WEBVTT - Meme Trading Continues Rolling On

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<v Speaker 1>This is Bloomberg Business Week. I'm Charle Masser and I'm

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<v Speaker 1>Bloomberg Quick Takes Tim Stanibek. We're here every day bringing

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<v Speaker 1>pm Eastern Time on Bloomberg Radio or watch us on

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<v Speaker 1>YouTube search Bloomberg Global News. I want to go back

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<v Speaker 1>to Qualcom, one of the big players, a hundred and

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<v Speaker 1>fifty six billion dollar market cap in the semi space,

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<v Speaker 1>and as I mentioned, that stock is up more than

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<v Speaker 1>four percent after ours. Let's get to it because a

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<v Speaker 1>lot of it's got to have to do with that

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<v Speaker 1>first quarter outlook, which is ten billion to ten point

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<v Speaker 1>eight billion, which beats the estimate of nine point seventy billion.

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<v Speaker 1>Talk about optimism. Mandy Sing he's the one who really

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<v Speaker 1>gets this. He's senior tech industry analysts for us here

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<v Speaker 1>at Bloomberg Intelligence. Here in our interactive broker's studio feels

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<v Speaker 1>like an upbeat report. Yes, it is a great print

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<v Speaker 1>and it just goes through show that some of the

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<v Speaker 1>secular trends that we've been witnessing, the digital transformation, connectivity overall,

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<v Speaker 1>five G rollouts, it's kind of playing into Qualcom strength

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<v Speaker 1>and that's what we're seeing in the numbers. How are

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<v Speaker 1>they managing it? We spend so much time talking about

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<v Speaker 1>supply jain problems, supply gain problems. We just did it

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<v Speaker 1>with ch Chief J. Powell. Are they managing it well?

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<v Speaker 1>Is there some reason why it doesn't necessarily seem to

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<v Speaker 1>be hurting them too much or that much? So clearly

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<v Speaker 1>they are managing it well. And some of it has

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<v Speaker 1>to do with the type of chips these cells. So

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<v Speaker 1>they also use t SMC, but they use other foundries

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<v Speaker 1>as well. And what we have seen companies do see

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<v Speaker 1>being time and conductors. So companies that have kind of

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<v Speaker 1>diversified their foundry exposure have done well because they could

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<v Speaker 1>source their chips from all these different foundry makers. So

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<v Speaker 1>that is what has helped them on the supply side

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<v Speaker 1>in terms of demand side. Really, uh, they seem to

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<v Speaker 1>be doing well in all the kind of segments I

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<v Speaker 1>mentioned except for autos. So autos is one of the

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<v Speaker 1>high growth segments where Nvidia has done particularly well, and

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<v Speaker 1>that is one area where investors may want to see

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<v Speaker 1>Quelcom really up their game. What do we know about

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<v Speaker 1>pricing power? What is what Qualcom tell us about their

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<v Speaker 1>ability to raise prices in an environment where demand is

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<v Speaker 1>high and supplies low. Yeah, so clearly their gross margins

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<v Speaker 1>have improved and that is a function of pricing, and

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<v Speaker 1>they have been able to command you know, the higher prices,

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<v Speaker 1>especially on the you know, the latest chips when it

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<v Speaker 1>comes to the five G rollouts. So whether it's uh,

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<v Speaker 1>the data center build out or the tablets that they

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<v Speaker 1>are selling, it's really the latest chips that are that

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<v Speaker 1>they're selling our commanding premium pricing. You know. I do

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<v Speaker 1>think about like the differences, and we have to remember

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<v Speaker 1>that because we are seeing this with companies and certainly

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<v Speaker 1>big players in the chip sector that some manage better

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<v Speaker 1>than others. And that's just a case like it goes

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<v Speaker 1>to really understanding this industry, right, And you said you

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<v Speaker 1>mentioned the founderies, like who are they playing into or

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<v Speaker 1>what's sector that they sell into? Correct? Yes, And look,

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<v Speaker 1>I mean we know industrial IoT has become a big

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<v Speaker 1>trend after the pandemic because from an enterprise perspective, you

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<v Speaker 1>want everything connected going forward, and that's what everyone realized

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<v Speaker 1>during the pandemic, that if you're connected, you can get

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<v Speaker 1>your work done. So connectivity as an overall trend is

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<v Speaker 1>really a tailwind for all the semiconductor guys, not just Welcome,

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<v Speaker 1>but Qualcom is exposed more to mobility and five D

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<v Speaker 1>rollouts and that is why they're doing well right now. Okay,

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<v Speaker 1>help us understand the relationship between Qualcom and who they

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<v Speaker 1>supply to Apple, for example, how has that relationship changed

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<v Speaker 1>and what should investors now? Yes, so with Apple, their

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<v Speaker 1>exposure to Apple has gone down because Apple has been

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<v Speaker 1>basically doing a lot of things in house and they

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<v Speaker 1>have this system on a chip that has got everything

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<v Speaker 1>except they still have to pay a toll to Qualcom

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<v Speaker 1>on the modem side. So when it comes to five

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<v Speaker 1>D rollout, Apple will have another chip from Qualcom, but

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<v Speaker 1>for the most part they have replaced the core mobile

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<v Speaker 1>chip that they used to use from Qualcom with their

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<v Speaker 1>own internal chips, So revenue exposure to Apple has gone down.

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<v Speaker 1>Where Qualcom has benefited is from huawei' So because of

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<v Speaker 1>that Huawei band, what has happened is Qualcom has been

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<v Speaker 1>the main beneficiary of all the Android phones they're selling.

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<v Speaker 1>To show me, all the Chinese handset makers because Huawei

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<v Speaker 1>is banned they can't sell those like Qualcom can't even

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<v Speaker 1>sell any chips to Huawei because of the band right now.

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<v Speaker 1>So clearly Qualcom has been the beneficiary of that band.

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<v Speaker 1>But that whole China exposure, it's I mean, when you

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<v Speaker 1>think about it, something could happen at the geo political

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<v Speaker 1>level and that has a big impact on Calcom. So

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<v Speaker 1>that's something that investors have an eye on. Manti, thank you.

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<v Speaker 1>This is Bloomberg Business Week with Carol Masser and Bloomberg

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<v Speaker 1>Quick Takes Tim Stinovic on Bloomberg Radio. One of the

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<v Speaker 1>other things that we've been tracking big time this year,

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<v Speaker 1>thinking all right, yolo trading, it's done, all right, put

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<v Speaker 1>it to bed, we're all coming back to work. We're

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<v Speaker 1>not happening. And then you have as some others, well,

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<v Speaker 1>I want to talk about this with any Massa. She's

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<v Speaker 1>investing reporter at Bloomberg News. She joins us live here

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<v Speaker 1>from New York City, and I got the first question

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<v Speaker 1>I gotta ask you is can you see the future,

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<v Speaker 1>because I would imagine that you wrote this story before

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<v Speaker 1>we saw what happened with Avis and bed Bath and

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<v Speaker 1>beyond today. Yeah, I mean, it's actually pretty funny. When

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<v Speaker 1>I first was thinking about writing this story, uh, several

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<v Speaker 1>weeks ago, I was thinking, Hey, maybe it's time to

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<v Speaker 1>write a story about how Yolo trading has tapered off.

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<v Speaker 1>And literally that day the Trump's Back happened, and so

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<v Speaker 1>I had to rethink it, and I was like, you

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<v Speaker 1>know what, Yolo trading hasn't tapered off at all. What

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<v Speaker 1>am I talking about? Like, sure, game Stop and AMC

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<v Speaker 1>have you know fallen. AMC is still trading, you know,

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<v Speaker 1>fall or above where I was at the beginning of

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<v Speaker 1>the year. Um, But like we've had these cycles almost

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<v Speaker 1>like different vintages of meme stocks so and crypto. So

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<v Speaker 1>you had the first wave of game Stopping a m C,

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<v Speaker 1>then it was doge Coin, then it was sheepa a

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<v Speaker 1>new coin than the Trump's Back. Now we have Evis.

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<v Speaker 1>It's just an never ending cycle. It seems, well, we

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<v Speaker 1>love how you do did this, and we talked with

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<v Speaker 1>Bloomberg Business Week editor Joe Weber about your take and

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<v Speaker 1>how you guys likened it to vintages of wine. Right,

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<v Speaker 1>we're kind of moving through some different vintages. Yeah, and

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<v Speaker 1>each different meme episode has its own ter war nicely

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<v Speaker 1>done but them bum um. What's interesting too is, uh,

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<v Speaker 1>it is kind of fascinating this week. You talked about

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<v Speaker 1>the you know, Trump in the last couple of weeks, uh,

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<v Speaker 1>and Digital World acquisition, but the Avis beyond even um

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<v Speaker 1>bed Bath and beyond, Like, should we can we call

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<v Speaker 1>that a meme stock? Yeah? I mean that's a really

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<v Speaker 1>good question. What qualifies exactly as a meme stock? Now,

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<v Speaker 1>we had a whole group of them at the beginning

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<v Speaker 1>of the year that became popular at the same time

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<v Speaker 1>very obviously got hot on message boards, but it seems

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<v Speaker 1>like an expanding definition in some ways. And something that

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<v Speaker 1>we address in the story is it's reflective of how

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<v Speaker 1>investing has really changed in the past about six years.

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<v Speaker 1>It didn't used to. Even even when social media and uh,

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<v Speaker 1>you know, more accessible online investing became widespread, it wasn't

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<v Speaker 1>quite as easy as it is today to see something

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<v Speaker 1>on Reddit or Twitter or anywhere else and just quickly

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<v Speaker 1>click into an app on your phone um and and

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<v Speaker 1>buy a share or a fractional share of a company

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<v Speaker 1>or a new cryptocurrency. So the information cycle and the

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<v Speaker 1>ease of trading have both changed remarkably in just the

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<v Speaker 1>past couple of years. Well, any A big part of

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<v Speaker 1>the narrative that has emerged around meme stocks such as

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<v Speaker 1>the one we've been talking about have been the role

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<v Speaker 1>of retail traders and retail investors that they have in

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<v Speaker 1>these meme stocks. But I wonder about Wall Street's role

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<v Speaker 1>and to what extent you have hedge funds getting involved

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<v Speaker 1>in the bigger companies actually tracking these meme stocks and

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<v Speaker 1>trying to get in. Well, we definitely saw that the

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<v Speaker 1>hedge funds had a wake up call in the game

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<v Speaker 1>Stop era, and that in particular was, um, you know,

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<v Speaker 1>the things that help happened with Melvin Capital, for example,

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<v Speaker 1>just show how there needs to be a new awareness

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<v Speaker 1>around the force with which a wave of retail traders

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<v Speaker 1>can come into the market. And I think that hedge

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<v Speaker 1>funds did take note of that, and um you know,

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<v Speaker 1>now you hear from some traders and from some firms

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<v Speaker 1>that they have made some tweaks around how they monitor um,

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<v Speaker 1>you know, social media phenomena. So wait a minute, So

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<v Speaker 1>just how I understand this. I mean, these people that

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<v Speaker 1>we all thought were going to go back to work

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<v Speaker 1>and not be able to trade because of the ease

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<v Speaker 1>of doing it on these platforms can still be back

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<v Speaker 1>at work, right, and trading is and how we see

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<v Speaker 1>this well, I mean it differs from person to person,

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<v Speaker 1>I guess, but it's definitely easier to do just quickly

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<v Speaker 1>on the side on your phone, maybe while you're walking

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<v Speaker 1>out to get lunch or something, than you know, opening

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<v Speaker 1>a whole desktop application like you might have had to

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<v Speaker 1>do several years ago. Um. So it's just getting more

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<v Speaker 1>discreet and easier as time goes on. The conversations online

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<v Speaker 1>changed around meme stocks. UM. Well, I guess one prominent

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<v Speaker 1>aspect of the game Stop run up was trying to

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<v Speaker 1>execute a short squeeze. So I wouldn't say that that's uh,

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<v Speaker 1>that's not the case across the boards. Some of the

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<v Speaker 1>popularity of certain meme names, especially in crypto, um are

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<v Speaker 1>just you know, bidding up the price of something that

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<v Speaker 1>almost in the quite case of Shiba a new coin,

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<v Speaker 1>or in the case of doge coin, really had almost

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<v Speaker 1>no value whatsoever. And uh, it's just riding a wave

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<v Speaker 1>of popularity basically. Alright, so all right, too early to

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<v Speaker 1>say fad this point. I mean no, really, Like it's

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<v Speaker 1>just fascinating how you set out to do one story

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<v Speaker 1>and then it was like, uh yeah, no, Annie, it's

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<v Speaker 1>not gonna be the case. Talk about a wake up

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<v Speaker 1>call right now. I'm going to be very cautious to

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<v Speaker 1>call it a fad. Well, I have to say, well,

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<v Speaker 1>what do you watch for then? Like, how do we

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<v Speaker 1>kind of figure that? Wait a minute, this is now

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<v Speaker 1>just like algorithms, right, we're at one point kind of

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<v Speaker 1>newer to the market. There now a part of the

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<v Speaker 1>normal way we trade when do we do we is

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<v Speaker 1>there is some point that you look at and say, okay,

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<v Speaker 1>this is just a part of how trading is. It's

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<v Speaker 1>part of our trading environment. Yeah, I mean we have

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<v Speaker 1>seen the retail part participation in the market taper off

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<v Speaker 1>a little bit, but not not not by too much.

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<v Speaker 1>It's still above the levels it was at at least

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<v Speaker 1>in the equity market before UM, before the pandemic hit.

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<v Speaker 1>So this whole year and a half or so, the

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<v Speaker 1>crazy UM waves that we've gone through have ray is

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<v Speaker 1>some awareness among retail investors. I guess one open question

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<v Speaker 1>is if there were some huge market wide sell off

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<v Speaker 1>or another big occurrence like that, or you had some

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<v Speaker 1>retail traders really get burned on one of these meme

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<v Speaker 1>names to a huge extent, that could limit the popularity

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<v Speaker 1>going forward. But at least this year we haven't really

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<v Speaker 1>seen at a bait. It's kind of one by one,

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<v Speaker 1>these these meme names will taper off in popularity, but

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<v Speaker 1>someone something else will come up in its place, just

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<v Speaker 1>like a game of whack a mole or okay, anny,

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<v Speaker 1>So what's it going to be? What's the next meme? Stock?

0:11:33.040 --> 0:11:35.559
<v Speaker 1>Black Away stock? Wow? I guess we're gonna have to

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<v Speaker 1>check Reddit to figure that out. Alright, Like a good reporter,

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<v Speaker 1>no speculation there goes to the grindstone when you find

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<v Speaker 1>out let us know. Alright, any massa, thank you so much.

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<v Speaker 1>Check out that story. It is in the upcoming edition

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<v Speaker 1>of Bloomberg Business magazine. She is, of course Bloomberg News

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<v Speaker 1>investing reporter. Yeah, but you let me drive Oh no, no, no,

0:11:58.440 --> 0:12:05.440
<v Speaker 1>this is not a toy on the drugs. I want

0:12:05.440 --> 0:12:14.240
<v Speaker 1>to dry. Good question. This is the drive to the

0:12:14.280 --> 0:12:20.560
<v Speaker 1>clothes on Bluebird Radio. All Right, the Fed the FED

0:12:20.640 --> 0:12:23.439
<v Speaker 1>chief has come and spoken, and markets seem to be

0:12:23.520 --> 0:12:25.720
<v Speaker 1>okay with it. In fact, we're seeing records on those

0:12:25.720 --> 0:12:28.679
<v Speaker 1>major equity averages here, Charlie, we are at our highs

0:12:28.679 --> 0:12:30.480
<v Speaker 1>of the session. When it comes to the SMP down

0:12:30.480 --> 0:12:34.400
<v Speaker 1>and the NASDAC yields moved down, then they moved up. Uh,

0:12:34.640 --> 0:12:37.679
<v Speaker 1>it seems like stocks up, Treasury is down, yields up.

0:12:37.720 --> 0:12:41.880
<v Speaker 1>We're okay. Everything is awesome, right, My My big takeaway

0:12:41.960 --> 0:12:44.000
<v Speaker 1>is that J. Powell and the Federal Reserve have done

0:12:43.920 --> 0:12:46.959
<v Speaker 1>any really good job communicating because look at the way

0:12:47.000 --> 0:12:49.199
<v Speaker 1>markets are reacting. Well, there's one thing he said specifically

0:12:49.240 --> 0:12:51.080
<v Speaker 1>when it comes to pace, and he says, we will

0:12:51.160 --> 0:12:53.720
<v Speaker 1>not surprise the markets on a change in pace. If

0:12:53.800 --> 0:12:57.400
<v Speaker 1>anything we have learned about this FED in particular J

0:12:57.520 --> 0:12:59.640
<v Speaker 1>Pal of course at the helm of that Fed, is

0:12:59.640 --> 0:13:02.720
<v Speaker 1>that are going to feed information to the markets. There's

0:13:02.760 --> 0:13:05.920
<v Speaker 1>nothing that he necessarily wants to surprise, but he stands

0:13:05.960 --> 0:13:10.320
<v Speaker 1>ready to act and change policy direction if needed and

0:13:10.360 --> 0:13:13.120
<v Speaker 1>as warranted by the economy. All right, let's see what

0:13:13.120 --> 0:13:15.480
<v Speaker 1>our guest has to say as we count you down

0:13:15.480 --> 0:13:18.040
<v Speaker 1>to the closing bell on this FED Wednesday. Hillary Kramer

0:13:18.200 --> 0:13:20.640
<v Speaker 1>is back with us President and Chief investment Officer at

0:13:20.679 --> 0:13:23.240
<v Speaker 1>A and G Capital Research. She joins us once again

0:13:23.280 --> 0:13:26.480
<v Speaker 1>on the phone in New York City. Hillary, he does

0:13:26.520 --> 0:13:29.800
<v Speaker 1>seem to be among the great communicators when it comes

0:13:29.840 --> 0:13:32.880
<v Speaker 1>to FED policy. What is it about what we heard

0:13:32.960 --> 0:13:35.959
<v Speaker 1>from FED Chief J Powell and that FED decision? We

0:13:36.040 --> 0:13:39.080
<v Speaker 1>only have one more left in this year of one?

0:13:39.160 --> 0:13:43.400
<v Speaker 1>What stands out for you that it's a dangerous policy

0:13:43.440 --> 0:13:48.840
<v Speaker 1>we're in. Why dangerous? It's it's dangerous because Powell wants

0:13:48.880 --> 0:13:53.400
<v Speaker 1>to wait for full full employment before he starts raising rates.

0:13:53.440 --> 0:13:56.840
<v Speaker 1>So in the meantime, Carol, we have how the housing

0:13:56.920 --> 0:14:00.120
<v Speaker 1>market it's like a casino with so much speculation. And

0:14:00.520 --> 0:14:03.200
<v Speaker 1>a few people say, hey, Hillary, why is gold not

0:14:03.320 --> 0:14:07.160
<v Speaker 1>going up? And I kind of I think of crypto.

0:14:07.240 --> 0:14:11.160
<v Speaker 1>Of course, it's the opposite of gold, but but an

0:14:11.200 --> 0:14:15.640
<v Speaker 1>alternative for those that are fearful that prices are going

0:14:15.760 --> 0:14:19.480
<v Speaker 1>you know, through the roof. And although Powell did exactly

0:14:19.520 --> 0:14:22.960
<v Speaker 1>what we expect, right, we're going to sustain. Look, we're

0:14:22.960 --> 0:14:26.000
<v Speaker 1>going to sustain rally, there's no question about that. Because

0:14:26.040 --> 0:14:28.920
<v Speaker 1>we're getting ready to close the books and a year

0:14:29.680 --> 0:14:32.680
<v Speaker 1>and uh and look we're tapering way too slowly. That's

0:14:32.720 --> 0:14:36.200
<v Speaker 1>another takeaway for me, like, you know, there's no need

0:14:36.280 --> 0:14:39.160
<v Speaker 1>to keep buying a billion a month. I mean now

0:14:39.160 --> 0:14:42.480
<v Speaker 1>we're going to hundred and five billion months ninety and

0:14:42.520 --> 0:14:46.480
<v Speaker 1>then in June will start, we'll be we'll be completely done,

0:14:46.560 --> 0:14:50.160
<v Speaker 1>and the in the FED will be done buying bonds

0:14:50.560 --> 0:14:53.640
<v Speaker 1>and keep rate slow. Hillary, I just we don't have

0:14:53.640 --> 0:14:54.800
<v Speaker 1>a ton of time, so I want to make sure

0:14:54.840 --> 0:14:58.160
<v Speaker 1>we we drill into what you're saying here, what specifically

0:14:58.200 --> 0:15:02.720
<v Speaker 1>about the Fed's policy dangerous to you right now? It's

0:15:02.880 --> 0:15:08.240
<v Speaker 1>causing a speculation. Money is free, money is free, it's

0:15:08.240 --> 0:15:12.160
<v Speaker 1>phony money. Look at the supplaine supply chain disruptions, right,

0:15:12.280 --> 0:15:14.920
<v Speaker 1>just look at those. All of that has to do

0:15:15.120 --> 0:15:19.640
<v Speaker 1>with you know, phony interest rates and a FED policy

0:15:19.800 --> 0:15:23.400
<v Speaker 1>that has everybody buying and buying, you know, for their home,

0:15:23.760 --> 0:15:25.800
<v Speaker 1>for their life. But wait, wait, wait, wait, you're saying

0:15:25.920 --> 0:15:29.120
<v Speaker 1>interest rate low rate is what's causing supply disruptions. Isn't

0:15:29.160 --> 0:15:31.760
<v Speaker 1>it a case of just this The supply chains just

0:15:32.280 --> 0:15:35.920
<v Speaker 1>aren't actually working, whether it's not enough people in the ports,

0:15:35.920 --> 0:15:38.560
<v Speaker 1>not enough people at work to make it all happen.

0:15:38.880 --> 0:15:42.840
<v Speaker 1>We also do have incredible demand because we do have

0:15:43.000 --> 0:15:45.880
<v Speaker 1>we talked about this constantly about consumption. It is at

0:15:45.880 --> 0:15:48.720
<v Speaker 1>their big time and whether people are whether it's corporate buying,

0:15:48.760 --> 0:15:52.360
<v Speaker 1>individual buying, kind of buying it advanced concerned about running

0:15:52.360 --> 0:15:54.920
<v Speaker 1>at a supply It's kind of this weird little cycle.

0:15:55.320 --> 0:15:59.680
<v Speaker 1>But isn't it because of that and not necessarily cheap money.

0:16:00.040 --> 0:16:03.280
<v Speaker 1>But that's what you just said in my opinion, Carol,

0:16:03.760 --> 0:16:06.320
<v Speaker 1>is that it actually is from cheap money. It's it's

0:16:06.480 --> 0:16:11.480
<v Speaker 1>all of this demand. This demand has created this supply

0:16:11.720 --> 0:16:16.320
<v Speaker 1>chain disruption. Why is there so much demand out there

0:16:16.800 --> 0:16:24.360
<v Speaker 1>because rates are so low, because money is so incredibly cheap.

0:16:24.800 --> 0:16:28.800
<v Speaker 1>You know, this policy has people buying just buying homes,

0:16:28.880 --> 0:16:30.560
<v Speaker 1>look at the real estatement. But if you try to

0:16:30.600 --> 0:16:32.560
<v Speaker 1>go buy a car right now, you can't actually buy

0:16:32.560 --> 0:16:38.200
<v Speaker 1>a car. That's so much money and money so cheap.

0:16:38.720 --> 0:16:41.440
<v Speaker 1>They're they're they're all buying now. Of course, we also

0:16:41.560 --> 0:16:45.080
<v Speaker 1>know part of the problem has to do with labor shortages,

0:16:45.480 --> 0:16:47.840
<v Speaker 1>and that's why there's a supply chain disruption. Why do

0:16:47.840 --> 0:16:51.280
<v Speaker 1>we have a labor shortage because people want to be

0:16:51.400 --> 0:16:56.360
<v Speaker 1>paid more because everything costs more, and they're looking for

0:16:56.480 --> 0:16:58.920
<v Speaker 1>their wages to go up, which they're starting to. And

0:16:58.960 --> 0:17:01.800
<v Speaker 1>eventually we're going to as I go love wage inflation.

0:17:01.920 --> 0:17:05.000
<v Speaker 1>Now I'm all for someone who works at Walmart getting

0:17:05.000 --> 0:17:09.639
<v Speaker 1>twenty hour and so seventeen. But uh, but still it

0:17:09.720 --> 0:17:14.280
<v Speaker 1>makes a question what's going on here? People are saying,

0:17:14.400 --> 0:17:17.199
<v Speaker 1>I'm not going to bother work. It doesn't make sense.

0:17:17.280 --> 0:17:21.560
<v Speaker 1>Plus the entitlements, uh, they have gone, you know, they

0:17:21.960 --> 0:17:26.080
<v Speaker 1>pretty much have tapered off to nothing. But so then

0:17:26.080 --> 0:17:28.480
<v Speaker 1>why aren't people back at work? I mean, that's the

0:17:28.480 --> 0:17:29.800
<v Speaker 1>thing we have to kind of figure out. And there's

0:17:29.800 --> 0:17:31.640
<v Speaker 1>been some really smart conversations to me, and I've talked

0:17:31.640 --> 0:17:34.760
<v Speaker 1>about this even off air. It's just you maybe have

0:17:34.800 --> 0:17:37.320
<v Speaker 1>couples making decisions that can afford to say, maybe you're

0:17:37.320 --> 0:17:39.160
<v Speaker 1>not going to go back to work because we don't

0:17:39.200 --> 0:17:40.639
<v Speaker 1>want to go back to the way life was, or

0:17:40.680 --> 0:17:42.960
<v Speaker 1>we can afford to do without some things, or kind

0:17:42.960 --> 0:17:45.240
<v Speaker 1>of figuring out different ways of doing things. Maybe there

0:17:45.320 --> 0:17:47.720
<v Speaker 1>is something And it sounds like the Fed and J.

0:17:47.840 --> 0:17:49.919
<v Speaker 1>Powell in particular. You know, one of the things that

0:17:50.000 --> 0:17:51.919
<v Speaker 1>really stuck out for me is he said we have

0:17:51.960 --> 0:17:55.040
<v Speaker 1>to be humble about what we know about this economy.

0:17:55.119 --> 0:17:57.119
<v Speaker 1>I also read into that what we don't know about

0:17:57.160 --> 0:17:59.760
<v Speaker 1>this economy. He said, it's still delta dependent, and that

0:18:00.000 --> 0:18:02.600
<v Speaker 1>puts us on a new path. We really don't know

0:18:03.280 --> 0:18:05.920
<v Speaker 1>what our economy will truly be, especially when it comes

0:18:05.960 --> 0:18:10.400
<v Speaker 1>to the labor market on the other side of this pandemic. Uh,

0:18:10.440 --> 0:18:12.840
<v Speaker 1>we don't know what the labor market will look like,

0:18:12.920 --> 0:18:15.399
<v Speaker 1>but we do know one aspect of it, which is

0:18:15.480 --> 0:18:19.600
<v Speaker 1>that people who are working are going to demand a

0:18:19.680 --> 0:18:22.879
<v Speaker 1>lot more money. I mean they have to. Let's go

0:18:22.960 --> 0:18:26.200
<v Speaker 1>back to let's say October one. That isn't a great

0:18:26.200 --> 0:18:29.639
<v Speaker 1>example Chipotle's earnings fact that said it would be up

0:18:29.640 --> 0:18:33.040
<v Speaker 1>sixty eight percent, right, you know, there are hudd fifty

0:18:33.119 --> 0:18:37.159
<v Speaker 1>five percent. That's beside the point. What's really important. Labor

0:18:37.359 --> 0:18:42.679
<v Speaker 1>costs spiked twenty four percent. Food and beverage rows there

0:18:42.720 --> 0:18:46.560
<v Speaker 1>are those expenses rose four percent. So at the end

0:18:46.600 --> 0:18:49.440
<v Speaker 1>of the day, Chipotle, which to me was going to

0:18:49.520 --> 0:18:52.840
<v Speaker 1>be like off the charts and it was um, really

0:18:53.040 --> 0:18:58.040
<v Speaker 1>got muted because of all of this inflation. Uh. People

0:18:58.240 --> 0:19:00.720
<v Speaker 1>aren't going to go back to work all that faff.

0:19:00.920 --> 0:19:04.080
<v Speaker 1>They got used to being home. They got used to

0:19:04.800 --> 0:19:09.399
<v Speaker 1>that gig economy of up work and UH and small

0:19:09.480 --> 0:19:13.240
<v Speaker 1>projects and getting paid on venmo. There's no reason to

0:19:13.359 --> 0:19:17.320
<v Speaker 1>have to have to you know, march to the train

0:19:17.480 --> 0:19:20.879
<v Speaker 1>and get on and think to the subway and go

0:19:21.040 --> 0:19:24.119
<v Speaker 1>into your office building. It doesn't make sense. Everyone has

0:19:24.160 --> 0:19:26.920
<v Speaker 1>found a new way to make, to make and meet.

0:19:27.080 --> 0:19:29.560
<v Speaker 1>So for so hillary for investors who aren't listening to this,

0:19:30.119 --> 0:19:35.560
<v Speaker 1>how do you trade this very carefully? I'm looking at

0:19:37.119 --> 0:19:42.520
<v Speaker 1>potential bullishness with the biotechs. You know, if anyone wants

0:19:42.560 --> 0:19:46.879
<v Speaker 1>to be speculative, many of these biotechs haven't even started

0:19:47.760 --> 0:19:51.800
<v Speaker 1>to partake in in inflation and in the speculation. So

0:19:52.440 --> 0:19:54.960
<v Speaker 1>there are a number of them which we can do

0:19:55.119 --> 0:19:57.840
<v Speaker 1>another point in time. There's about seven or eight that

0:19:58.119 --> 0:20:02.040
<v Speaker 1>are billion dollar, you know backed biotex. The other way

0:20:02.119 --> 0:20:04.960
<v Speaker 1>to do it is to be really safe because just

0:20:05.119 --> 0:20:07.960
<v Speaker 1>because we're strong right now again we're getting ready to

0:20:08.000 --> 0:20:10.680
<v Speaker 1>close those books. Next year is going to be weak.

0:20:11.040 --> 0:20:13.200
<v Speaker 1>Next year is going to be a problem. So that's

0:20:13.240 --> 0:20:16.479
<v Speaker 1>why I still like stocks like Ingredient, even though their

0:20:16.480 --> 0:20:19.159
<v Speaker 1>earnings are a little bit shaky. We went below ninety,

0:20:19.280 --> 0:20:22.240
<v Speaker 1>but now it's at You have a three percent of

0:20:22.359 --> 0:20:26.560
<v Speaker 1>in yield Hormel h r L. All the hedge funds

0:20:26.600 --> 0:20:29.040
<v Speaker 1>get nervous when the market goes down, they start buying.

0:20:29.160 --> 0:20:31.840
<v Speaker 1>It goes up, you know they have Skippy and applegate

0:20:32.080 --> 0:20:35.800
<v Speaker 1>and spam of course. Um, so that's also a good one.

0:20:35.960 --> 0:20:39.159
<v Speaker 1>And um with Lockheed Martin having had uh you know,

0:20:39.720 --> 0:20:43.160
<v Speaker 1>earning miss so to speak, and the stock they're having

0:20:43.280 --> 0:20:47.159
<v Speaker 1>gone down, um, I think Lockheed Martin l MT. We

0:20:47.240 --> 0:20:50.960
<v Speaker 1>have a good entry point now for for Lockheed Martin

0:20:51.119 --> 0:20:57.360
<v Speaker 1>because it's uh, it's there. They're also the technology cyber

0:20:57.440 --> 0:21:02.760
<v Speaker 1>security driven that and they have a great client. Their

0:21:02.800 --> 0:21:05.520
<v Speaker 1>biggest client is one that has lots of money and

0:21:05.560 --> 0:21:07.960
<v Speaker 1>you always printed this thing before. Yeah, we know him well,

0:21:08.000 --> 0:21:10.560
<v Speaker 1>the U. S. Government. Hey, Hillary, thank you so much.

0:21:10.600 --> 0:21:14.280
<v Speaker 1>A good spirited conversation and thoughtful on this fed Wednesday.

0:21:14.359 --> 0:21:17.240
<v Speaker 1>Hillary Kramer, President and chief investment Officer for at a

0:21:17.440 --> 0:21:19.680
<v Speaker 1>G Capital Research, on the phone from New York City.

0:21:20.760 --> 0:21:23.560
<v Speaker 1>Thanks for listening to Bloomberg Business Week. Download the podcast

0:21:23.640 --> 0:21:26.600
<v Speaker 1>on iTunes, SoundCloud, or Bloomberg dot com, and you can

0:21:26.640 --> 0:21:28.760
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0:21:28.800 --> 0:21:31.960
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0:21:32.000 --> 0:21:32.600
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