Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
Speaker 1: plus technology, politics, economics, all purnising the power of Business
Speaker 1: Week reporters and editors, not to mention our journalists and
Speaker 1: analyst in more than one twenty countries. You can download
Speaker 1: Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on the Bloomberg Radio or watch us
Speaker 1: on YouTube search Bloomberg clovel News. I just want to
Speaker 1: bring you one COVID headline, White House Chief Medical Advisor
Speaker 1: Andthony Fauci saying it a briefing earlier that the dynamics
Speaker 1: of the COVID nineteen outbreak in the US are pointing
Speaker 1: sharply downward. That's a trend line we'd like to see. Yeah,
Speaker 1: we're not seeing it just here in New York City,
Speaker 1: but throughout the United States as well. Let's get into
Speaker 1: it with Michael Dowling, President and CEO at north Well Health.
Speaker 1: He joins us on the phone from Long Island. Uh. Michael,
Speaker 1: it's great to have you back with us. Uh. You
Speaker 1: run New York's largest health system. Give us an idea
Speaker 1: of how things are looking inside north Well Health right now. Oh,
Speaker 1: things are looking very very well. Indeed, we are definitely
Speaker 1: on the exit ramp of of COVID and consistent we went.
Speaker 1: Dr Fauci indicated we only have about five hundred COVID
Speaker 1: patients in our facilities today and it is dropping each day,
Speaker 1: So we're in a good place. Um, we're moving back
Speaker 1: to a normality. Um, and which is I think we've
Speaker 1: all got to stop beginning to do now, even though
Speaker 1: COVID will always be hanging around for quite a while,
Speaker 1: but the devise civility is much much less, and things
Speaker 1: that things are looking very very positive. Indeed, you know, Michael,
Speaker 1: we know it wasn't easy, and I'm sure I can't
Speaker 1: even imagine the stresses as you guys went through it. Um,
Speaker 1: And we're just kind of looking in and hearing what
Speaker 1: was going on in healthcare systems like your own. My
Speaker 1: understanding is you kind of threw the budget out the window.
Speaker 1: How do you do that? Because you do have to
Speaker 1: ultimately think about the top and bottom line, and there
Speaker 1: was government assistance in some cases, but how do you
Speaker 1: do that or do you have it's it's it's a
Speaker 1: standard thing with us because we've had this situation with
Speaker 1: Hurricane and Sandy, Hurricane Irene, and ever so often bad
Speaker 1: things happened to you and you've got to be able
Speaker 1: to react, and especially when the community is in danger,
Speaker 1: either from a hurricane and or bad or or things
Speaker 1: like COVID. You can't be going around each and every
Speaker 1: day warning about the budget because you will you will
Speaker 1: not be innovative, you will not be creative, and you
Speaker 1: will not respond to what is needed to be responded to.
Speaker 1: So my message was do what is right, do everything
Speaker 1: we possibly can to help people, save people, protect people's lives,
Speaker 1: and we'll figure out the budget and the mechanics that
Speaker 1: it later, because otherwise you're you're going to be constraining
Speaker 1: your your activities. So during the height of COVID that
Speaker 1: the beginning in twenty our revenue dropped oh well over
Speaker 1: the billion and a half and it was scary moments,
Speaker 1: but we know that you're going to We wouldn't we
Speaker 1: knew that we had the attitude we're going to win
Speaker 1: against this virus. The virus is not going to beat this.
Speaker 1: We're gonna win. And then we had to come back
Speaker 1: and rebuild. Um, this is what you're doing the crisis.
Speaker 1: Where are you, Michael in terms of rebuilding? Now? How
Speaker 1: do you? How do you get back that lost time?
Speaker 1: And I believe we will come out this year. We
Speaker 1: will come out positive from a financial point of view.
Speaker 1: Are the end of the feral help? Just mentioned the
Speaker 1: subtle assistants help, but we stopped it too, uh to
Speaker 1: kind of pivot for bringing back regular business. You know,
Speaker 1: a couple of months after the height of the COVID
Speaker 1: crisis and in the spring of quinty. You know, one thing,
Speaker 1: I'm curious and we were all talking our planning call
Speaker 1: this morning about the business of running a healthcare system.
Speaker 1: And I was having a conversation with a doctor earlier
Speaker 1: in the week about just how slim the margins can
Speaker 1: be in terms of a hospital running efficiently and as
Speaker 1: it's supposed to all of a sudden the system being
Speaker 1: maxed and strained. How tight is it? It's very, very tight.
Speaker 1: But we had a fifteen in the fifteen points were
Speaker 1: Billy in dollar entity and we're not just hospitalizis you
Speaker 1: know very well, we have huge ambulatory occations and heart care,
Speaker 1: all of that, plus academics and research, but we run
Speaker 1: at the bottom one to one and a half cent Martin.
Speaker 1: It's tight. So you've got to be very efficient. You've
Speaker 1: got to be quite productive. You've got to be very
Speaker 1: very careful of how you operated. But you've got to
Speaker 1: move forward each and every day with a great sense
Speaker 1: of optimism. Um uh. And and still they do everything
Speaker 1: you possibly can to make sure we serve the community
Speaker 1: the best of all ability. It's not hard to make
Speaker 1: a margin. If you decide, for example, sit back and
Speaker 1: eliminate those services that you lose money on, those things
Speaker 1: that you do you get no money at all for,
Speaker 1: then you can come back and say, oh, we don't
Speaker 1: create we have a huge margin. But that's not in
Speaker 1: my view, that's not why we're here. We're here to
Speaker 1: do well, and we're here to do good. And um uh,
Speaker 1: we were if we have a margin strong enough to
Speaker 1: be a to you know, feedo balance sheet, commit to
Speaker 1: the investments we need to make in technology, in people,
Speaker 1: and in infrastructure, and then show a one to one
Speaker 1: and a half maybe up to two percent at the end,
Speaker 1: we're we're we're doing well. Um now not as well.
Speaker 1: We're in New York is a much more expensive place
Speaker 1: to be. We have unionized staff, which is more expensive.
Speaker 1: So you will see places around the country that are
Speaker 1: much higher margins. I'm not worried about them. I worried
Speaker 1: about what we do, and I think we focused on
Speaker 1: mission and as well as making sure we try to
Speaker 1: we make a margin to sustain an ongoing business. Well, Michael,
Speaker 1: that's why we're That's why we're here. What are the
Speaker 1: permanent shifts that you see in your business on the
Speaker 1: other side of COVID, we are the permanent changes you
Speaker 1: have made at north Well Health Well, um, let me.
Speaker 1: It accelerates a lot of what we were doing. Okay,
Speaker 1: not not a complete shift, but an acceleration. So, for example,
Speaker 1: COVID demonstrated the unbelievable benefit of having large, large ambulatory
Speaker 1: outpatient entities because they actually treated an awful lot of COVID.
Speaker 1: If you didn't have those should be in trouble. Trouble, um.
Speaker 1: It accelerated the use of harm care. It dramatically accelerated
Speaker 1: the use of technology. So we will never again be
Speaker 1: exactly the same and call me to me was a
Speaker 1: phenomenal learning experience. Capitalists of Change. It's one of them
Speaker 1: many ways, I would say it's one of the best
Speaker 1: things that has ever happened. Now, it's difficult to say
Speaker 1: because of all of the you know, well, Michael just
Speaker 1: just got about twenty seconds. If there's one thing that
Speaker 1: has changed dramatically and for the better, Uh, what is it?
Speaker 1: Because of what we learned during the panic and just
Speaker 1: quickly if you could they it proved to us that
Speaker 1: we can be a remarkably agile and and flexible And
Speaker 1: if we can continue to maintain that culture of innovation,
Speaker 1: creativity and be able to change quickly and build it
Speaker 1: into our culture, then there is nothing that we can Well.
Speaker 1: Good luck in the future and thanks for finding time
Speaker 1: once again. Michael Daly, President and CEO at Northwhile Health,
Speaker 1: author of the book Leading Through a Pandemic. He was
Speaker 1: named to Modern Healthcare's magazines a hundred most Influential People
Speaker 1: in Healthcare, ranked number three overall. This is Bloomberg. You're
Speaker 1: listening to Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. Among our most
Speaker 1: read on the Bloomberg Today. It's a Bloomberger exclusive and
Speaker 1: it's about Morgan Stanley's role in reinvigorating a federal probe
Speaker 1: examining regularities in a very look at a market for
Speaker 1: Wall Street. We're talking about block trades. Yeah, raj on
Speaker 1: his finance reporter for Bloomberg News. He's with us in
Speaker 1: the Bloomberg Interactive Broker Studio. Let's get some definitions, Sree,
Speaker 1: just out of the way here first. What is a
Speaker 1: block trade? Large junks of stock that you need to
Speaker 1: sell and it has to be privately negotiated. You can
Speaker 1: just dribble them out, because if you do that over
Speaker 1: a long time, it will take a while and you
Speaker 1: will have advance price action. You might as well figure
Speaker 1: out the right price at which you can sell off,
Speaker 1: usually at a discount to where the stock is trading.
Speaker 1: Say you want a big jung of apple and it's
Speaker 1: trading at you negotiate a deal and it's usually at
Speaker 1: a discount, so you probably sell it to the best,
Speaker 1: better nine and then they hope to parcel it off
Speaker 1: to other people. So I remember years ago where we
Speaker 1: would Las Laborini was really into block trades and money
Speaker 1: flow and we would track the big moves by institutional
Speaker 1: investors when they sell the block and watch the money flows,
Speaker 1: because it was usual an indication of where stock was going.
Speaker 1: We've gotten away from that big time, like through the
Speaker 1: tech the tech crisis and run up if you will.
Speaker 1: What is it that's at stake or what is it
Speaker 1: that investigators have been looking at when it comes to
Speaker 1: block trades? Effectively, if some people have been blurring the
Speaker 1: lines and going from the grid of the black what
Speaker 1: they're really trying to figure out is when banks get
Speaker 1: mandates for some of these block trades, are they tipping
Speaker 1: their friends in the hedge fund world? Are they front
Speaker 1: running some of that information so that they can preposition themselves,
Speaker 1: possibly by shorting the stock, because you know, when a
Speaker 1: block trade hits the tape, the stock is going to
Speaker 1: trade down because a large amount of stock is coming
Speaker 1: down the bike and that will drive the price down.
Speaker 1: So if you're short to stock, you're bound to make money.
Speaker 1: So is there some willing and dealing going on where
Speaker 1: some of their clients are short in the stock so
Speaker 1: that when the block actually comes through, the bank can
Speaker 1: tap on their shoulders and get them to buy that.
Speaker 1: So both sides are happy, clients are in a way
Speaker 1: behold into the bank, and the clients are making some
Speaker 1: money that is obviously not good. Remember that a lot
Speaker 1: of this operates in the gray area. It is murky
Speaker 1: when you're bringing your block trade. What is the hypothetical
Speaker 1: conversation you're having. Is it really illegal confidence conversation or
Speaker 1: even a confidential conversation if you don't have the mandate yet.
Speaker 1: These are some of the things we imagine that regulators
Speaker 1: prosecutors will have to wrestle with and it won't be
Speaker 1: easy to solve. And that might be one reason that
Speaker 1: might be giving faith and belief to a lot of
Speaker 1: the defendants that and when I say defendants, I'm just
Speaker 1: talking about the people who have sought information from right
Speaker 1: now because they haven't even charged anyone. But that's the
Speaker 1: kind of thing that they would have to solve for
Speaker 1: and figure out if they have a real case. Here,
Speaker 1: we'll take us back about a year ago to Arks
Speaker 1: and the blow up there and how this current version
Speaker 1: of an inquiry into block trades was really set off
Speaker 1: by that. I'll take you further back then, because this
Speaker 1: investigation into block trades really started off around twenty eighteen.
Speaker 1: As early as twenty eighteen is our understanding. But since
Speaker 1: then it waxed and wained a little bit and never
Speaker 1: really seemed to gather a steam. Then what happened last
Speaker 1: year Archagos, Bill Huong's famed family office that had the surprise,
Speaker 1: spectacular run up and even even more shocking collapse. The
Speaker 1: unwind happened because a lot of the banks, worried about
Speaker 1: the positions that Archagos held, moved quickly to dump their holdings,
Speaker 1: and that meant large blocks and across a variety of
Speaker 1: names hit the market. So when investigators a few months
Speaker 1: down the line started investigating what happened with Archas you know,
Speaker 1: we know that there are inquiries looking into whether there
Speaker 1: was market manipulation, whether banks are concluding in the sale process.
Speaker 1: Along the way, they also started looking at some of
Speaker 1: these blocked trades, and that seems to have breathed new
Speaker 1: life into this probe that has looked at this lucrative
Speaker 1: block trade activity and from there it seems to have
Speaker 1: expanded to other traits. That Morgan Stanley, the bank we're
Speaker 1: looking at that seems to be the center of all
Speaker 1: this uh is they're looking at the trades that they
Speaker 1: bought to market and whether there is more wrongdoing, and
Speaker 1: some executives at the film are under the gun right now,
Speaker 1: and I think that's what caught our attention. It's like, okay,
Speaker 1: so where's Morgan Stanley and all of this, So they're
Speaker 1: being investigated to or there's no charge, Like where what
Speaker 1: is it? How do we need to look at this firm?
Speaker 1: They certainly seems central to whatever process is going on
Speaker 1: right now. There seems to be a lot of information
Speaker 1: gathering from the SDN, Y, the SEC and other people.
Speaker 1: A lot of the threads, based on our reporting so far,
Speaker 1: tie back to Morgan Stanley. Back in November, we had
Speaker 1: reported that there had a syndicated recent to get desk
Speaker 1: power and Pussy was put on leave. It wasn't quite
Speaker 1: clear why. But now it's become much more apparent than
Speaker 1: it was tied to this entire block trading probe. And
Speaker 1: now they're looking at some of his clients, some of
Speaker 1: the conversations he's had, some of his colleagues. So it's
Speaker 1: going to be interesting few weeks and months ahead as
Speaker 1: they try and figure out whether they can build a
Speaker 1: real case. I mean, ultimately we could get regulators to
Speaker 1: rule right on this. But you said it's murky regulators, prosecutors,
Speaker 1: if if if if we if they have what we
Speaker 1: think they have in terms of evidence, in terms of
Speaker 1: being tracking them for a while. It's really it's really
Speaker 1: hard for anyone on the outside to be able to
Speaker 1: definitively tell you which way this goes, because I can
Speaker 1: guarantee you there's someone at the SD and why sitting
Speaker 1: in an evidence room looking at a pile of stuff.
Speaker 1: Very well, good know all the answers well, and just
Speaker 1: got about twenty seconds or fift I mean black trades.
Speaker 1: It's a part of how Wall Street works, right, It's
Speaker 1: a part of how Wall Street works. It was made
Speaker 1: famous by the legendary Ghostly we fifty years ago and
Speaker 1: still a very lucrative part of the market. Well, incredible reporting,
Speaker 1: and we set a Bloomberg exclusive animals right tree not
Speaker 1: a Raja, And thank you so much, finance reporter at Bloomberg.
Speaker 1: This is Bloomberg is do this week with Carol Messer
Speaker 1: and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. After
Speaker 1: surging we're sales plant based meats in the meat departments
Speaker 1: of grocery stores increased only just a smidge in one
Speaker 1: percent last year. Tim, It's remarkable to read that in
Speaker 1: Dina Shanker's latest article in the upcoming double issue of
Speaker 1: Bloomberg business Week magazine. She's consumer reporter for Bloomberg Knew.
Speaker 1: She joined us now on the phone from New York City.
Speaker 1: Also with us as Joel Webber, editor at Bloomberg business Week.
Speaker 1: He's with us in the Bloomberg INTERACTI Broker studio. Joel,
Speaker 1: I think back to where we were about two years ago.
Speaker 1: I was going to the grocery store every two or
Speaker 1: three weeks, okay, because that's where I wasn't in pandemic mode,
Speaker 1: using two shopping carts, okay. And I was at the
Speaker 1: grocery store. I think it was a Wegman's, and there
Speaker 1: was like this whole section of beyond me that was
Speaker 1: on sale there and beyond meat stock. It actually at
Speaker 1: the time was doing pretty well. Yeah, And you know,
Speaker 1: I think, um, uh, you haven't gone to the grocery
Speaker 1: store since I'm guessing no, I have gone to the
Speaker 1: grocery first. You know what taken up with the team
Speaker 1: during the pandemic. We do a lot of delivery these days, right, Well,
Speaker 1: grocery delivery. So the enthusiasm among investors and certain consumers
Speaker 1: was incredibly high. Um. For uh, you know this the
Speaker 1: foe meat fake meat stuff when it came to market,
Speaker 1: and we've seen it um reflected in I'm looking at
Speaker 1: beyond share price, which has come down pretty substantially since
Speaker 1: that moment that you were at Wigman's all those months
Speaker 1: ago and then before times. Um. But as Dina writes
Speaker 1: in this latest issue, which I found this to be
Speaker 1: really interesting, the companies are starting to attack and think
Speaker 1: of themselves maybe not as always being the main event,
Speaker 1: into something more like an ingredient. So so Dina walk
Speaker 1: us through the strategy and how it's playing out. Hi. Thanks.
Speaker 1: So basically what you have is these companies are no
Speaker 1: longer getting all the attention from consumer from people like
Speaker 1: me in the media, although I do give them a
Speaker 1: lot of attention. Um. People are are getting a little
Speaker 1: bored with the novelty of a burger made from something
Speaker 1: other than meat, or sausage made from something other than pork.
Speaker 1: They're also getting maybe you guys can relate, getting a
Speaker 1: little tired of cooking all the time. So, uh, the
Speaker 1: sales have dropped precipitously. Um. Oh, and then there's also
Speaker 1: the fact that they can get meat a lot more
Speaker 1: easily than they did during that time when you're taking
Speaker 1: those two supermarket uh cards through the aisles. So all
Speaker 1: of these things are making is that uh people just
Speaker 1: aren't feeling as compelled to try these uh not so
Speaker 1: new products anymore. So what are these companies doing? They're saying,
Speaker 1: but wait, there's more. Okay, we can put our fake
Speaker 1: beef into ravioli, we can put sausage on a pizza,
Speaker 1: we can put it in a dumpling. So many ways
Speaker 1: to eat this stuff, and a lot of it doesn't
Speaker 1: even involve cooking, or at least, you know, real cooking.
Speaker 1: You can throw this into a microwave. You can just
Speaker 1: put it in the oven for ten minutes and it'll
Speaker 1: be ready before your next zoom meeting. So it's really simple.
Speaker 1: And hopefully, you know, with all of this melted cheese
Speaker 1: on top, or pasta around it, or what other whatever
Speaker 1: else is dressing it up, you might not even notice
Speaker 1: that it's not the real thing. So I have a theory, Tina,
Speaker 1: and I'm interested if you're reporting bear this our just
Speaker 1: a observation from the Weber household, which is when I've
Speaker 1: cooked with uh, fake meat, it doesn't smell good when
Speaker 1: it's just by itself. Did that come up? You know,
Speaker 1: it did not come up with any of the wrong Definitely,
Speaker 1: it has no note. I was gonna say it's come
Speaker 1: up real human beings, but I talked to um all
Speaker 1: the time. I've noticed it in my house. Other when
Speaker 1: I say real human being, I'm using that term really
Speaker 1: loosely because I'm realizing I'm mostly talking about other reporters.
Speaker 1: But people people have definitely mentioned it to me that
Speaker 1: there's a funny smell, and I noticed it too, Um,
Speaker 1: but it made me wonder actually, like, you know, this
Speaker 1: is actually maybe a brilliant technique because there's so many
Speaker 1: things that meat gets added to, and you know, maybe
Speaker 1: it doesn't need to be meat. It could be fake muting.
Speaker 1: Like this solves the other problem of maybe not having that,
Speaker 1: you know, the smell of jewel cooking in your house.
Speaker 1: I'm coming over. I don't know that I am sodina.
Speaker 1: My problem with this plant based food is that I
Speaker 1: don't know that it's definitely healthier. And I guess that's
Speaker 1: what I'm thinking about, that that's where food is ultimately
Speaker 1: moving in terms of direction, does that hold it back
Speaker 1: from growth as well? Definitely? I mean it is you know,
Speaker 1: as a as a category. Um, there's nothing nobody's gonna
Speaker 1: say this category is a health food category. You can
Speaker 1: go a product by product and some will have, you know,
Speaker 1: better nutritional value than others. But um and and that's
Speaker 1: also becoming some A way that the newer companies are
Speaker 1: trying to differentiate themselves is by saying, look, we're only
Speaker 1: using um, a handful of ingredients or um, we have
Speaker 1: fewer calories or whatever it is. But compared to uh,
Speaker 1: you know, like the real stuff, I mean kind of
Speaker 1: a wash, you can you can definitely make arguments that, um, listen,
Speaker 1: it doesn't have a cholesterol, but it has a ton
Speaker 1: of sodium. Um and uh, the amount of you know,
Speaker 1: the beef burger can have literally just a single ingredient
Speaker 1: in it, so um, the beef industry will say that's
Speaker 1: really great. But then of course you can make the
Speaker 1: argument that, um, well, sure, hidden in all that beef
Speaker 1: are a whole lot of you know, antibiotics that are
Speaker 1: fed to the animals, said to the animals, um, bring
Speaker 1: it back, you know, I'm wondering if I'm wondering about
Speaker 1: product pipelines here, because for the last couple of years,
Speaker 1: the news from these companies has really been, Hey, we're
Speaker 1: working on this chicken version of chicken. What is the
Speaker 1: product pipeline telling you about their new strategy. Well, when
Speaker 1: I spoke to Dennis Woodside, who's the president at Impossible,
Speaker 1: he said, you know, listen, we're still working on mimicking
Speaker 1: that hole muscle kind of format, which is like a
Speaker 1: chicken breast or steaks. Um. And then he didn't put
Speaker 1: it this way exactly, but essentially what he was saying was,
Speaker 1: but this is so much easier, Like I can just
Speaker 1: take the ground beef we are have and put it
Speaker 1: in a ravioli. All I have to do is, you know,
Speaker 1: make that business deal. And that's not that's a lot
Speaker 1: easier than making a fake chicken breath. All right, Well,
Speaker 1: I want real stuff in my only I'm just gonna
Speaker 1: put it out there. Um. This story in the new
Speaker 1: issue of Bloomberg Business Week magazine. You can find it
Speaker 1: everywhere tomorrow. Bloomberg Business Week getter Joe Weber, who's kind
Speaker 1: of takes maybe some cooking lessons and of course, Tina
Speaker 1: Shankar of Bloomberg News. Yeah, I'll bet you let me drive. No, no, no,
Speaker 1: all right, I want to drive. It's a good question.
Speaker 1: Drive is the drive to the clothes on Bloomberg Radio.
Speaker 1: All right, just about twelve minutes left in today's trading session.
Speaker 1: We've definitely seen our reversal and we are hovering neuro
Speaker 1: best levels of the session. So we've gone from red
Speaker 1: to green when it comes to the equity trade, and
Speaker 1: that is following the latest FED minutes from the Federal Reserve.
Speaker 1: It was at January meeting. I really think the takeaway
Speaker 1: and our our markets live blog has been just great
Speaker 1: on this said. Basically, there was nothing there that made
Speaker 1: investors think that the Fed is going to be more
Speaker 1: hawkish than it was already anticipate. Keep in mind the
Speaker 1: markets already pretty aggressive about what the Fed made more
Speaker 1: hawk issues. I think the key of the Carol right,
Speaker 1: not much new in there in terms of new hawkish
Speaker 1: signs in the Fed minutes. Let's shut all about it.
Speaker 1: That and more with Jimmy Lee, the founder and CEO
Speaker 1: of the Wealth Consulting Group two point seven billion dollars
Speaker 1: in assets under management. Jimmy joins us once again on
Speaker 1: the phone from Las Vegas. Jimmy, how are you great?
Speaker 1: Is here from you guys? Yeah, it's good to have
Speaker 1: you back with us. Help us make sense of this
Speaker 1: market right now? Um, we not just have you know,
Speaker 1: investors trying to figure out the Fed's next move. We
Speaker 1: have investors concerned about the hottest inflation print in forty years,
Speaker 1: and then we have geopolitical tensions on the border of
Speaker 1: Russia Ukraine. Help us make sense of it? Well, I
Speaker 1: think until we get past the FED meeting in March,
Speaker 1: we're gonna see some days where we get some wild
Speaker 1: swings in the market UH and volatility, and so you know,
Speaker 1: until they Russia, Ukraine, tod Asian UH settles itself out
Speaker 1: and we'll know that pretty soon. I think. Um, that's
Speaker 1: the one thing besides the FED meeting that's coming up
Speaker 1: where people are speculating whether the FED will raise rates
Speaker 1: by fifty basis points or less. I'm in the thinking
Speaker 1: that it's not going to be fifty, but the speculation
Speaker 1: about that, and you're gonna have people on your show
Speaker 1: and commentators are they think both ways. So I think
Speaker 1: the market economy can absolutely stand fifty. So if that
Speaker 1: were to happen and we get some short term volatility
Speaker 1: from either of that or invasion into your crane, I
Speaker 1: still think I'm constructive on equities for this year and
Speaker 1: the economy, and I would use that as a buying
Speaker 1: opportunity if you're a stalk investor. Yeah, it's interesting on
Speaker 1: the equity side of things. Right to me is that
Speaker 1: right now a lot of investors are a lot more
Speaker 1: aggressive in their thoughts about how aggressive the Fed will
Speaker 1: be in raising rates UM. You know, we're talking without
Speaker 1: Kathleen Hayes in terms of the balance sheet is a
Speaker 1: very big difference, and that's still in question how the
Speaker 1: Fed approaches this. And there's a difference between letting a
Speaker 1: run off for actually actively selling UM assets off the
Speaker 1: balance sheet. There are still a lot of unknowns. We
Speaker 1: know the Feed's going to raise rates at this point,
Speaker 1: it's aggressive. If the FETE is a little bit more devish,
Speaker 1: what would that mean potentially for the equity markets, I
Speaker 1: could put it in a really good place. I agree,
Speaker 1: and that's actually what I think is gonna happen. Carol.
Speaker 1: I think that you know, the hawkish signaling that the
Speaker 1: fet IS has made absolutely gives them some room to
Speaker 1: back off of that statement or those statements, and the
Speaker 1: people that are predicting seven rak hikes I think are
Speaker 1: gonna be wrong. And so I think the supply situation
Speaker 1: gets better first. And then as they said, they're gonna
Speaker 1: be very data dependent and very flexible every single meeting.
Speaker 1: And uh, I don't see them raising rates is as
Speaker 1: high as some people think. And I think the long
Speaker 1: part of the bottom market agrees with that. So you
Speaker 1: don't see the long end of the market really going
Speaker 1: up that much. And um, I think that the bond
Speaker 1: investors on that side are disagreeing with people that I
Speaker 1: think that FET is going to be very hot. Well,
Speaker 1: so the bottom market just come in just a little
Speaker 1: bit un yelled at me, hair, just you know. And
Speaker 1: what's interesting is in that FOMC minutes um that again
Speaker 1: we heard from those members that price pressures would moderate.
Speaker 1: Uh and the default setting of that the issue will
Speaker 1: work at south out tim that is still there by
Speaker 1: members of the f O m C. Yeah, Hey, Jimmy,
Speaker 1: I want to dig into what you were saying about
Speaker 1: this being a buying opportunity between now and the next
Speaker 1: meeting of the Federal Reserve. What type of what to
Speaker 1: you is sort of a bottom for the current cycle
Speaker 1: that we're in. Well, I think we've seen a lot
Speaker 1: of support around temper cent on this and P during
Speaker 1: the days that we saw across intraday, and Uh, I
Speaker 1: would see that. I would see Let's let's say, for example,
Speaker 1: if we get an invasion into ukrane Um, maybe it
Speaker 1: could go down a little further. Um. If the FED
Speaker 1: raises fifty basis points, maybe we could see hitting that
Speaker 1: temperacent number again. But I would see it. I would
Speaker 1: I would think that we would get aggressive buying at
Speaker 1: around that tempera sent number again. And so you know,
Speaker 1: I'm bullish um, as long as earnings continue to look good,
Speaker 1: and I think earnings can look better in a lotter
Speaker 1: part of this year if costs come down a little
Speaker 1: bit and so if the shortage on the supply situation
Speaker 1: improves a bit and um, and we're already seeing some
Speaker 1: signs of that. By the way, one of the indexes
Speaker 1: we follow is the shipping index little London, and costs
Speaker 1: have come down by like two thirds and over the
Speaker 1: last month or two and so so certainly supplies the
Speaker 1: supply situation. You hear lots of different stories, But I
Speaker 1: think the the supply side and the expense of that
Speaker 1: companies have to deal with will get better. And so
Speaker 1: if earnings can hold up parts you do to that,
Speaker 1: and also the strong consumer. I think that the equities
Speaker 1: from here on out, if we end up with high
Speaker 1: single digits for the year, would be very good. So, Jimmy,
Speaker 1: you you think inflation has peaked? You know, I think
Speaker 1: there's a good chance it has. And um, I think that, yes,
Speaker 1: I do, And I know it's a little bit of
Speaker 1: a contrarian view, but I believe that the Fed ultimately
Speaker 1: would be right that that it was transitory. It will
Speaker 1: be transitory. You're like the only one it might be,
Speaker 1: you know, relatively lonely in that corner. But people have
Speaker 1: talked about peak inflation. They have, but you know we're
Speaker 1: still seeing Yeah they have, but you know it hasn't
Speaker 1: really turned out that way. Well, yeah, that's the problem.
Speaker 1: This is it's a tricky time. So I know, you
Speaker 1: don't talk stocks sectors. Where should we be there at
Speaker 1: this point? To be um, we're using a Barbell strategy
Speaker 1: and we still believe that it's better to be in
Speaker 1: some of the more economy opening cyclical sectors, and so
Speaker 1: we're overweight energy, financials, industrial materials. But I think people
Speaker 1: will go back into growth stocks and but quality growth stocks,
Speaker 1: so companies that have good earnings. Obviously the companies have
Speaker 1: been hit the most with the highest valuations that don't
Speaker 1: really have great earnings. I don't know if investor money
Speaker 1: will flow back into those as aggressively as they make
Speaker 1: some of the megacap stocks that investors have been, you know,
Speaker 1: invested in for a long time. Also for listeners, you know,
Speaker 1: in the past FED tightening cycles, stocks have done very well,
Speaker 1: so equities of very good asked the class during tightening
Speaker 1: cycles and actually growth as beat value in those past
Speaker 1: time periods. Although this time around, I think it's dangerous
Speaker 1: to say, but I think it is a little bit
Speaker 1: different in the sense that I think the value sectors
Speaker 1: will will be doing very well. And also it's important
Speaker 1: for investors not to be too underweight overseas, and so
Speaker 1: I think international markets will do better as well. Yeah,
Speaker 1: we've heard that too, although you know what's interesting, and
Speaker 1: I guess we'll have to watch the economic data points um.
Speaker 1: The FED in their minutes also talked a lot about
Speaker 1: O Macron and it's potential to weigh on output and
Speaker 1: also talked about future variants, and we know are reporting
Speaker 1: to our I think of our Michelle Cortez story over
Speaker 1: the weekend that we're not out of the pandemic, and
Speaker 1: we're not out of the pandemic until everybody's out of
Speaker 1: the pandemic. So that continues to be something to me
Speaker 1: that certainly can impact the trade and where the opportunities are. Yeah,
Speaker 1: and I've got one, you know, I was listening to
Speaker 1: on the commercial break there um Dr Fauci's interview. Regardless
Speaker 1: of where we're at with the with the case count,
Speaker 1: it's it's pretty evident now that we're opening up the
Speaker 1: economy and they're getting rid of things like the mass
Speaker 1: mandates in a lot of states. And so I don't
Speaker 1: see a reversal on that. I really dont so. And
Speaker 1: and also investors have not really understood that there's probably
Speaker 1: not going to be any tax hikes this year. So
Speaker 1: they'll understand that once we get closer to April and
Speaker 1: people are talking their accountants, but without tax hikes in
Speaker 1: a mid term election year, where as they think, whether
Speaker 1: you know, I don't really care what side somebody's on
Speaker 1: on the political side, but there's a little momentum for
Speaker 1: the GOP, I think, and I think from an investors standpoint,
Speaker 1: you know, not any more new regulations and things like
Speaker 1: that will seem bullish and uh, I think you'll it'll
Speaker 1: you know, promote risk taking. All right, We're gonna run. Hey, listen, Um,
Speaker 1: thanks for stopping by. Jimmy Lee, founder and chief executive
Speaker 1: officer of the Wealth Consulting Group out there in Vegas.
Speaker 1: Two point seven billion in assa. It's under management, and uh,
Speaker 1: talking about his thoughts in terms of the environment, We're
Speaker 1: gonna find opportunities. Yeah, his COVID thoughts are really interesting.
Speaker 1: Carol reminds me of what Michael Dowling, CEO at North
Speaker 1: Will Health told us earlier in the show. We are
Speaker 1: on the exit ramp of COVID. We're in a good
Speaker 1: place right now. Yeah, I mean it is interesting and
Speaker 1: we are also increasingly learning at you know, how to
Speaker 1: deal with this and move forward on it. Thanks for
Speaker 1: listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
Speaker 1: or Bloomberg dot com, and you can also listen to
Speaker 1: our radio show at two pm Eastern on Bloomberg Radio
Speaker 1: or watch us on YouTube, search Bloomberg Global News,