you were just saying. And
Speaker 6: something that he's actually said on Bloomberg TV before is
Speaker 6: that the resumption of student loan payments get this is
Speaker 6: going to have a bigger impact on Americans than a
Speaker 6: rate increase.
Speaker 4: Well like, so one twenty five basis point increase has
Speaker 4: less of an effect.
Speaker 5: And the resumption of payments.
Speaker 4: I mean that makes sense because you think about the
Speaker 4: what the average student loan payment at pocket right, It's
Speaker 4: exactly so if you're not spending that money. You know,
Speaker 4: if you're spend, if you don't have that money anymore
Speaker 4: because it's going to student loan payments, then it's not
Speaker 4: going to goods and services.
Speaker 6: Yeah yeah, I mean, Nikki, what do you think about that?
Speaker 6: You think he's like on it with the terms of
Speaker 6: the comparison there.
Speaker 7: Yeah, I totally agree. I mean I think that the
Speaker 7: basis points rates, those increases take a little bit of
Speaker 7: time before they actually filter down to the consumer. Right,
Speaker 7: It's not like today it was this and the Fed
Speaker 7: raises it and then the very next day that's impacting
Speaker 7: the rate that consumers are paying. It takes a little
Speaker 7: while for that to flow through. But that loan repayment,
Speaker 7: that's like immediate budget hit. It doesn't matter what the
Speaker 7: interest rate is. It's a repayment on something that you
Speaker 7: were able to take off the table in terms of
Speaker 7: budget before that now you have to put right back in.
Speaker 7: So if you combine adding that in and then you
Speaker 7: look at those other factors that can potentially impact consumer spending,
Speaker 7: like energy prices, like housing prices, the shelter inflation still
Speaker 7: is making up most of that increase. Those are things
Speaker 7: that are going to strength the budget that consumers have
Speaker 7: for anything else.
Speaker 2: Nickey, you work with the retail industry all different types.
Speaker 2: A lot of it is about technology innovation. That's you know,
Speaker 2: your background and you've covered this for a long time.
Speaker 2: I am curious that what you're hearing from your retail
Speaker 2: clients right now. When it comes to the environment hiring,
Speaker 2: consumer trends.
Speaker 7: Yeah, labor crofts are still really high, and there's been
Speaker 7: no give back in that regard for frontline workers in
Speaker 7: any place. So whether the labor market is soft or
Speaker 7: whether it's you know, continuing to chug along, you know
Speaker 7: the effective hourly rate that a lot of retailers are
Speaker 7: paying to staff. I mean I see advertisements and windows
Speaker 7: in the Denver area for fifteen, seventeen, twenty dollars an
Speaker 7: hour for a part time frontline retail jobs. So that
Speaker 7: part of it is definitely still impacting their business very much.
Speaker 7: So I would say the other factor that historically was
Speaker 7: impacting inflation, seems to be easing up, which is on
Speaker 7: the supply chain side. So we're definitely seeing where supply
Speaker 7: chains have evened out. There might be some weird things
Speaker 7: like shiracha that come along and disrupt very specific things
Speaker 7: but overall and in general, I would say that the
Speaker 7: supply chain issues and the shortages that really impact the
Speaker 7: price rises of twenty twenty one and twenty twenty two,
Speaker 7: those definitely seem to be smoothed out.
Speaker 2: Just got about forty five seconds quickly, Nikki. Are we
Speaker 2: going to see more of what we see in Zara
Speaker 2: where you dump stuff into a bin and it comes
Speaker 2: up on a monitor and we don't need workers And
Speaker 2: I'm taking off the security tag.
Speaker 4: Uniclide does it too?
Speaker 7: Yeah, Uniclode has definitely been a forerunner there. You know,
Speaker 7: it's both of those companies kind of went on their
Speaker 7: own to kind of drive that innovation, and the rest
Speaker 7: of the technology industry hasn't completely caught up with that.
Speaker 7: So I do think that we can get to that point,
Speaker 7: but I think there's going to be a delay. They
Speaker 7: like custom built their own solutions to do that.
Speaker 2: And I'm going to be back in the stock room
Speaker 2: real quick. Mollie Smith. Just got about fifteen twenty seconds.
Speaker 2: What's your next focal point?
Speaker 6: Oh goodness, I think we've got PPI tomorrow right hopefully?
Speaker 5: Is really a focal point?
Speaker 6: I mean, look, it's another inflation point, you know, it's
Speaker 6: another thing before September and then I guess Jackson Hole.
Speaker 5: But the US opened obviously we more important.
Speaker 2: Wait a minute, Okay, good.
Speaker 4: Kat talking to Mollie Smith and not talking about it.
Speaker 2: And I can tell you already there's going to be crowds.
Speaker 2: And if you want to look for a sign of
Speaker 2: consumer spending at the higher end, tickets are.
Speaker 4: Already have sold out for some days.
Speaker 5: What do we think the Honeydews is going for?
Speaker 2: Molly Smith, Nicky Bard, thank you so much.
Speaker 3: Over ad aptos. This is Bloomberg.
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Speaker 2: We're going to talk a little bit more about Tapestry.
Speaker 2: As Charlie mentioned, you know who they are. They own
Speaker 2: coach Kate Spade, you know, used to be coached but
Speaker 2: rebranded a few years ago.
Speaker 4: I was going to say, I don't know if everyone
Speaker 4: knows who they are. I think like when this rebranding happened, Carol,
Speaker 4: I was like, I'm gonna have such a hard time Keeping,
Speaker 4: Capri and Tapestry straight and like what companies they own.
Speaker 2: I was gonna like, I feel like I'm gonna age myself,
Speaker 2: although I was not.
Speaker 3: I was young, or it was my older.
Speaker 2: Sister's album, but Carol King and Tapestry, like, every time
Speaker 2: I see it, I'm like Tapestry.
Speaker 3: That's all I can think of.
Speaker 2: Of that album anyway. Yes, Capri Holdings, though it was
Speaker 2: created by Michael Cores, it owns Versace, it owns Jimmy Cho,
Speaker 2: so it definitely is kind of your higher end eight
Speaker 2: and a half billion dollar deal, as Charlie laid out,
Speaker 2: and so we are seeing some movement when it comes
Speaker 2: to luxury goods. I feel like that has certainly been
Speaker 2: a bright spot when it comes to retail, although, forgive me, coaching,
Speaker 2: Kate's bait not inexpensive, but I don't know if I
Speaker 2: put that in the same category as something like an lvmah.
Speaker 4: Well, I'm glad he brought them up because that is
Speaker 4: the context here, right, taken on the European rivals, and
Speaker 4: we got a great group to really talk us through it.
Speaker 4: Bloomberg News US Luxury Retail Personal care Industries reporter Janete
Speaker 4: Newman joins us on the phone from New York City,
Speaker 4: and our Bloomberg Intelligence team Deborah Aitkins, senior analyst who
Speaker 4: covers global luxury goods, home beauty, and personal care. She
Speaker 4: joins us on the phone from London. Hey, Janette, I
Speaker 4: just want to start with you give us the context here,
Speaker 4: some of the deal terms, but also the context that
Speaker 4: you and the team wrote about on the Consumer Team
Speaker 4: earlier today.
Speaker 9: Yeah, thank you so much. And I also love the
Speaker 9: Tapestry album as well. I will just I will, I will,
Speaker 9: I will join you on that. I mean, I think,
Speaker 9: I think some of the context here is just that,
Speaker 9: you know, Coach went into the pandemic much stronger than
Speaker 9: Michael Core's and has come out of the pandemic much
Speaker 9: stronger than Michael Core's. And we're seeing that, you know,
Speaker 9: in the sense that now coaches parent company is taking
Speaker 9: is taking over at Michael Core's. And I think some
Speaker 9: of the reasons for that, I mean, you know, keep
Speaker 9: in mind, going back at decade, these companies used to
Speaker 9: be kind of head to head competitors, and Coach has
Speaker 9: really pulled ahead of Michael Cores. It's been able to
Speaker 9: raise prices, raised its brand, brand Cachet. It's done that
Speaker 9: through you know, some clever some clever designs. It's renovated
Speaker 9: its stores, whereas Michael Core's has struggled a bit more.
Speaker 9: It's still very present in some kind of lower end
Speaker 9: department stores. As you both mentioned, I mean Michael Core's
Speaker 9: is more a mass market coach, is not. You know,
Speaker 9: it's a level of competing with some of the LVMH's
Speaker 9: of the world. But it's definitely been able to charge
Speaker 9: more more for its handbags. And both of these companies,
Speaker 9: you know, together now, I mean they will have completely
Speaker 9: they will completely dominate the US handbag market all right
Speaker 9: here in the US.
Speaker 2: Well, Deborah, we want to bring you into this, as
Speaker 2: we've mentioned, senior analyst who covers global luxury goods, home, beauty,
Speaker 2: and personal care for our Bloomberg Intelligence team. She's on
Speaker 2: the phone in London, Debra, how do you see this deal?
Speaker 2: And is it about the Michael Core's brand, Is it
Speaker 2: about Jimmy too? Is it about fisaces?
Speaker 3: All of it? Like, how are you thinking about this?
Speaker 10: So they all have their place are but when we
Speaker 10: think about microcres seventy of the business, you know, the
Speaker 10: purchase price there it's about really reinventing the micro courts
Speaker 10: that manage to do so. I see that in the
Speaker 10: US will be the big market in the fixed market,
Speaker 10: in digital, in wholesale, but but also you know, there's
Speaker 10: there's much more to do elsewhere, and I just feel
Speaker 10: that Michael Cares has lost its way. It really reinvented
Speaker 10: itself a few years ago, and then I felt it
Speaker 10: became too saturated in the marketplace and there's more to do.
Speaker 10: And I feel that the data composition and the way
Speaker 10: that digital works and the way that if we think
Speaker 10: about the way that Tapestry works, that they depend less
Speaker 10: on wholesale accounts, which is really felt the pain in
Speaker 10: the US in the last few months, then that could
Speaker 10: be beneficial. The other side of it for me that
Speaker 10: there's a lot to do with Sosauce and Jimmy Cho.
Speaker 10: They're not sizable. There was always a comment that the
Speaker 10: SARChI could double and that it should be doing more
Speaker 10: in Europe too, and it gives it gives a footprint
Speaker 10: for Tapestry into that luxury market which is so much
Speaker 10: more profitable and much faster growth.
Speaker 2: Jenett, I want to bring you in back. I'll bring
Speaker 2: you back in I'm looking at Tapestry down about sixteen
Speaker 2: percent it's been it's that it's pretty much its lows
Speaker 2: of the day, and Capri no surprise as being the
Speaker 2: target here is just not quite a premium right, at
Speaker 2: quite a premium right in terms of this deal. I
Speaker 2: mean it's up fifty five percent. I'm looking at it's
Speaker 2: an eight and a half billion dollar deal and we're
Speaker 2: looking at a market cap of six point three billion, So,
Speaker 2: you know, it's just kind of interesting in terms of
Speaker 2: some of the financials Tapestry shares. Not surprising for it
Speaker 2: to be down as the acquirer, but it seems like
Speaker 2: a lot is that investors saying you paid too much.
Speaker 9: I think part of it is an investors questioning how
Speaker 9: easy it will be for Tapestry to turn around the
Speaker 9: Michael Core's brand, which has some of the you know,
Speaker 9: the problems that that Debra, that Debra laid out right,
Speaker 9: I mean, Tapestry is essentially coach coaches the majority of
Speaker 9: its revenue, and Michael and Capri is essentially Michael Core's
Speaker 9: that's that's the bulk of it of its revenue, something
Speaker 9: around like seventy percent. And as Debra said, it's been
Speaker 9: a brand that's been struggling, and so to make this
Speaker 9: deal really work, Tapestry has to turn around Michael Core's.
Speaker 9: And you know, people would say, okay, well, the executives
Speaker 9: at Tapestry, they've been able to turn around the Coach brand.
Speaker 9: You know, think about the Coach brand a decade ago
Speaker 9: and think of where it is now. It's really elevated it.
Speaker 9: But the question is still there, you know, whether they'll
Speaker 9: be able to turn around the Michael Core's brand. And
Speaker 9: keep in mind, you know, they turned around Coach. They
Speaker 9: did a okay job turning around Cape Spain, although that's
Speaker 9: still a work in progress. They did not turn around
Speaker 9: Stuart Wisman. Their other brands. That's kind of that's kind
Speaker 9: of in the dumps, and now they're taking on three more.
Speaker 9: So the question is still there if they'll be able
Speaker 9: to kind of take this successful Coach playbook and apply
Speaker 9: it to Michael Core's while they obviously are juggling a
Speaker 9: lot of other a lot of other new companies that
Speaker 9: they've acquired to at any.
Speaker 4: Regulatory risk here, I think that's that's.
Speaker 9: A question that's been it's been raised, and we'll, you know,
Speaker 9: obviously we'll have to We'll have to see I mean
Speaker 9: this some of the data that we that we have
Speaker 9: from Global Data and Analystic Global Data. Uh, you know,
Speaker 9: these two companies combined will be the fourth largest luxury
Speaker 9: company in the world, with a market share of around
Speaker 9: five point one percent. In the Americas, they'll be the
Speaker 9: second largest player behind LVMH. So that those those numbers
Speaker 9: make people think that's not as much of the concern,
Speaker 9: but that is still to be sure.
Speaker 2: Debra as an analyst who's covering this sector, and I
Speaker 2: do wonder how much time do you think, you know,
Speaker 2: investors need to give Tapestry to be able to kind
Speaker 2: of figure out how they turn around the core's brand.
Speaker 3: Knowing maybe some of the problems.
Speaker 2: I have to say, I feel like I see cores
Speaker 2: everywhere and I feel like it's a little saturated.
Speaker 3: Maybe that's part of the problem.
Speaker 10: Yeah, yeah, I would say this is a two to
Speaker 10: three year fixed. I mean, it doesn't it's not let
Speaker 10: a complete until calendar twenty four, So we probably see
Speaker 10: by maybe end of first quarter twenty four that this
Speaker 10: deal completes through and from there we wait two years
Speaker 10: for two hundred million synergies to move through. We end up.
Speaker 10: I think with a maybe an an adjusted EBITDA margin
Speaker 10: on the back of that that's probably one hundred and
Speaker 10: fifty basis points and get it to mid teen's operating margin.
Speaker 10: But versus some of those peers, as appears, that still
Speaker 10: isn't enough. So for me, I think it's a two
Speaker 10: to three year process, and I feel that standalone could
Speaker 10: pre given where the debt was and how it needed
Speaker 10: to turn everything, that it maybe is better within this
Speaker 10: portfolio because of that wholesale adaptation of the model, because
Speaker 10: of the data capture, because of working more closely with digital.
Speaker 10: There's a big difference between these. But the other side
Speaker 10: of it is I actually feel that it's in the
Speaker 10: price that this was going to happen. And when we say,
Speaker 10: you know stocks are very much today, trailed back over
Speaker 10: a year and was looking at a mix of buy
Speaker 10: and hold, arm or are on a function looking at
Speaker 10: potential price target, it's about above an AD when we're
Speaker 10: looking at recommendation. But that price target was seventy dollars,
Speaker 10: and I know that was now over sixty percent of
Speaker 10: the market was into the Northern Road put, which is
Speaker 10: cooled down, but it's not fair gitten into the biggest ye.
Speaker 2: Of our Bloomberg Intelligence team and Jeanette Newman of course
Speaker 2: at Bloomberg News who both of them. Of course, following
Speaker 2: this space.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern on Bloomberg Radio,
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Speaker 1: Just say Alexa play Bloomberg eleven thirty, tim you got to.
Speaker 2: Say What's straight to the CDC website for the stats
Speaker 2: on this and found each year, approximately thirty thousand cases
Speaker 2: of lime disease are reported to the CDC by state
Speaker 2: health departments and the District of clumber How Columbia. Excuse me, However,
Speaker 2: this number doesn't reflect every case, and I guess they
Speaker 2: say it could be if you use different estimates and
Speaker 2: method dology.
Speaker 3: I'll get it out.
Speaker 2: It could be as much as almost half a million
Speaker 2: people may get lime disease every year in the US.
Speaker 4: Because the other issue we're going to talk about this
Speaker 4: for the next you know, ten minutes. Yeah, the other
Speaker 4: issue is that these cases don't necessarily all present symptoms
Speaker 4: in the same way exactly. There's no clear definition coming
Speaker 4: from medical professionals.
Speaker 3: All right, so let's get to it.
Speaker 2: Nicoled bomb Garth is with us, professor of Molecular Microbiology
Speaker 2: and Immunology at the Johns Hopkins Bloomberg School of Public Health, which,
Speaker 2: as you know, supported by Michael R. Bloomberg, founder of
Speaker 2: Bloomberg LP and Bloomberg Philanthropy. Is Nicole joining us on
Speaker 2: ZOOM in Baltimore. Nicole, nice to have you here with us.
Speaker 2: Lime disease summer. I think about it. I'm up in
Speaker 2: you know, if you're up in Connecticut or out in
Speaker 2: the woods, like you know, you know that this is
Speaker 2: something you need to think about it. Tell us, though,
Speaker 2: from your perspective, how bad really? I can talk about cases,
Speaker 2: but how.
Speaker 3: Bad is it?
Speaker 2: And as Tim said, it's not necessarily the same thing
Speaker 2: for everyone? And what does bad mean in terms of
Speaker 2: the impact it has on individuals.
Speaker 11: Yes, thank you for having me and for this topic.
Speaker 11: I think you're raising a very important point. We're just
Speaker 11: that in most cases individuals who get bitten by a
Speaker 11: tick and develop lime disease, we'll go to the GP
Speaker 11: and get the necessary antibiotics and we'll recover fully by
Speaker 11: the small subset of patients not and that could be
Speaker 11: because maybe their diagnosis was delayed, that may not have
Speaker 11: known that they had a tick bite all because of
Speaker 11: some genetic predisposition that we don't really fully understand. And
Speaker 11: the developed disease that can be very debilitating. It can
Speaker 11: lead to long term consequences. So people talk about having
Speaker 11: brain fall, not being able to concentrate, developing a neurological symptoms,
Speaker 11: and unable to function, and that really is life changing
Speaker 11: for these individuals.
Speaker 4: Professor. I've talked to people who have hadline disease and
Speaker 4: they tell me the resistance that they came up against
Speaker 4: in their diagnosis from the medical community about being diagnosed.
Speaker 4: And I'm wondering if you can speak to that at all,
Speaker 4: if that's changed in recent years as we become more
Speaker 4: aware of it and more aware of the symptoms.
Speaker 11: Yeah, I think it has has changed. I mean I
Speaker 11: think where the resistant was was never to you know,
Speaker 11: you appear at your GP's office and say you've seen
Speaker 11: a tick or you've been out in the woods, and
Speaker 11: now you display these symptoms. You may even have that
Speaker 11: that very distinct woods I rush A gpiece would immediately
Speaker 11: come to the conclusion that are more likelihood you have
Speaker 11: line disease. It's really those protracted cases where you have
Speaker 11: these very non specific symptoms of feeling tired and having
Speaker 11: this brain fog and having pains and aches that are
Speaker 11: really hard to pinpoints, so very non specific, and then
Speaker 11: not having this history of having been out in the woods,
Speaker 11: not making not being able to make this connection where
Speaker 11: people really are resistant and you know, if the diagnosis
Speaker 11: is protracted, you may have been out in the woods,
Speaker 11: but you don't recall it. It's now weeks and months ago,
Speaker 11: and many of us go go hiking frequently. So that
Speaker 11: is really where the non specific nature of the symptoms
Speaker 11: and we don't really have a really good diagnostic and
Speaker 11: some of the patients that are being diagnosed don't come up.
Speaker 4: With a positive dict like there's no test or the
Speaker 4: test just yeah, I mean, forgive me, but I don't
Speaker 4: know much about this. There's no test, or the test
Speaker 4: doesn't show you know, the test isn't conclusive.
Speaker 11: So when there is a test, and it's actually two
Speaker 11: tests and you have to be positive in both tests
Speaker 11: in order to be qualified by Celici criteria of having
Speaker 11: lime disease, the problem comes when only one of the
Speaker 11: tests shows are positive or the test doesn't show exactly
Speaker 11: you know, isn't positive for all the criteria. So it's
Speaker 11: not a very simple yes no test like we're used
Speaker 11: to it, like what's the COVID test. It's a little
Speaker 11: more complicated. And so so that is when the problem
Speaker 11: comes in. And that again goes back to patients maybe
Speaker 11: having had the infection but a long time ago, and
Speaker 11: so it's not so clear to diagnose some using this test.
Speaker 11: So the test, a positive test is always clear, but
Speaker 11: when the tests are negative, you don't know whether really
Speaker 11: means you haven't hadlines.
Speaker 2: Hey, one thing, I'm curious whether it's limes disease or
Speaker 2: something else, Nicole, Are you thinking more and more about
Speaker 2: just the world's getting really populated and we are increasingly
Speaker 2: pushing animals out of their normal domains and just living
Speaker 2: closer and closer to them.
Speaker 3: Is this just kind of part of.
Speaker 2: The problems, whether it's limes disease or other illnesses, if you.
Speaker 11: Will, it clearly has to do It has to do
Speaker 11: with you know, climate change ticks on the move. You
Speaker 11: know they're moving because it's warmer now and areas that
Speaker 11: can move into areas that the previously didn't in the
Speaker 11: hospital for them. And it is what you said, the
Speaker 11: sort of us getting out there in areas that we
Speaker 11: previously didn't worn out, and so we are really getting
Speaker 11: into the life cycle that has been evolutionally established over
Speaker 11: a very long period of time, and we are sort
Speaker 11: of interrupting done as much as they're interrupting us.
Speaker 4: When I was preparing for this, there's actually a map
Speaker 4: on the CDC website that shows lime disease cases over
Speaker 4: time by different states, and you can start it twenty
Speaker 4: years ago, back in two thousand and one and see
Speaker 4: the way that it's migrated. It's pretty remarkable, and not
Speaker 4: in a good way. So, Professor, I'm wondering about vaccine
Speaker 4: here because my understanding is that Viser's working on something
Speaker 4: and it's been delayed, but it's in stage three trials
Speaker 4: right now. What can you tell us about a vaccine
Speaker 4: for lime disease.
Speaker 11: I think it's absolutely doable, as I heard the band
Speaker 11: before I came on. Yes, we're giving it to our paths, right.
Speaker 11: Dogs get the lime vaccine, horses can get a lime vaccine,
Speaker 11: and so I think it's absolutely doable to develop one
Speaker 11: I'm very excited about the clinical trial. It has been
Speaker 11: delayed and there have been some problems, so I hope
Speaker 11: it we'll go forward and give us good results. The
Speaker 11: challenge with any vacciners that because you know, we're getting
Speaker 11: now into the quoder months, so the number of lime
Speaker 11: disease cases is going down. This is obviously a challenge
Speaker 11: for vaccine to show efficacy, but just really can we
Speaker 11: reduce the number of cases of lime disease in the
Speaker 11: population that got vaccinated. So it's a matter of how
Speaker 11: many people do we vaccinate right, and then how many
Speaker 11: of them would normally get lime disease. So it's not
Speaker 11: a straightforward clinical trial, but I'm very hopeful that it
Speaker 11: will show hopefully efficacy.
Speaker 2: Because I have a really silly question because I do
Speaker 2: think about my dogs, you know, flee in tich and
Speaker 2: there's medicine we give that used to be some chemicals
Speaker 2: on the back and now it's a pill that's got
Speaker 2: like all these different things. I mean, if we could
Speaker 2: do it with pets, why is it kind have taken
Speaker 2: so long for us to maybe do something for humans.
Speaker 2: And if it's not safe for my pet, maybe I
Speaker 2: don't want to be given to my pet.
Speaker 11: Yeah, I mean we don't want to go into order.
Speaker 11: But I mean there was a vaccine on the market,
Speaker 11: of course twenty over twenty years ago that was taken
Speaker 11: off the market, but it wasn't taking off the market
Speaker 11: because of law efficacy. There wasn't an idea that it
Speaker 11: may cause side effects that we didn't want.
Speaker 4: So those with those understanding is those were unfounded, and
Speaker 4: it came at a time where there was a lot
Speaker 4: of skepticism about vaccines.
Speaker 11: Absolutely correct, Yes it turned out to be unfounded. But
Speaker 11: I think once you have that doubt that something, maybe
Speaker 11: you don't want to give something that's supposed to prevent
Speaker 11: a disease on cause of disease, right, So to err
Speaker 11: on the side of caution, I think, and really yeah,
Speaker 11: to not have the headaches of people going off you're
Speaker 11: for trying to give a vaccine. I think people the
Speaker 11: company pointed off the market, which I think overall is unfortunate. Right,
Speaker 11: you're seeing rights and cases. We need to really develop
Speaker 11: a vaccine.
Speaker 4: We have thirty seconds left. Just give us three tips
Speaker 4: on how to stay safe from ticks for the remainder
Speaker 4: of the summer.
Speaker 11: Yes, we're long sleeved pants and shirts, and you know,
Speaker 11: be a be a goof and put your socks, trousers
Speaker 11: into your socks, and check yourself after you arrive home
Speaker 11: for ticks and and your loved ones as well, and
Speaker 11: maybe have a shower because some tics you can before
Speaker 11: they're fully attached, you might be able to shower them away.
Speaker 2: We felt like we feel like little monkeys at home
Speaker 2: because we're always checking each other.
Speaker 4: You got to do that, And god.
Speaker 2: I've spent hours pulling ticks from my dog and the
Speaker 2: call bombguard. She is molecular micropology and immunology professor at
Speaker 2: John's Hopkins Bloomberg School of Public Health.
Speaker 3: Thank you so much for joining us.
Speaker 1: This is Bloomberg Business Wait inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Hailey Berg is back with us lead economists at the
Speaker 2: travel app Hopper, and she joins us on ZAM from Boston.
Speaker 2: First of all, Haley, we got that CPI print. We
Speaker 2: did see airline prices coming down. Talk to us about
Speaker 2: the environment, right now. What's going on in terms of pricing.
Speaker 12: When we look at the domestic market, A lot of
Speaker 12: what we're seeing this year is being driven by increased
Speaker 12: capacity from airlines. We typically see a pretty tight relationship
Speaker 12: between fares and how many seats are available to book.
Speaker 12: Right now, we're above twenty nineteen levels. There are more
Speaker 12: seats available to book on domestic airlines and there were
Speaker 12: at this time in twenty nineteen. That combined with better
Speaker 12: jet fuel prices down significantly from last year, still a
Speaker 12: ways to go compared to twenty nineighteen, and demanded opening
Speaker 12: up to international destinations, all has combined and has really
Speaker 12: added to a seasonal effect. Typically fares drop at this
Speaker 12: time of the year, but that's being compounded by this
Speaker 12: increase in supply shift and demand and some relief fun costs,
Speaker 12: and that's how we end up with prices about ten
Speaker 12: percent lower than last year and versus twenty nineteen.
Speaker 4: So did the international tickets are they just like totally
Speaker 4: exempt from this we're seeing because since demand is so high,
Speaker 4: international is continuing to be expensive.
Speaker 12: International remains extremely expensive on long haul routes. Think fares
Speaker 12: to Asia well over fourteen hundred dollars up almost sixty
Speaker 12: percent in economy. That would be an average what we
Speaker 12: call a good deal price. So at economy basic economy
Speaker 12: ticket pretty much anything excluding first or business.
Speaker 3: All right, so Asian? What about Europe? Specifically?
Speaker 12: Europe was very expensive this summer peaks over fourteen hundred
Speaker 12: dollars a ticket, but we have seen significant improvement in
Speaker 12: the last couple of weeks. Some of that is seasonal,
Speaker 12: some of that is supply. Airlines have gotten back to
Speaker 12: about ninety seven percent of twenty nineteen capacity, so we
Speaker 12: have seen demand shift back international. If it feels like
Speaker 12: everyone you know is in Italy, it's because they probably are.
Speaker 7: I feel like the.
Speaker 4: Third person, like the third person to say that to
Speaker 4: me in twenty four hours.
Speaker 3: You're so everybody's going like if you.
Speaker 4: Open up Instagram, apparently, yeah, where's the place to go? Sicily?
Speaker 4: Is it like because of the white Lotus?
Speaker 12: We are definitely seeing some what we call set jetting,
Speaker 12: So Palermo and Tara Mina in Sicily are very popular.
Speaker 12: But then some of the usual suspects we see, the
Speaker 12: Amalfi Coast Rome and Milan like Como very popular at
Speaker 12: this time of year.
Speaker 2: So what happens. Does it stay this way or then
Speaker 2: once we start to get closer to holidays it starts
Speaker 2: we start uptick.
Speaker 12: On the domestic front, we have a couple more weeks
Speaker 12: of these low fares. We're expecting them to bottom out
Speaker 12: this month, and then they'll start rising in late September
Speaker 12: early October when travelers are starting to plan those trips
Speaker 12: for Thanksgiving and Christmas, and we'll see them rise back
Speaker 12: to reach about pre pandemic levels. In December, we'll pretty
Speaker 12: much match where we were in twenty nineteen and twenty
Speaker 12: twenty two in December about toot eighty a ticket if
Speaker 12: you're booking something at the end of the year.
Speaker 4: Okay, so when should we be booking for holidays?
Speaker 12: Not yet, it's too really, I think it's truly getting
Speaker 12: everyone is feeling trigger happy. But the sweet spot for
Speaker 12: booking your trips home for the holidays is actually from
Speaker 12: about September fourteenth to October fourteenth. So that four week
Speaker 12: window at the end of September and early October, fares
Speaker 12: for trips home for the holidays they start incredibly high.
Speaker 5: In the summer.
Speaker 12: You'd be paying about twenty percent more than previous years.
Speaker 12: If you booked right now, But if you wait, they're
Speaker 12: going to come down during that sweet spot. That's really
Speaker 12: when you want a book.
Speaker 2: So you're saying, if I've got a kid to bring
Speaker 2: back home overseas because of college overseas, I got to
Speaker 2: book that ticket pretty soon.
Speaker 12: Yes, international affairs for the holidays. You'll want a book
Speaker 12: between now and probably the end of September. So you've
Speaker 12: got a couple of weeks, maybe two months.
Speaker 4: You've got to tell her now or else you won't
Speaker 4: do it.
Speaker 12: Non stop ticket on a popular route and you see
Speaker 12: a good deal, definitely go on.
Speaker 4: You know what's funny though the kids, The kids haven't
Speaker 4: even left yet for their trip.
Speaker 2: That's what I'm saying, she's here right now. Yeah. What
Speaker 2: about what about hotels and I don't know, cruises. What
Speaker 2: are some of the other things that you're seeing When
Speaker 2: it comes to travel and costs.
Speaker 12: Hotels are still pretty expensive. Prices are about ten to
Speaker 12: eleven percent higher in this time last year, about one
Speaker 12: to eighty a night for a US hotel.
Speaker 5: But something to keep in mind.
Speaker 12: Is travel behavior. We are definitely travelers now who are
Speaker 12: planning a little bit more less minute. When it comes
Speaker 12: to flights, that's actually a good thing for hotel booking.
Speaker 12: Booking hotels at the last minute, as long as it's
Speaker 12: not a major resort that sells out early, can actually
Speaker 12: save you about twenty five percent off of peak prices.
Speaker 5: Because most people plan ahead.
Speaker 12: If you're booking the last couple of days before check in,
Speaker 12: hotels drop prices, you can actually save a significant amount
Speaker 12: if you're a procrastinator.
Speaker 4: I want to go back to the fuel costs and
Speaker 4: to what extent fuel costs have to do with high
Speaker 4: ticket prices. Do you know, Hayley, what portion of an
Speaker 4: airline ticket is accounted for in fuel costs? Or I
Speaker 4: should say, what portion of a ticket you know is
Speaker 4: made up of fuel costs.
Speaker 12: It varies by airline, depending on you know their operational
Speaker 12: expenses in general, but also whether they're hedged. But traditionally
Speaker 12: we've seen somewhere between fifteen and thirty percent of operational
Speaker 12: expenses coming from fuel. It also differs by domestic and international.
Speaker 12: Those long haul routes are less efficient with fuel. But typically,
Speaker 12: you know, if we see a ten percent increase in
Speaker 12: jet fuel prices, for example, we might expect about three
Speaker 12: percent of that to be passed on to three percentage
Speaker 12: of that ten percentage passed on to consumers.
Speaker 2: Hayley just got thirty seconds. Any signs of recession in
Speaker 2: the data and what you are seeing in the trends
Speaker 2: that you are seeing.
Speaker 12: We have been looking for it for maybe eighteen months now,
Speaker 12: and I can say we still have not seen weakness
Speaker 12: in demand in spending, in what we hear from our
Speaker 12: users on the Hopper app on the whole, we're hearing
Speaker 12: we're spending. We're spending more than we have historically, We're
Speaker 12: taking more trips, and we're also seeing that in the
Speaker 12: data what our bookers are actually doing so seem to
Speaker 12: see strength and travel continuing.
Speaker 4: I'm just going to say we have to go, but
Speaker 4: I'm just going to get on a little rant here.
Speaker 4: The airports are too crowded, they're gross. Being on an
Speaker 4: airplane is no fun unless you're at the first on
Speaker 4: the plane. It's miserable, and yet we pay through the
Speaker 4: nose for it.
Speaker 3: You are a crank man.
Speaker 4: It is like when traveling with kids.
Speaker 3: The thing it's like, it is hard, it's very difficult.
Speaker 4: You expect me to change a diaper here, and then
Speaker 4: when you get me a dirty.
Speaker 3: The little one crising.
Speaker 2: There's like, hey, I don't care any there, They're fine.
Speaker 2: Haley Burg, lead economist of Red Hopper, Thank you so much.
Speaker 3: This is Bloomberg Umbro mac.
Speaker 7: A Journal.
Speaker 1: How about you let me drive?
Speaker 11: Oh no, no, no, no please, holright please, I'll do gravel
Speaker 11: wat I want to try it. It's a good question.
Speaker 1: This is the Drive to the Clothes Timing well yold
Speaker 1: it on on Bloomberg Radio.
Speaker 2: Right, TikTok, everybody. Just about seventeen and a half minutes
Speaker 2: left to aim today's trading session. Carol Master along with Tim'
Speaker 2: stenemiclive in our Bloomberg Interactive book or studio on YouTube
Speaker 2: and Bloomberg Originals. And I think Romayne said it really
Speaker 2: well in terms of the bouncing around that we are seeing,
Speaker 2: certainly in the equity trade. I feel like that's been
Speaker 2: going on throughout the week, Tim, But you got yields there.
Speaker 1: Good.
Speaker 4: I it's kind of wild today, Carol. You you look
Speaker 4: at the Nasdaq, for example, and it was up as
Speaker 4: much as seven tenths of a percent yeah earlier today?
Speaker 4: Yeah down now down?
Speaker 5: Yeah?
Speaker 2: Down right?
Speaker 12: Yeah?
Speaker 1: Yeah?
Speaker 3: Kind of flat.
Speaker 2: I you know, I think we're going to live from
Speaker 2: data point to data point, and we're also going to
Speaker 2: wait until kind of the next FED meeting. I feel
Speaker 2: like that's going to be our life for a little bit.
Speaker 2: But let's see what Aaron Kennon says. He's much smarter
Speaker 2: than me, that's for sure, and is in it. He is,
Speaker 2: of course, co founder and CEO Clear Harbor Asset Management.
Speaker 2: They've got about a billion in assets under management. Joining
Speaker 2: us once again on Zoom from Stanford, Connecticut. Hey, Aaron,
Speaker 2: good to have you back with us. It is an
Speaker 2: interesting market, but let's have some Tim Oways reminds me
Speaker 2: got to take a longer view step at a little
Speaker 2: bit in the perspective. We've had quite a run, certainly
Speaker 2: when it comes to some of those big tech names
Speaker 2: and the Nasdaq overall and.
Speaker 3: Also the S and P.
Speaker 2: So a little bit of churn maybe is to be expected.
Speaker 8: Absolutely, Yeah, thanks for having me back, Tim Carroll. We've
Speaker 8: gone a long way a year to date, and what
Speaker 8: a change from twenty twenty two, for sure. But you know,
Speaker 8: if you look at just this earning season that we're
Speaker 8: still sort of wading through, but we're more on the
Speaker 8: tail end of it, you know. I think the reality
Speaker 8: is that we've many companies, or the most of the
Speaker 8: companies have beaten expectations, but when you look at year
Speaker 8: over year earnings growth, not much has changed, and so
Speaker 8: those expectations have have been exceeded, which is something that
Speaker 8: we all all welcome. But markets haven't reacted, you know,
Speaker 8: dramatically as a whole to the earning cycle. And I think,
Speaker 8: you know, the market's trying to figure out whether or
Speaker 8: not a pe multiple for the S and P five
Speaker 8: hundred at twenty times anticipated twenty twenty three full year
Speaker 8: earnings is the right multiple given the current environment.
Speaker 4: Do you think it's the right multiple?
Speaker 8: Well, you know, it's interesting. I think the bond market
Speaker 8: is signaling two different responses to that, and I always
Speaker 8: sort of, you know, peer into the bond market to
Speaker 8: try to help me answer that question.
Speaker 11: Tim.
Speaker 8: The inversion of the yield curve suggests that a recession
Speaker 8: is in fact around the corner, whether it's the back
Speaker 8: half of this year or perhaps the front half of
Speaker 8: next year. But nominal rates are actually higher on a
Speaker 8: year to date basis, which is sort of a little
Speaker 8: bit of a conundrum for those who are trying to
Speaker 8: extract tea leaves from what the bond market is telling
Speaker 8: us right now, we think, you know, when you look
Speaker 8: at the trajectory of inflation. We saw CPI this morning,
Speaker 8: and you know, a year and one month ago we're
Speaker 8: at nine percent headline and now we're at three point
Speaker 8: two percent. So we've come a long way. And the
Speaker 8: FED if you look at FED fund's futures, looks like
Speaker 8: it's it's on hold. I think there's only like a
Speaker 8: ten percent chance of a move in September, and so
Speaker 8: you know, it's just sort of interesting thing, particularly with
Speaker 8: the significant i think the most significant short interest in
Speaker 8: the treasury market that we've seen in my lifetime. Where
Speaker 8: we are right now, where the bond markets sort of
Speaker 8: signaling that maybe we're not all clear on inflation, maybe
Speaker 8: growth remains stronger than expected, and the equity market is
Speaker 8: a little more a sanguine on that point.
Speaker 2: So PE multiple how reliable? How much do you use
Speaker 2: it as kind of an indicator, a reliable indicator of
Speaker 2: where we go from here?
Speaker 8: It's not a first of all, you have to look
Speaker 8: at which components of the equity market we're looking at
Speaker 8: when we talk about PE multiples, because it's where we
Speaker 8: come from in Pes where we may be going what's
Speaker 8: the historical basis for pees if you think we're going
Speaker 8: into a deep recession, pe multiples for the S and
Speaker 8: P five hundred ten to bottom at fourteen times fifteen times,
Speaker 8: So you know, that's an anchoring point if you believe
Speaker 8: in our landing markets, certainly not pricing that in. You
Speaker 8: also have to think about P multiples within sectors. You know,
Speaker 8: you look at Europe, you look at you know, heavily
Speaker 8: industrial banking focused part of the equity market. Well, naturally
Speaker 8: P multiples because it's a lower growth segment of the
Speaker 8: market and the economy are going to be lower. So
Speaker 8: it's not healthy for one to sort of look through
Speaker 8: the S and P at twenty times in compared to
Speaker 8: the European market that has far less technology and therefore
Speaker 8: growth exposure.
Speaker 4: Okay, so I ask you this question all the time. Eron,
Speaker 4: someone comes to you with money, how do you deploy
Speaker 4: it right now?
Speaker 8: Well, you know, oftentimes people come to us with capital
Speaker 8: that's invested. You know, we're very cognizant of tax implications.
Speaker 8: I would just say this, based on where we think
Speaker 8: inflation is moving, we are incrementally more bullish on taking
Speaker 8: a bit more duration risk in fixed income here, in
Speaker 8: other words, extending out into fixed income, owning high grade
Speaker 8: fixed income that means to US treasuries, mortgage backed securities,
Speaker 8: and maybe even some investment great credit exposure. On the
Speaker 8: equity side, we still believe in diversification. We think there
Speaker 8: are opportunities across multiple sectors. We're just not given the
Speaker 8: current valuation in the market, we're not poised to sort
Speaker 8: of increase our targets here. But we do believe in
Speaker 8: equities for the long haul, and that's a philosophy that
Speaker 8: we've always embraced here at Clear Harbor.
Speaker 2: Hey, on the treasuries are the fixed income side, what
Speaker 2: kind of duration you said you're willing to go out
Speaker 2: a little bit?
Speaker 3: How far out?
Speaker 8: Yeah, Well, if you look at the Bloomberg Gaggregate bond Index,
Speaker 8: which is the primary benchmark of the fixed income market,
Speaker 8: it has an average weighted maturity of about eight and
Speaker 8: a half years, maybe a little more than that. And
Speaker 8: of course, you know, it seems like mister market in
Speaker 8: fixed income is hugging the front end of the market
Speaker 8: right now because treasury bills are well over five percent
Speaker 8: and the yield to maturity of the Bloomberg gaggrigate is
Speaker 8: only about four point nine percent. But if you think
Speaker 8: the FED is sort of done or about done, we
Speaker 8: think this is a good time to at least nudge
Speaker 8: your average maturity and duration further out the curve. So
Speaker 8: it depends on the client, depends on you know, what
Speaker 8: the objectives are, but just moving it out. If your
Speaker 8: average maturity is now one year's you know, maybe you
Speaker 8: can move it out to two or three. If you
Speaker 8: can move it out to eight and a half and
Speaker 8: you're at two now, maybe you move it out to
Speaker 8: four or five, you know. So you know, it's making
Speaker 8: those sort of incremental shifts right now, given the sort
Speaker 8: of risk reward that we see in the market.
Speaker 2: Right which maybe explained to where I think was it
Speaker 2: the thirty year today? The treasure auction didn't go as
Speaker 2: well as I think some of the auctions earlier in
Speaker 2: the week. Maybe some of that longer duration erin. Thank
Speaker 2: you so much, We get a run if you well
Speaker 2: Erin Kennon, co founder CEO at Clear Harbor Asset Management
Speaker 2: over a billion in assets under management, joining us on
Speaker 2: zoom from Stanford, Connecticut. What's do you look like you're
Speaker 2: thinking about something?
Speaker 11: Yeah?
Speaker 4: Yeah, I was looking at the wrong column. The Nasdaq
Speaker 4: was hired by one point six percent earlier today. I
Speaker 4: remember was starty this morning, you know, recording our weekend show. Yeah,
Speaker 4: I said, look at the look at the market.
Speaker 3: We popped.
Speaker 4: We popped in an hour.
Speaker 3: The easy inflation prend I think made everybody find.
Speaker 4: Out then what happens higher for longer? Oh that's new news.
Speaker 10: I told you.
Speaker 3: Did you get the memo?
Speaker 4: The memo?
Speaker 3: All right, guys, stick around.
Speaker 2: More to come certainly here on Bloomberg Business Week, Carol
Speaker 2: Masser along with Tin Stanovik and this this Bloomberg Radio.
Speaker 1: This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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