Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Well, Matt, I consider
Speaker 1: us very fortunate that every week we get to speak
Speaker 1: with Lauren Sour the Johns Hopkins University, because there's so
Speaker 1: much news that just breaks on a daily basis about um,
Speaker 1: you know, the pandemic, therapeutics as well as vaccines. So
Speaker 1: again today we're joined by Lauren Sauer, Social Professor of
Speaker 1: Emergency Medicine from the Johns Hopkins University. And I should
Speaker 1: know that the Bloomberg School of Public Health is supported
Speaker 1: by Michael Larre Bloomberg found their Bloomberg LP, Bloomberg Philanthropies
Speaker 1: and this radio and TV operation. Dr Soer, thanks so
Speaker 1: much for joining us. I'd love to go to the
Speaker 1: issue which I think is beginning to develop and we
Speaker 1: kind of knew it was gonna come, which is we're
Speaker 1: gonna have more supply this vaccine than demand. Is it
Speaker 1: now time for a big pr campaign to kind of
Speaker 1: get out the you know, the vote, if you will,
Speaker 1: to get people to get vaccinated. Yeah, absolutely, I think
Speaker 1: it is. I mean I think, um, those access issues
Speaker 1: that we've talked about, you know, several times on this show, uh,
Speaker 1: and that we've heard a lot about are still remaining
Speaker 1: for certain populations. But I think the push right now
Speaker 1: has to be convincing those people who have decided not
Speaker 1: to or haven't decided to get vaccinated that now is
Speaker 1: the time, um, and the vaccines available, you can get
Speaker 1: it in many different places. And if we facilitate the
Speaker 1: ability for people to get vaccine, um, that we can
Speaker 1: start to get those numbers up again. Well well, I
Speaker 1: mean in terms of access, President Biden said yesterday that
Speaker 1: every American is going to be at least five miles
Speaker 1: from a vaccine side. Is he off with those figures
Speaker 1: or people get Yeah? I think that he is. Not
Speaker 1: where necessarily the vaccine sites are, but how you access them.
Speaker 1: So I think now is the time where we can
Speaker 1: start to see creative options for getting vaccine into communities
Speaker 1: rather than asking communities to go to vaccine. Because even
Speaker 1: if it's only five miles away. That may mean that
Speaker 1: someone has to take some time off work, has to
Speaker 1: get childcare, may have to borrow a car or take
Speaker 1: public transportation, UM, and all those things. When you add
Speaker 1: barriers to someone who isn't sure if they're going to
Speaker 1: get a vaccine, UM, that that creates, you know, something
Speaker 1: that weighs on the side of I just won't get
Speaker 1: it right now. He also he also said that he
Speaker 1: wants UM employers to guarantee that workers are able to
Speaker 1: get out and get the vaccine with paid with paid time,
Speaker 1: and also are able to recover from anything paid. One
Speaker 1: thing that's a concern, I guess is the hesitancy. Right. Um,
Speaker 1: we know that America has a big crop of anti
Speaker 1: vax ER's UM and I saw a tweet from Joe
Speaker 1: Wisenthal today that maybe what will help PR and the
Speaker 1: other their direction. He says Lauren, I'll quote Joe wasn't
Speaker 1: all directly. So I actually feel like a kind of
Speaker 1: weird high after my second fiser, like I just took
Speaker 1: some coding or tramadal or something. Um. It makes me
Speaker 1: excited to get out there and get my shots because
Speaker 1: he has something to make it feel better, right, but
Speaker 1: is this something that Paul didn't really feel it. He
Speaker 1: got his second shot and said, yes, no signs. So
Speaker 1: is there anything that people are reporting that they, you know,
Speaker 1: feel in the positive sense after these um there were
Speaker 1: here hearing a lot of reports of that sort of
Speaker 1: euphoria of just like, oh my gosh, I can take
Speaker 1: a breath, like it feels good and it was exciting,
Speaker 1: and we've made an incredible amount of progress to get here,
Speaker 1: and it does feel like, you know, you can see
Speaker 1: the light at the end of the tunnel. And I
Speaker 1: think that is not to be discounted. I mean, I
Speaker 1: know when I got my vaccine, I felt I also
Speaker 1: felt a sense of before you like, holy moly, the
Speaker 1: weight has been lifted off a little bit. I'm I'm
Speaker 1: headed towards protection. We're headed, you know, towards the other
Speaker 1: side of this, and and it's exciting, um and it's incredible,
Speaker 1: and the work that went to get us there is
Speaker 1: unbelievable and shouldn't be discounted. And I think if people
Speaker 1: are going out and feeling that, that's amazing and they
Speaker 1: deserve that. Lauren, what do you expect to hear? I
Speaker 1: guess we're waiting here today about that Johnson and Johnson vaccine.
Speaker 1: What do you think is we're going to hear? I
Speaker 1: have about feeling what we're going to hear is UM
Speaker 1: that it'll be you know, made available again, and there
Speaker 1: might be some caveats to who can get it, UM,
Speaker 1: so they may slightly restrict the population. I think we're
Speaker 1: all sort of waiting, just like you too, to hear
Speaker 1: what they decide. They look through a ton of data,
Speaker 1: they've done all of their due diligence. I think it's
Speaker 1: great to see that this system, um, this adverse event
Speaker 1: system reporting is working and reporting is happening, and so
Speaker 1: I think we will probably see it, you know, available again, um,
Speaker 1: but with a modified allowance for who gets it. Hopefully
Speaker 1: men in their authorities with a solid dad get the
Speaker 1: first shot at it, because I think I saw that
Speaker 1: in the preliminary material. I'm definitely excited if, if, and
Speaker 1: when that's cleared again, I'm headed back to New York
Speaker 1: to get my shot and then we can all play
Speaker 1: bridge together sans mask. That would be fantastic. Lauren, thanks
Speaker 1: so much for joining us. Laurence sour there from the
Speaker 1: Johns Hopkins UH School of Medicine, The Bloomberg School of
Speaker 1: Public Health, of course, is supported by Michael R. Bloomberg,
Speaker 1: and you may have guess he's the founder as well
Speaker 1: of Bloomberg LP and Bloomberg Philanthropies, and he runs the
Speaker 1: TV and radio stations as well. All right, j T,
Speaker 1: thanks very much for that. Now you brought us the
Speaker 1: new home sales data at the top of this program,
Speaker 1: Um destroying the survey numbers. We saw one point zero
Speaker 1: to one million. We were looking for eighty five thousand
Speaker 1: new home sales month over month, a gain of twenty
Speaker 1: point seven percent compared to the survey estimated fourteen point
Speaker 1: two percent. So really strong numbers. And our next guest says, UM,
Speaker 1: the that's the new home sales. The existing home sales
Speaker 1: market is the un healthiest housing market in ten years.
Speaker 1: We'll find out why from logan motto Shami. He is
Speaker 1: a housing data analyst, UM also lead analysts for Housing
Speaker 1: Wire out of Irvine, California. Logan, let's talk first about
Speaker 1: the new home sales numbers. Amazing jumps. What what sales report?
Speaker 1: Yea best new home sales reported over ten years. I
Speaker 1: mean you had the trispector, you had headline numbers, which
Speaker 1: can be wild month to month. I think people get
Speaker 1: confused sometimes where you have these really big months and
Speaker 1: big declines, but headline was great, But the key is revisions.
Speaker 1: We had positive revisions, and monthly supply is below four
Speaker 1: point three months on the headline and on a three
Speaker 1: month average. You've got to keep it simple with a
Speaker 1: new home sales market because we we focus so much
Speaker 1: on lumber prices. But as long as monthly supply for
Speaker 1: new holmes is under four point three months, something that
Speaker 1: never happened from two thousand to two nine, the builders
Speaker 1: are happy. No matter what they complain about in any
Speaker 1: surveys or anything, that is all they care about because
Speaker 1: that means they could sell product and that will lead
Speaker 1: to higher housing starts. So as long as that continues,
Speaker 1: and I was I was just gonna ask Logan, does
Speaker 1: that mean they're gonna go out and keep building more?
Speaker 1: Is everybody who knows how to build a house going
Speaker 1: to go and do it right now? Yes? And as
Speaker 1: long as that supplies that low, we're okay. Now, this
Speaker 1: sector gets hit harder than the existing home sales market
Speaker 1: when rates go higher. So the backdrop of higher mortgage
Speaker 1: rates would be problematic because then you've ben the lumber
Speaker 1: prices really kicking. But for now things are good. Your
Speaker 1: home sales fine, excellent print, best print in ten years.
Speaker 1: Revision is good, monthly supply good great, great way to
Speaker 1: get into the weekend. Alright, logan. But on the existing
Speaker 1: home sales, you know, I just in the in the
Speaker 1: town where I live. As soon as anything goes on
Speaker 1: the market, it's snapped up it and there's just not
Speaker 1: that much apply, I guess. So give us a sense
Speaker 1: of existing snapped up at a price much higher than
Speaker 1: then you saw in the ad, right, because I know
Speaker 1: people have been looking for homes around that area and
Speaker 1: they just can't get anything because it jumps right away.
Speaker 1: This is the most unhealthiest market in the last ten years.
Speaker 1: Where the new home sales market has a has a
Speaker 1: has a different economic backdrop. We just do not have
Speaker 1: a lot of homes. And that's the main issue. Mortgage
Speaker 1: purchase application demand. If when you do some COVID nineteen adjustments,
Speaker 1: it's not up that much year over year, but total
Speaker 1: inventory has been falling since as purchase application data has
Speaker 1: been rising. And now we have you know, we have
Speaker 1: the best housing demographics ever recorded history, and we have
Speaker 1: the lowest mortgage rates ever recorded history. So when you
Speaker 1: put that many people into this marketplace, which is always
Speaker 1: my biggest concern in this period, Uh, you're gonna get
Speaker 1: you need to fear about price escalation. But the but
Speaker 1: the problem is in the past, higher mortgage rates tend
Speaker 1: to balance this out. COVID nineteen has kept mortgage rates
Speaker 1: artificial love has kept the bond market artificially low with
Speaker 1: compared to our economic data, Like our economic data warrants
Speaker 1: a ten year yield north of two point But so
Speaker 1: we have we just have a very unhealthy marketplace because
Speaker 1: literally people are not losing their bids by one or
Speaker 1: two people, They're losing their bids by eleven and fifteen people.
Speaker 1: That is extremely unhealthy. And we're getting these home price
Speaker 1: growth without a credit expansion. And this is what concerns
Speaker 1: me about this period of time, is that price growth
Speaker 1: is really going up, but demand is not really falling
Speaker 1: through with it. And and that's what that's gonna be
Speaker 1: a problem down the line again when mortgage rates eventually
Speaker 1: rise and I'm not talking about like six or seven percent,
Speaker 1: I'm just talking about well, so logan, I mean, I'm
Speaker 1: looking I'm hoping to move back to the Tristiate area
Speaker 1: looking for a nice colonial on a couple of acres
Speaker 1: in Westchester County built I'm hoping the way I envision
Speaker 1: it built in the seventeen eighties, seventeen nineties. Um, what
Speaker 1: you're saying is I should just trash that idea and
Speaker 1: just buy a couple of acres and and build it myself.
Speaker 1: If you could find the lumber, then yeah, that'll be
Speaker 1: a good thing. You can do it. But yeah, it's
Speaker 1: just it's just an extremely unhealthy market. I mean, that's
Speaker 1: just we just and there's no there's nothing that could
Speaker 1: really solve this in a short term unless mortgage rates
Speaker 1: go higher, and COVID is impacting the world economy is
Speaker 1: much harder than ours. Our economic data it's much better,
Speaker 1: but it's keeping rates low, and it's just it's really
Speaker 1: frustrating for buyers. I mean, you're just you're not getting
Speaker 1: outbid by one or two people, You're just getting outbid
Speaker 1: by many. I mean, some homes are getting thirty or
Speaker 1: forty offers, and some of the price finals selling prices
Speaker 1: are is insane. Well exactly because even if you do
Speaker 1: get the house, then you move in and you're going
Speaker 1: to bed knowing that you bought in at the top
Speaker 1: of the market. Well, here, here's here's here's one thing
Speaker 1: about that. The difference between now and then, let's say
Speaker 1: two thousand two to two thousand and five, that was
Speaker 1: more of a speculative credit bubble where these those weren't
Speaker 1: really homeowners. There a lot of our investors here. Anybody
Speaker 1: who buys this home is legit. And the concern is
Speaker 1: it's not about a housing crash or home prices peeking out.
Speaker 1: It's that these people all going to stay in their homes.
Speaker 1: They're not gonna lose their jobs or anything anytime soon.
Speaker 1: They're gonna stay here for a long time. It keeps
Speaker 1: housing stuck. Being stuck is the worst problem because there's
Speaker 1: no real there's no velocity quick fix to this. So
Speaker 1: uh And if you look at our home prices are
Speaker 1: real home prices, there's so much lower than what Canada, Australia,
Speaker 1: New Zealand, France, the UK has, Their real home price
Speaker 1: growth has been much stronger. So again, my fear for
Speaker 1: me as always that prices escalates out of control because
Speaker 1: these are all legit buyers, but sales really aren't growing
Speaker 1: that much and that's that's being stuck. That's the frustrating part.
Speaker 1: That's why I say this is a very unhealthy housing market. However,
Speaker 1: higher rates should cool this down right because there is
Speaker 1: no credit bubble this time. There's limits to housing. You're
Speaker 1: still bounded are the rules of numbers. So hopefully, and
Speaker 1: especially now that I think supplies some more supply come
Speaker 1: under market, it just cools this market, John, because guess
Speaker 1: what the demographic passion they're not going anywhere. They need shelter,
Speaker 1: they need somewhere to leven. Hey, look, thanks so much
Speaker 1: for joining us. Love getting your perspective on all things
Speaker 1: real estate. Logan Multi Shammi housing data analysts also lead
Speaker 1: analysts for Housing Wire based in Irvine, California. Matt House
Speaker 1: the housing market in Berlin, and I have to say,
Speaker 1: as he was saying that the actual prices aren't higher
Speaker 1: than they are in Canada the UK, um, the prices
Speaker 1: here are extremely high. I mean, if you want a
Speaker 1: nice house in the suburbs in the Summit or the
Speaker 1: Greenwich or the Bronxville of Berlin, you have to be
Speaker 1: prepared to pay um, you know, starting at two million
Speaker 1: and probably and probably higher. Frankly for what you could
Speaker 1: get in the US. It's incomparable. But what I was
Speaker 1: thinking is, Paul, if your kids are now going to college,
Speaker 1: you have empty bedrooms, maybe me and my wife could
Speaker 1: just move in with you. Yeah, a little, a little
Speaker 1: Airbnb action. We'll talk about that off the air man.
Speaker 1: That could be a good transaction. We all know the
Speaker 1: bull call on this equity market. It's driven by the
Speaker 1: Federal Reserve accommodative money, it's driven by a fiscal stimulus,
Speaker 1: the reopening trade. Lots of bullish underpinnings to this market,
Speaker 1: but a lot of investors are questioning is that all
Speaker 1: priced into the markets. Let's get a sense of what
Speaker 1: traders are really thinking about that. We to do that,
Speaker 1: we check in with Randy Frederick. He's vice president of
Speaker 1: Trading and Derivatives for the Schwab Center for Financial Research. Randy,
Speaker 1: thanks so much for joining us here. I know you
Speaker 1: guys have your Trader Pulse survey. We really you know,
Speaker 1: talk to traders and ask traders what they're thinking. What
Speaker 1: are the thoughts here of these markets as we are
Speaker 1: hitting kind of you know, kind of all time highs
Speaker 1: almost on a daily basis. Well, let's go back to
Speaker 1: what you mentioned right off the bat, which is that. Um.
Speaker 1: You know, many of our traders told us that they
Speaker 1: thought that the easy games, if you will, in the
Speaker 1: market may have already been built in, not too surprising
Speaker 1: with the SMP five eighty six percent since it bottom
Speaker 1: back in March of last year. But they also still
Speaker 1: have a fairly optimistic views. So in other words, while
Speaker 1: we may not see another eight percent over the next
Speaker 1: twelve months, they still think there's upside available. So when
Speaker 1: are we gonna know that it's time to sell? Well,
Speaker 1: I don't think we ever really know when it's time
Speaker 1: to sell UM, And we don't think selling in the
Speaker 1: broad sense of like get out of everything, is ever
Speaker 1: a good idea. UM. What we often tell our clients
Speaker 1: to do is to take advantage of market volatility. When
Speaker 1: you have little of down dips um, as we were
Speaker 1: kind of in until to day, we're getting a little
Speaker 1: bit of a bounce back. UM, those may be opportunities
Speaker 1: to pick up a few extra shares. And when you
Speaker 1: have markets hitting all time highs like they did just
Speaker 1: last Friday, maybe you take a little bit of profit
Speaker 1: off the table. But wholesale selling is just never a
Speaker 1: really good idea. So nobody rings the bell at the top,
Speaker 1: as they say, all right, Randy, just give us a
Speaker 1: sense of kind of when you again survey the traders, UM,
Speaker 1: what are their thoughts towards volatility here? We've seen the
Speaker 1: VIX pull back pretty significantly here to the seventeen eighteen
Speaker 1: dollar seventeen eighteen range. Here, what did they think about volatility? Well,
Speaker 1: what they think about volatility is that they think volatility
Speaker 1: might actually be a little bit worse in Q two
Speaker 1: than in Q one, which is kind of interesting because, um,
Speaker 1: it's actually been a lot lower. Q one volatility was
Speaker 1: quite a bit higher UM than what we've seen. In fact,
Speaker 1: we've seen the VIX hit twelve month lows here just
Speaker 1: in the last couple of weeks. So UM, But I
Speaker 1: think that's more of a sort of a response to
Speaker 1: what's going on at the moment that they received the
Speaker 1: survey UM, and I think it also had a little
Speaker 1: bit to do with the fact that when this survey
Speaker 1: went out, we were seeing interest rates UM hitting a
Speaker 1: high level we haven't seen in quite a while, and
Speaker 1: the concerns about inflation, I think we're pretty high that
Speaker 1: has that has come down a bit UM in the
Speaker 1: last couple of weeks. As you know, since April began,
Speaker 1: we've seen the ten uere pull back a bit, the
Speaker 1: inflation worries of sub sided to some extent. And while
Speaker 1: it seemed earlier that many people were sort of, um,
Speaker 1: not necessarily trusting of J. Powell that he didn't plan
Speaker 1: to raise rates, and I think he's convinced the market. Now,
Speaker 1: what will the new tax laws if they're put into effect,
Speaker 1: this new tax plan, if it's put into into law.
Speaker 1: Due to the trading environment, well, you know, the sell
Speaker 1: off we got when this was first announced is not surprising.
Speaker 1: When you have the market near or at all time highs.
Speaker 1: We're about one percent below the all time highs, it
Speaker 1: becomes very sensitive to any sort of news that might
Speaker 1: be received as negative. Obviously, people believe if their taxes
Speaker 1: are going to go up that's not a good thing,
Speaker 1: and so the knee jerk reaction is to sell. But
Speaker 1: we're seeing a bounce back today, not too surprising. Generally,
Speaker 1: the sell officer are overdone. They tend to be a
Speaker 1: little bit too extreme. What we don't know is a
Speaker 1: lot of things. First of all, we don't know whether
Speaker 1: it would be retroactive back to the beginning of or
Speaker 1: wether it wouldn't kick in until two. We also don't
Speaker 1: know what the final bill might look like, if or
Speaker 1: when it ever becomes law. Most of the time, initial
Speaker 1: proposals are watered down substantially before they finally become law,
Speaker 1: if they ever do, so, it's really way too early
Speaker 1: to speculate how that might play out. The interesting thing is,
Speaker 1: I mean, it seems to be focused primarily on the
Speaker 1: top three tenths of one per cent, which is a
Speaker 1: very small portion of the population, but also a portion
Speaker 1: who owns an enormous amount of equities in the market.
Speaker 1: But there seems to be quite a bit of pushback. Um.
Speaker 1: I think it may be just sort of a launching
Speaker 1: point for negotiation that there's been a lot of pushback,
Speaker 1: as you know, about the potential for raising corporate tax rates.
Speaker 1: Uh so this is an alternative to that. If they
Speaker 1: don't like corporate tax rate hike, then maybe we should
Speaker 1: go at individuals. Um. You know. One thing that's interesting
Speaker 1: about this is that people always complain about how complex
Speaker 1: the tax laws are. If you eliminated the twelve months
Speaker 1: hold for long term capital gains and you taxed interest
Speaker 1: divin ends, and capital gains all at the same rate.
Speaker 1: It would greatly simplify taxes. Certainly it would go up
Speaker 1: for for some of the high earners, but it would
Speaker 1: simplify things substantially. So I don't think we know how
Speaker 1: this plays out. We don't even know if any of
Speaker 1: it will come into becoming a law, and if it does,
Speaker 1: it will likely look a lot different. There any thirty
Speaker 1: seconds left. What are some of the sectors that the
Speaker 1: traders in your survey are liking right now? Well, one
Speaker 1: that I think is really one of the parts I
Speaker 1: thought was found very interesting was that last year when
Speaker 1: we did this survey, the top sector that they were
Speaker 1: optimistic about was financials, which I think turned out to
Speaker 1: be a very good call, because financials lost four percent
Speaker 1: last year. They're up seventeen percent year to date. So
Speaker 1: the two worst sectors last year were financials and energy.
Speaker 1: Those are the two best ones this year right now.
Speaker 1: Our investors that took this survey told us that they're
Speaker 1: still optimistic about energy. As much as we talk about
Speaker 1: green energy and battery powered cars and all these other things,
Speaker 1: that still makes up a very small portion of the
Speaker 1: overall economy. Old time fossil fuels and and tradition energy
Speaker 1: is going to be with us for a very long time.
Speaker 1: It's down like it was last year, but it certainly
Speaker 1: is not out. And I think this year's rebound is
Speaker 1: a um indicative of that. There are certain fossil fuel
Speaker 1: cars and motorcycles that I intend to keep forever. I'll
Speaker 1: have to rip them out of my cold day to
Speaker 1: be around for a while. Randy, thanks so much for
Speaker 1: joining us. Randy Frederick, their VP of trading at the
Speaker 1: Schwab Center. All right, now we're gonna focus in on
Speaker 1: the municipal bond market. Eric Kazaski, senior US Muni Strategies
Speaker 1: for Bloomberg Intelligence, joins us and Um, we had kind
Speaker 1: of a bombshell yesterday on uh, the tax side of things. Eric,
Speaker 1: how does this affect the muni market in your estimation? Hey,
Speaker 1: good morning guys. Um. Look, obviously, any time you have
Speaker 1: higher taxes on the margin, that's going to be good
Speaker 1: for municipal bonds. Right, people are going to look for
Speaker 1: ways to lower their tax bill. Um. But I think
Speaker 1: if you if you sort of up back before we
Speaker 1: had tax reform in two seventeen, right when we had
Speaker 1: higher taxes, we didn't see like a huge dupremental retail demand.
Speaker 1: I think the real play here is going to be
Speaker 1: what happens to evaluations in the higher tax states like
Speaker 1: New York and California, who are already talking about increasing
Speaker 1: their marginal tax rate in state, and then combined with
Speaker 1: the higher federal tax rate, you could be up in
Speaker 1: the fifties um, and we could see valuations on the
Speaker 1: debt and those states really take off. All right, So Eric,
Speaker 1: just give us a sense here. We've known for a while.
Speaker 1: You certainly since President Biden was elected he won the
Speaker 1: election that probably going to see some taxes go up.
Speaker 1: What does the you know, medicimal bond market, if you
Speaker 1: saw fund flows just take off from there or has
Speaker 1: it been kind of a wait and see issue. No,
Speaker 1: it's been consistently strong, and I think a lot of
Speaker 1: that has to do with um, you know, fear of
Speaker 1: higher taxes in the future. And you know, as as
Speaker 1: the corporate market books frothy um from valuation standpoint, and
Speaker 1: people want to decouple of equities, they are moving into
Speaker 1: unis because that uncorrelated as that class with a low
Speaker 1: historical default rate. Right, So it really checks off two
Speaker 1: boxes as far as moving to take a seat he
Speaker 1: even and getting the tax rancomm is a kicker on
Speaker 1: top of that, what do you expect the changes to
Speaker 1: be UM when we're when all is finally said and done.
Speaker 1: I mean, has there been any Is there a pool
Speaker 1: going on in the office as to what we're gonna
Speaker 1: see at the end of all this? You know what,
Speaker 1: it's an opening gander, right and you know, obviously, like
Speaker 1: given the path negociations, we could be somewhere in the middle.
Speaker 1: But if I had to guess, I would say that
Speaker 1: they get somewhere in moving the needle higher and the
Speaker 1: not in a tax rate to thirty percent range, but
Speaker 1: they might have to give up the efforts to repeal
Speaker 1: the AsSalt limitations. All right, Eric, talk to us about
Speaker 1: the taxable municipal moder Market's a fascinating market to me.
Speaker 1: What's going on there? You know, flutes are still strong
Speaker 1: and it continues to be one of the biggest performers
Speaker 1: in fixed incomes year. And you know with the talk
Speaker 1: of sort of bringing back you go to America bond
Speaker 1: type program with an infrastructure package later in the year,
Speaker 1: obviously that's going to bring more eyes to the sector. UM,
Speaker 1: but it could also bring more supply. With more supply,
Speaker 1: we could see spreads y amount and it will just
Speaker 1: make the sector even more attractive than it is right now.
Speaker 1: What's the most attractive aspect and unis are the most
Speaker 1: attractive area and new needs right now? I mean, what
Speaker 1: are we seeing in terms of UM trends that you like?
Speaker 1: You know what the biggest areas of I would say
Speaker 1: return growth this year have been longer duration and lower
Speaker 1: in yield. We really seem sort of the long end
Speaker 1: of the curve performed best. And you know, triple A,
Speaker 1: triple B and single A metis have really um you know,
Speaker 1: come in as far as performing on the high grade standpoint.
Speaker 1: When you look at you needs lower down into high yield,
Speaker 1: you know, they've certainly been big performers. But you know,
Speaker 1: if you look at sort of the subsectors of high
Speaker 1: yield municipal returns, tobacco has been one of the biggest
Speaker 1: booster there over the last year. We think there might
Speaker 1: be some headwinds to com um just given sort of
Speaker 1: the Biden administrations begin to talk about how they want
Speaker 1: to increase taxes on cigarettes sales, also limit nicotine in
Speaker 1: cigaretts and taco products and band mental cigarettes. Right, all
Speaker 1: of that would be negative from tobacco shipments, which are
Speaker 1: part of the n s A that fuel up the
Speaker 1: team in on those bonds, kind of making it tougher
Speaker 1: and tougher the smoke cigarettes, but easier and easier to
Speaker 1: smoke weed. Matt, So go figure what's going on there?
Speaker 1: Eric has ask you thank you so much for joining us. Eric,
Speaker 1: I don't see you can die from smoking weed? Is
Speaker 1: I know? Ericson goes to little Strategies for Bloomberg Intelligence.
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